Deciding and then undeciding by not deciding
Back in 1992, the U.S. Supreme Court made a decision in a case known as Quill Corp v North Dakota. North Dakota was attempting to impose a use tax on all sales that were shipped into the state. A use tax is designed to discourage businesses and individuals from buying items from sources where they won't have to pay sales tax. FYI, here in California, the Revenue Code requires all taxpayers to self-report and pay use tax on all of their purchases where sales tax was not collected.
The court's ruling was that North Dakota could not impose the use tax on Quill Corp because the company did not have a "physical presence" in the state. As a result of that ruling, most online retailers have not collected sales taxes in states where they do not have the required physical presence.
Now by choosing to not hear a case, the court may have made a major change in how states attempt to collect use tax. Colorado had passed a law designed to compel companies who sell to customers in Colorado without a physical presence in the state to either collect the sales tax, or report information on the purchases to Colorado. That way the state will have a record that they can use to collect the tax themselves.
The Data & Marketing Association filed a suit challenged the law. Ultimately a federal appeals court ruled in favor of Colorado. With the Supreme Court's decision to refuse to hear an appeal of that ruling, the case is over. Those who sell in Colorado must either collect the tax or furnish the information.
Considering how some states have grown more dependent upon sales tax revenue for their budgets to balance, the trend in those states will undoubtedly be to enact similar laws.
* * *
Meanwhile the California Supreme Court gave a victory to online hotel sites in deciding that the City of San Diego cannot force them to collect a hotel occupancy tax for the amount they charge when they sell a room on behalf of a local hotel.
These sites like Expedia, Hotwire and so on, make money by negotiating a wholesale price on the rooms found on their sites and then marking up that price by as much as 22%. The person booking the room is charged the occupancy tax on the higher price and the online site pockets that money.
San Diego and other cities wanted to collect that occupancy tax on the full price. The court's ruling will allow the cities to go after the hotel owners directly, and the online sites may have to reimburse them for the tax, depending on the terms of their contract.
* * *
Donald Trump says he doesn't need the daily intelligence briefings that every previous president received, because he's a smart guy.
Plenty of his predecessors were also very smart men, many of them far smarter in terms of experience with geopolitics and raw IQ. They didn't beg off from those briefings and Trump shouldn't avoid them either.
Things change rapidly on the world stage and the vast increase in the speed at which information travels has made those changes more time-sensitive than ever.
Trump has already demonstrated that he is less than fully informed by his phone call with the president of Taiwan and the resulting strain in the relationship between the U.S. and the People's Republic of China. You don't unilaterally alter foreign policy BEFORE taking office.
I fear for our future if he keeps going in this direction.
The court's ruling was that North Dakota could not impose the use tax on Quill Corp because the company did not have a "physical presence" in the state. As a result of that ruling, most online retailers have not collected sales taxes in states where they do not have the required physical presence.
Now by choosing to not hear a case, the court may have made a major change in how states attempt to collect use tax. Colorado had passed a law designed to compel companies who sell to customers in Colorado without a physical presence in the state to either collect the sales tax, or report information on the purchases to Colorado. That way the state will have a record that they can use to collect the tax themselves.
The Data & Marketing Association filed a suit challenged the law. Ultimately a federal appeals court ruled in favor of Colorado. With the Supreme Court's decision to refuse to hear an appeal of that ruling, the case is over. Those who sell in Colorado must either collect the tax or furnish the information.
Considering how some states have grown more dependent upon sales tax revenue for their budgets to balance, the trend in those states will undoubtedly be to enact similar laws.
* * *
Meanwhile the California Supreme Court gave a victory to online hotel sites in deciding that the City of San Diego cannot force them to collect a hotel occupancy tax for the amount they charge when they sell a room on behalf of a local hotel.
These sites like Expedia, Hotwire and so on, make money by negotiating a wholesale price on the rooms found on their sites and then marking up that price by as much as 22%. The person booking the room is charged the occupancy tax on the higher price and the online site pockets that money.
San Diego and other cities wanted to collect that occupancy tax on the full price. The court's ruling will allow the cities to go after the hotel owners directly, and the online sites may have to reimburse them for the tax, depending on the terms of their contract.
* * *
Donald Trump says he doesn't need the daily intelligence briefings that every previous president received, because he's a smart guy.
Plenty of his predecessors were also very smart men, many of them far smarter in terms of experience with geopolitics and raw IQ. They didn't beg off from those briefings and Trump shouldn't avoid them either.
Things change rapidly on the world stage and the vast increase in the speed at which information travels has made those changes more time-sensitive than ever.
Trump has already demonstrated that he is less than fully informed by his phone call with the president of Taiwan and the resulting strain in the relationship between the U.S. and the People's Republic of China. You don't unilaterally alter foreign policy BEFORE taking office.
I fear for our future if he keeps going in this direction.
posted by me at 1:28 PM
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