Supreme Court Rules States Can Force Online Retailers to Collect Sales Tax

DooKey

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In a 5-4 decision the Supreme Court has reversed a 1992 precedent that barred states from collecting sales taxes for online sales out of state. This means online retailers are now on equal footing with their brick and mortar brethren and will most likely be compelled to pay state sales tax. We'll see if this makes a difference in online prices or not. Also, I don't necessarily agree with the Court, but this might help our local businesses compete a bit better. Only time will tell.

"The Internet's prevalence and power have changed the dynamics of the national economy," Justice Anthony Kennedy wrote in the majority opinion. "The expansion of e-commerce has also increased the revenue shortfall faced by States seeking to collect their sales and use taxes."
 

vegeta535

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This the end of tax "free" internet purchases. I am surprised it took taken this long. States been losing billions a year in taxes.
The only brick and mortar shops I visit anymore outside a grocery store are MicroCenter and Home Depot. If B&M shops think this is going to bring customers back in, I think they're sorely mistaken.
It won't. The overhead of a lot of these online stores is so much lower. Prices even with tax online are generally lower and easier to find bargains.
 

SixFootDuo

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$1,200 video cards from Newegg ... yeah, add a $120 more dollars to that shit. Or, a new $2,000 system, yeah, $200+ in taxes.

This is seriously gonna cost PC builds more money

unless you have a fed tax ID like I do ...
 

cyberguyz

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Well both Newegg and Amazon have always collected HST (Canada's Provincial + Federal sales taxes == 13% :( ) from me. I only get away from taxed purchases with Ebay.

The sales tax argument by the states has always been framed as "leveling the playing field for B&M stores", though everyone knows it's about revenue for the states. The fairness argument was just a smokescreen.

It is fair only to the B&M stores because they are forced to collect sales tax. That puts them at a disadvantage against online retailers that don't collect it and get sales because of that. It is most definitely not fair to US.
 

Armenius

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Good thing I bought my PG27UQ from Newegg before this decision. It's only 6% in Florida, but still would have been an extra $120.
 

Neslepax

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$1,200 video cards from Newegg ... yeah, add a $120 more dollars to that shit.

Not that it has any real bearing on the issue at hand, but I would think that if you have the money to spend $1200 on a single graphics card, you probably can afford the sales tax. For most, that is a luxury expense.
 

lcpiper

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In a 5-4 decision the Supreme Court has reversed a 1992 precedent that barred states from collecting sales taxes for online sales out of state. This means online retailers are now on equal footing with their brick and mortar brethren and will most likely be compelled to pay state sales tax. We'll see if this makes a difference in online prices or not. Also, I don't necessarily agree with the Court, but this might help our local businesses compete a bit better. Only time will tell.

"The Internet's prevalence and power have changed the dynamics of the national economy," Justice Anthony Kennedy wrote in the majority opinion. "The expansion of e-commerce has also increased the revenue shortfall faced by States seeking to collect their sales and use taxes."


Every State has revenue "goals", the money they want to collect in order to fund their infrastructure, personnel, and works/services.

Traditionally, these funds are either collected based on real property ownership, your property tax, vehicle registration, etc, or sales taxes, or use taxes which are that bizarre category of taxes which is mostly just taxes because you tried to avoid paying us taxes. Really, I live in AZ and bought a BMW in Texas and AZ charged me a $500 use tax to make up for me not buying the car in AZ so they did get their sales tax cut of my purchase. It's not like I still didn't have to pay the other registration tax for AZ.

I see all this taxation as rather arbitrary and I get that the State needs tax dollars but they don't have to collect all their revenue from Sales taxes, it's not like the State incurred any costs associated with online sales, they just feel they lost money in sales taxes and want it. They could have created or raised whatever taxes they wanted to to cover the shortfall. But this is an excuse they think they can sell to people.

I need to find the State with the lowest internet sales tax rate and become a digital resident of that State.

Oh, and just because the Supreme Court says the States can do this, it doesn't mean that the residents of these States have to allow it. I live in AZ, many snowbirds, a good bit of tourism. Let the State raise the retail sales tax rates and keep the online sales tax rates lower, and let the visitors foot most of the bill.
 

SixFootDuo

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I haven't used Newegg in years. Their prices are usually higher than Amazon and MicroCenter, plus their version of "Prime" sucks.


You're kidding right?

Amazon cheaper than Newegg? LOLWHUUUUUUUUTTTTTTTTTT

Tax on Amazon is ... real ... really real. Tax is real money out of your real MF pockets.

So, no, Amazon was never cheaper not with the tax.
 

Neslepax

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I have no real complaint with state taxes. They pay for a lot of the things you see and use. Federal taxes, or I suppose, the benefits derived from them are largely much less tangible, in my opinion. It's a thing.

This. As long as I can see my tax dollars going to work in some way, I do not mind paying it or even paying increased taxes for specific city/state improvements. It is when corruption takes over that I have a problem.
 

fuzzylogik

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Already have to report online purchases to the IRS anyway - which is a pain. At least it'll be taken care of automatically now :p But ugh.
 

lcpiper

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Already have to report online purchases to the IRS anyway - which is a pain. At least it'll be taken care of automatically now :p But ugh.

You are saying that when you make online purchases that you report them to the IRS?
 

lucidrenegade

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You're kidding right?

Amazon cheaper than Newegg? LOLWHUUUUUUUUTTTTTTTTTT

Tax on Amazon is ... real ... really real. Tax is real money out of your real MF pockets.

So, no, Amazon was never cheaper not with the tax.

For the stuff I buy, the small, if any, difference in price between Amazon + tax and Newegg is worth the convenience and reliability of Amazon.
 
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griffinhart

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Places like Amazon and Newegg haven't really been cheaper than B&M for a long while now. I tend to use them for convenience and selection. If this really hurts anyone, it will be smaller start ups that will now need to manage out of state sales taxes.
 

BSmith

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I haven't used Newegg in years. Their prices are usually higher than Amazon and MicroCenter, plus their version of "Prime" sucks.

Newegg went into the toilet after the Chinese buyout. Just not been the same.

Back on topic.

Makes no difference to me. It still saves me wear and tear on my car to buy online and have it delivered.
 

Neslepax

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You're kidding right?

Amazon cheaper than Newegg? LOLWHUUUUUUUUTTTTTTTTTT

Tax on Amazon is ... real ... really real. Tax is real money out of your real MF pockets.

So, no, Amazon was never cheaper not with the tax.

I have to agree with lucidrenegade on this. I have routinely found Amazon prices to be cheaper than Newegg over the past ~5-6 years, unless Newegg is price-matching. Even then, I get free same day or next day shipping with Prime (and I use the hell out of it, so Amazon operates at a loss on the amount of shipping they do to me). On top of that, I get all the rest of the Prime benefits that I also use the hell out of. Newegg is a one trick pony with whatever its Prime gimmick is. I haven't even mentioned how much Newegg sucks in terms of its customer service. Even if I found a computer part that was $20 less at Newegg, I would still buy it from Amazon simply because I trust the company not to screw me over and force me to jump through hoops to RMA whatever.
 

lucidrenegade

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Places like Amazon and Newegg haven't really been cheaper than B&M for a long while now. I tend to use them for convenience and selection. If this really hurts anyone, it will be smaller start ups that will now need to manage out of state sales taxes.

My experience is that the only B&M store that is close to or below Amazon / Newegg is MicroCenter, and they are very good about price matching items where they aren't cheaper. Best Buy is almost always more expensive, and their selection of in-store, in-stock items sucks.
 

Teenk9

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Places like Amazon and Newegg haven't really been cheaper than B&M for a long while now. I tend to use them for convenience and selection. If this really hurts anyone, it will be smaller start ups that will now need to manage out of state sales taxes.

This doesn't affect small sellers. It is actually very specific to South Dakota although that doesn't preclude other states from copying it or creating their own version of it.
 
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This affects my PC build and my guns too. I was saving a lot of money buying guns and ammo out of state.
 

vegeta535

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For the stuff I buy, the small, if any, difference in price between Amazon + tax and Newegg is worth the inconvenience and reliability of Amazon.
What inconvenience? I been shopping at NE for 20 years and had nothing but good experiences. I have a MC near me and when I price compared NE aways wins still. I also don't have to compromise like I do with MC to get their deals. shipping typically doesn't take more then 2 days cause most things are coming from a state over from me. 3-4 days if it shipped from California when I am on the east coast. They even accepted RMA from me when I physical broke stuff on accident.
 

shspvr

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I haven't used Newegg in years. Their prices are usually higher than Amazon and MicroCenter, plus their version of "Prime" sucks.
Not everybody live by MicroCenter and Amazon will not take PayPal and I always get it cheaper at newegg any way 85% of the time.
 

AlphaAtlas

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The sales tax argument by the states has always been framed as "leveling the playing field for B&M stores", though everyone knows it's about revenue for the states. The fairness argument was just a smokescreen.

It's a valid argument though. Whether the sales tax is good or not, they shouldn't be excluded from paying sales tax when B&M stores have to.
 

Dman014

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I agree in leveling the playing field.... eliminate sales tax altogether! States (federal government as well) keep finding new ways of taxation (I realize sales tax is not new) and need to learn to cut back like the rest of us.
 

UrielDagda

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I'm already paying NewEgg and Amazon taxes. This really hurts people who are disabled and on a fixed income.. I need to upgrade in a year or two.. When I built this last rig they didn't have the tax, I figure it'll take an extra 2 months of saving to cover it. I'm not particularly against taxes though, I just wish I could tell them where to put the tax I pay. Like, put mine into infrastructure. Fix the bridges and potholes!
 

shspvr

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I agree in leveling the playing field.... eliminate sales tax altogether! States (federal government as well) keep finding new ways of taxation (I realize sales tax is not new) and need to learn to cut back like the rest of us.
The problem is all diff percent rate and in some state you got also pay local city tax on top of those state tax
 

LuxTerra

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Newegg went into the toilet after the Chinese buyout. Just not been the same.
In my experience, Amazon hasn't been the same ever since they opened up to third party sellers. I've repeated had to return items because they're counterfeit or gray market. Amazon's random store and inventory mixing allows a third party seller to inject fake goods into the market without any real recourse. Electronic components are the worst, but I've seen it with multiple higher end products.
 
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umeng2002

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Yeah, NewEgg has been crap since they got bought out. As far as this tax thing. Most places I use online already do this.
 

lcpiper

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It's a valid argument though. Whether the sales tax is good or not, they shouldn't be excluded from paying sales tax when B&M stores have to.

Wait, the business doesn't pay the sales tax, they collect it from the customers and pass it on to the State. If you live in a city that borders another state, you cross the border and buy something in the neighboring state, you don't pay sales tax to your own state. The store collects it for the State you are making the purchase in, not the one you call home.
 

Mugato

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My experience is that the only B&M store that is close to or below Amazon / Newegg is MicroCenter, and they are very good about price matching items where they aren't cheaper. Best Buy is almost always more expensive, and their selection of in-store, in-stock items sucks.

Hit or miss on BB, I’ve had good luck with them and noticed recently that they are carrying mobos/cpus/higher end ram and seem to always have video cards in stock . They also price match just about anything. As far as prebuilt, they now have the custom PCs and dell inspiron gaming 1700 or 1800x which are a good value.
 

AlphaAtlas

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Wait, the business doesn't pay the sales tax, they collect it from the customers and pass it on to the State. If you live in a city that borders another state, you cross the border and buy something in the neighboring state, you don't pay sales tax to your own state. The store collects it for the State you are making the purchase in, not the one you call home.

Technically true, but thats not the point. The State is still getting a cut of the business' revenue. Without the tax, stores could have a lower, more competetive price, or they could raise prices and collect that healthy margin for themself.

As for the matter of location, that is a sticky issue. You could theoretically have an shipping address in a low-tax state and have everything shipped there, then forwarded to you in bulk, if you order alot of stuff online.
 
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