One is that they don't use the infrastructure in the state. Shippers are either already taxed for their use if private or self funding government in the case of UPS.
The second is a more slippery taxation without representation which also gets into all sorts of semantic issues with who is really being taxed the in state residents or the out of state residents.
Really the tax infrastructure is in drastic need of modernization and streamlining. It may step on a lot of toes but I could see forcing online sales tax into a federal fixed rate with redistributed fixed percentages as worth it. Say 5% rate nationally and of that 1/3rd each to the buyer's state and the seller's state and 1/6th to each municipality respectively with it defaulting to the state if it is unincorporated. It would even actually fit in interstate commerce domain nicely.
This is one way of looking at things, but I think sales tax is much closer to a tax on consumers than on businesses. Or at least is intended as a tax on consumers to fund their state infrastructure, often because imposing an income tax is impossible (e.g. Washington State constitution) or just politically unpalatable.
Normalising taxes is basically impossible in an environment where sales taxes are a meaningful part of a government's budget.
There's certainly a good argument for a flat national sales tax but that doesn't really fit with federalism and, anyway, good luck getting New Hampshire and New York to agree on a number.
Amazon already collects tax in Colorado, but a few smaller retailers will send you a letter at the end of the year totaling up your untaxed purchases. Since different counties and localities collect different rates, it's hard to get the total tax right at the time of sale.
Many states do this. I imagine that relatively few individuals (as opposed to businesses) actually comply.
https://www.npr.org/sections/money/2013/04/16/177384487/most...
But, as you said, Amazon already collects tax at time of sale which was the bulk of my purchases.
If you are specifically talking about Colorado, you may be right. I'm not familiar with how Colorado does sales tax.
In general, though, zip code is not sufficient. Even if use zip+4 it might not be sufficient. For example, in Washington, people who live in zip 98027-5444 on Renton Issaquah RD SE in the address range 9100-9199 pay 8.6% if their address is even, and 10% if their address is odd. A tax district boundary runs right down the middle of their road.
See this comment from a few months ago explaining in detail how you find the sales tax on a sale in Washington: https://news.ycombinator.com/item?id=16196591
Yes, it is hard to 'get the right rates' 100% of the time.
Practically speaking, of course, few people keep detailed enough records to even calculate the correct use tax owed at the end of the year, and any tax that might have been owed goes uncollected and unnoticed. Which is the problem that led to this Supreme Court case in the first place.
I was on an automatic payment with them, and they announced that they were adding 911 taxes.
I canceled the automatic payment and started getting refills at pincheap.com (a dealer with no presence in either Iowa or Illinois), avoiding both sales tax and the 911 tax.
There is no "delivery" of any physical product, so I wonder if the tax status of that arrangement changes.
But if you're driving up to buy a few cases of New Glarus beer, chances are you're vastly unlikely (at or nearing 0%) that you'd be held to account for that purchase for Illinois tax purposes.
AWS launches new 'Guaranteed to be in Oregon' VPN endpoints! Free for use while shopping on Amazon.com.
IIRC you're expected to get the out of state retailer to reimburse you at a later time and then when you're paying your income taxes you include any purchases subject to use tax.
> Use Tax on the Difference
> If you paid at least 6 percent to another state on your purchase, you do not owe use tax to Michigan. If you paid less than 6 percent, you owe the difference.
> NOTE: The full 6 percent use tax is also owed on purchases made in a foreign country.
[1]: https://www.taxslayer.com/support/1153/michigan-use-tax
[2]: https://www.michigan.gov/documents/taxes/MI_1040_Instruction...
In Massachusetts, oddly, if you paid less than the Mass sales tax rate of 6.25%, you owe 6.25% use tax. It's not the delta you owe, it's the full amount. But you don't owe it at all if you paid more than the Mass rate.
Avalara and Taxamo don't list prices on their sites as far as I managed to find. Googling turns up comments saying that Avalara is expensive.
TaxJar and Taxify do list prices.
For a small business (up to 1k transactions/month) is $17/month if you pay for a year up front ($19/month on month-to-month). A transaction is either giving them an order and having them figure the tax, or looking up a rate with their API.
That will get you reports for each state, ready to file. If you want them to actually file for you, that costs more. If you have to file in all 45 states that have sales/use tax, with a monthly filing in each, it would come to $5000/year at TaxJar.
Taxify is $47/month for up to 1k transactions, and it would be $14580 to have them handle filing under the same 45 state/monthly filing assumption.
I don't see any pricing for their services for their services for determining how much tax you need to collect for a given transaction.
[1] https://www.avalara.com/us/en/products/sales-and-use-tax/ava...
From their docs: https://developers.taxjar.com/api/reference/#sandbox-environ...
* Sandbox Environment
TaxJar provides a sandbox environment for automated testing and development on all TaxJar Plus plans. After generating a sandbox API token, point your API client to the sandbox environment...
There is no sandbox API available without 'plus'. Perhaps you had an earlier version and are grandfathered in?