Rick Perry signs bill requiring Amazon to collect sales taxes - just like California (states, Texas)

[sol11]

Originally Posted by Drover

If Amazon has a physical presence in Texas, they should be collecting sales tax on orders shipped to residents of Texas just like any other retailer with a physical presence in Texas. What's the issue here?

....Rick Perry hatefest......

[SGrey]

Originally Posted by Drover

If Amazon has a physical presence in Texas, they should be collecting sales tax on orders shipped to residents of Texas just like any other retailer with a physical presence in Texas. What's the issue here?

Because up until now, physical presence has always been defined by having an actual, live and in the flesh, retail store that a customer can walk into and browse. That has always been the marker for having a physical presence that then causes a store/business to have to charge sales tax - Not simply having a distribution center in the state, a warehouse or any other presence.

No store front in the state, no state taxes. Simple. In the past, anyway.

[Drover]

Originally Posted by SGrey

Because up until now, physical presence has always been defined by having an actual, live and in the flesh, retail store that a customer can walk into and browse. That has always been the marker for having a physical presence that then causes a store/business to have to charge sales tax - Not simply having a distribution center in the state, a warehouse or any other presence.

No store front in the state, no state taxes. Simple. In the past, anyway.

According to whom? What case or statutory law established this as the physical presence test?

[AnUnidentifiedMale]

Originally Posted by sol11

....Rick Perry hatefest......

Not at all. My point in posting this was to highlight the fact that a lot of conservatives here had a conniption a few weeks ago when California passed the same type of law.

[sol11]

Originally Posted by AnUnidentifiedMale

Not at all. My point in posting this was to highlight the fact that a lot of conservatives here had a conniption a few weeks ago when California passed the same type of law.

Perry vetoes a stand-alone Amazon bill during the regular session, but the bill was tagged to a needed bugetary bill during the called special session. Because there was a veto-proof coalition on that bill, Perry signed it into law just to get the budget that the state needed.

Sometime stuff happens. Obama calls it "compromise"...

[Glitch]

Originally Posted by SGrey

Because up until now, physical presence has always been defined by having an actual, live and in the flesh, retail store that a customer can walk into and browse. That has always been the marker for having a physical presence that then causes a store/business to have to charge sales tax - Not simply having a distribution center in the state, a warehouse or any other presence.

No store front in the state, no state taxes. Simple. In the past, anyway.

Many municipalities also have an inventory tax, which includes retailers and their warehouses. The more they keep in stock, the more tax they have to pay.

[SGrey]

Originally Posted by Drover

According to whom? What case or statutory law established this as the physical presence test?

1992 Supreme Court ruling over mail-order businesses that said when mailing to another state the business didn't have to charge sales tax if they didn't have a physical presence.

Having said that, I will add, that in recent years the definition of physical presence been altered to include things like warehouses. The idea being if you have meet the criteria for a 'nexus' in a state then you have to charge sales tax.

However, it has clearly not been applied to internet companies before. Had it, we wouldn't be having this conversation and the move to force Amazon wouldn't be making news at all. It would be old hat.

Why they don't apply it, I can't say. I've never had cause to learn the why.

Originally Posted by Glitch

Many municipalities also have an inventory tax, which includes retailers and their warehouses. The more they keep in stock, the more tax they have to pay.

True enough. I have no real problem with something like that being implemented either even though we all know the business would find a way to pass the cost onto the customer. But the upfront customer hit offends my sensibilities.

[Drover]

Originally Posted by SGrey

1992 Supreme Court ruling over mail-order businesses that said when mailing to another state the business didn't have to charge sales tax if they didn't have a physical presence.

Having said that, I will add, that in recent years the definition of physical presence been altered to include things like warehouses. The idea being if you have meet the criteria for a 'nexus' in a state then you have to charge sales tax.

However, it has clearly not been applied to internet companies before. Had it, we wouldn't be having this conversation and the move to force Amazon wouldn't be making news at all. It would be old hat.

Why they don't apply it, I can't say. I've never had cause to learn the why.

First, I'm not sure how you mean "in recent years the definition of physical presence has been altered" since the USSC hasn't even revisited the issue since the Quill case in 1992. In fact the USSC established as far back as 1960 that merely having salesmen in a state establishes a sufficient nexus to empower that state to collect taxes from an out-of-state business, never mind a physical presence such as a distribution center.

And yes it has been applied to internet companies before. My FIL runs an internet business on the side, and he has to collect taxes on sales made in his state even though his "store" consists of a storage room in the office of his "real" business. It's just that Amazon has heretofore had the clout to fight it in many states even where they have a physical presence. And now cash-strapped states are starting to push back.

[Glitch]

Originally Posted by Drover

First, I'm not sure how you mean "in recent years the definition of physical presence has been altered" since the USSC hasn't even revisited the issue since the Quill case in 1992. In fact the USSC established as far back as 1960 that merely having salesmen in a state establishes a sufficient nexus to empower that state to collect taxes from an out-of-state business, never mind a physical presence such as a distribution center.

And yes it has been applied to internet companies before. My FIL runs an internet business on the side, and he has to collect taxes on sales made in his state even though his "store" consists of a storage room in the office of his "real" business. It's just that Amazon has heretofore had the clout to fight it in many states even where they have a physical presence. And now cash-strapped states are starting to push back.

A state's statute authority extends to its borders and no further. States cannot impose a tax on businesses, or individuals, not physically located in their state.

[Drover]

Originally Posted by Glitch

A state's statute authority extends to its borders and no further. States cannot impose a tax on businesses, or individuals, not physically located in their state.

That's not entirely accurate. Having agents in the state gives the state sufficient authority to collect taxes from a business that sells in the state. You might also do well to familiarize yourself with long-arm statutes and the extent to which they can be enforced. The minimal nexus under the Due Process clause is even more broad than under the Interstate Commerce clause that governs the issue of collecting taxes.