LuckyPhow
LuckyPhow
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December 29th, 2016 at 8:42:18 AM permalink
Well, well, well. Just when I thought this year cannot get any crazier than it already is, along comes this completely bizarre court case from Florida. Here are the basics:

A guy in California buys his mom, who lives in Texas, flowers from an online florist-nursery in Alabama. The transaction occurs on a computer operated by a Florida corporation in Florida. So, Florida gets to collect sales tax, right? According to the Florida Supreme Court, the answer is, "Yup!" The florist says, "SCOTUS, help!" Case not yet accepted; pending at present. Here's the link:

US Supreme Court Petition

Of course, we know Florida courts are crazy, but this sure takes the cake. (Can't they just busy themselves trying to untie the Gordian Knot currently presented by Florida gaming?) Sheesh!

If SCOTUS rules in favor of Florida, the State of Washington should be able to say, "Amazon HQ is in this state, so we want Washington State sales tax collected from all Amazon sales worldwide."

Of course, there are no possible impacts on online gambling, off-track betting, or other gaming industry activities, right? (Legal beagles, please add your 2 cents, as appropriate.) Are we having fun yet?
billryan
billryan
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December 29th, 2016 at 9:18:14 AM permalink
The Alabama company should move the jobs from Florida, to a state that doesn't collect sales tax.
I used to spend over $100,000 a year with Heritage Auctions, based in Dallas. Then they decided to open a Manhattan showroom and charging everyone in. NY almost 9percent sales tax on items shipped from Texas.
They went from my number two supplier to far down the chain
The difference between fiction and reality is that fiction is supposed to make sense.
MathExtremist
MathExtremist
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December 29th, 2016 at 11:27:42 AM permalink
Quote: LuckyPhow

Well, well, well. Just when I thought this year cannot get any crazier than it already is, along comes this completely bizarre court case from Florida. Here are the basics:

A guy in California buys his mom, who lives in Texas, flowers from an online florist-nursery in Alabama. The transaction occurs on a computer operated by a Florida corporation in Florida. So, Florida gets to collect sales tax, right? According to the Florida Supreme Court, the answer is, "Yup!" The florist says, "SCOTUS, help!" Case not yet accepted; pending at present. Here's the link:

US Supreme Court Petition

Of course, we know Florida courts are crazy, but this sure takes the cake. (Can't they just busy themselves trying to untie the Gordian Knot currently presented by Florida gaming?) Sheesh!

If SCOTUS rules in favor of Florida, the State of Washington should be able to say, "Amazon HQ is in this state, so we want Washington State sales tax collected from all Amazon sales worldwide."

Of course, there are no possible impacts on online gambling, off-track betting, or other gaming industry activities, right? (Legal beagles, please add your 2 cents, as appropriate.) Are we having fun yet?

If you take that logic to its natural conclusion, every state that contains part of the Internet backbone gets to tax all the commercial transactions that flow through that pipe in its state. And every credit charge transaction gets taxed by whatever state hosts the Visa or Mastercard servers. And every telephone transaction gets taxed by all of the states that the phone line travels through. And if I'm running a virtually hosted e-commerce site on Amazon's AWS, and the computers that actually execute my website's code are dynamically allocated and therefore may be in any of five different datacenters in five different states, then each of those states gets to tax the specific transactions that occurred while my website was executing within their states. Heck, while I'm at it, if an attorney is on a cross-country flight and bills his client 5 hours of work for drafting a brief, each of the flyover states gets to tax those billings based on the time the lawyer was in its airspace...

Except the SCOTUS holding in Bellas Hess says precisely the opposite:
Quote: Bellas Hess

The Commerce Clause prohibits a State from imposing the duty of use tax collection and payment upon a seller whose only connection with customers in the State is by common carrier or by mail. The court stated that "the Court has never held that a State may impose the duty of use tax collection and payment upon a seller whose only connection with customers in the State is by common carrier or the United States mail."


https://en.wikipedia.org/wiki/National_Bellas_Hess_v._Illinois

In this case, neither the seller nor the customer are in the taxing state (Florida) at all, so I don't see how that "3rd-party" state has any claim to insert itself in the transaction. If SCOTUS were to hold otherwise, or not grant cert at all, it would overturn decades of jurisprudence and open the door to all of the nonsense I listed above. I haven't tracked down the Florida court opinion yet, but I don't think there's been any intervening law so a SCOTUS GVR isn't appropriate (and "GVR-in-light-of-nothing" isn't the most favorite idea at SCOTUS; see Youngblood v West Virginia, especially Scalia's dissent). But it still seems that SCOTUS should grant cert, smack the Florida court around for enabling its state treasurer's unconstitutional greedy overreach, then vacate and remand.
"In my own case, when it seemed to me after a long illness that death was close at hand, I found no little solace in playing constantly at dice." -- Girolamo Cardano, 1563
billryan
billryan
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December 29th, 2016 at 1:42:10 PM permalink
As I understand it, if the seller has a physical presence in a state, that state can collect sales tax. I'd imagine a call center is considered a physical presence.
I might be mistaken.
The difference between fiction and reality is that fiction is supposed to make sense.
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