image credit: usatoday.com
This SCOTUS decision will affect all of us. Sparta Report just announced its decision to close down its little
sales center at its blogsite:
effective today, the Sparta Report
Shop will no longer be in operation due to the disastrous decision by the
Supreme Court’s “republican wing” to allow states to charge out of state
businesses with sales tax. We are not interested in complying with 2.5 thousand
and more localities and states and keeping track of the various stupidities of
the corrupt local political tax wrangling.
Taxes: Whatever you think about the issue of taxing internet
sales, the simple fact is that the Supreme Court has just guaranteed that
people across the country will now be paying more in state taxes. It's hard for
us to see how this is good news.
In its 5-4 decision on South Dakota
v. Wayfair, the court overturned two previous rulings that prevented states
from taxing sales
of out-of-state companies. That meant a catalog company based in Maine didn't
have to navigate 45 state sales-tax laws to figure out how much each customer
owed, and then remit that money to the right states.
Brick-and-mortar stores have been
trying to lift this ban for decades, because, they say, it unfairly tilts the
playing field in favor of catalog and online retailers.
According to the
Government Accountability Office, this break cost states up to $13.4 billion in
lost revenue last year alone. And, retailers say it cost jobs and hurt local economies.
Not surprisingly, Amazon.com
(AMZN), Shopify (SHOP), Etsy (ETSY), Wayfair (W)
and other e-commerce stocks dropped on Thursday.
The Supreme Court ruling
was notable not just because it did something it rarely does — namely, overturn
previous decisions. (The most recent, Quill v North Dakota, was in 1992.) The
court also split in a highly unusual way.
On the majority side were
rock-ribbed conservative Justices Clarence Thomas, Samuel Alito and Neil
Gorsuch, who sided with Justice Anthony Kennedy's opinion.
But so did stalwart
liberal Justice Ruth Bader Ginsburg. Kennedy argued that the explosive growth of
online retail rendered the court's previous rulings outdated.
Three of the other liberals on the
court, Justices Stephen Breyer, Elena Kagan and Sonia Sotomayor, sided with
Chief Justice Roberts' dissent. Roberts argued that it should be up to Congress
to make a change like this.
Whatever the merits of the
decision, the Court's ruling means not only higher taxes for consumers, but
higher prices.
.
.
More Taxes To Come?
Worse still, the court may have
opened the door to letting states impose other taxes on out-of-state firms.
Grover Norquist of Americans for
Tax Reform argues that states could use this ruling to impose corporate taxes
and even income taxes across state lines.
"If physical nexus is no
longer required for sales taxes ,then it is no longer required for personal or
corporate income taxes," he said. "Now, California (or any state or
city that loses population through exit) can tax people and businesses who do
their best to avoid that state or city."
If you think that's a fanciful
prediction, you haven't been paying attention. State governments will take
every opportunity they can to raise taxes — especially if their own residents
aren't the ones paying them.
In the end, it makes Supreme Court
Chief Justice Roberts' dissent look all the wiser.
Read the rest of the IBD report here.
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