MA asserts nexus over internet vendors

[Rich Carreiro]

Fascinating. MA has decided to declare that an out-of-state internet
vendor (as opposed to non-internet mail order vendor) who makes too many
sales in MA has taxable nexus.

They even assert that the code of a webapp being downloaded to a
computer in MA means the vendor has a physical presence in MA.

http://www.mass.gov/dor/businesses/help-and-resources/legal-library/directives/directives-by-years/2017-directives/dd-17-1.html

--
Rich Carreiro rlc-...@rlcarr.com

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[ira smilovitz]

On Monday, April 3, 2017 at 5:13:44 PM UTC-4, Rich Carreiro wrote:
> Fascinating. MA has decided to declare that an out-of-state internet
> vendor (as opposed to non-internet mail order vendor) who makes too many
> sales in MA has taxable nexus.
>
> They even assert that the code of a webapp being downloaded to a
> computer in MA means the vendor has a physical presence in MA.
>
> http://www.mass.gov/dor/businesses/help-and-resources/legal-library/directives/directives-by-years/2017-directives/dd-17-1.html
>
> --
> Rich Carreiro rlc-...@rlcarr.com
>
> --

I'm not a lawyer, but I think their position is defensible. I'm actually surprised that MA did this first and not NY or CA.

Ira Smilovitz, EA

[Stuart O. Bronstein]

ira smilovitz <ira.sm...@gmail.com> wrote:
> Rich Carreiro wrote:

>> Fascinating. MA has decided to declare that an out-of-state
>> internet vendor (as opposed to non-internet mail order vendor)
>> who makes too many sales in MA has taxable nexus.
>>
>> They even assert that the code of a webapp being downloaded to a
>> computer in MA means the vendor has a physical presence in MA.
>>
>> http://www.mass.gov/dor/businesses/help-and-resources/legal-librar
>> y/directives/directives-by-years/2017-directives/dd-17-1.html
>

> I'm not a lawyer, but I think their position is defensible. I'm
> actually surprised that MA did this first and not NY or CA.

The Supreme Court has used what it calls the "purposefully availed"
test - when a vendor knowingly targets purchasers is a particular
state, that state can claim jurisdiction over the vendor for sales
done in that state. In other words a state has jurisdiction when
someone "purposefully avails itself of the privilege of conducting
activities" in the state.

For example in McGee v. International Life Ins.Co. (1957) 355 U.S.
220, a life insurance company was allowed to be sued in a state where
it had sent one letter to solicit business from the plaintiff's
decedent.

The theory appears to be that if a vendor does more than 100
transactions in a year in Massachusetts, amounting to more than
$500,000, it can be presumed that it is targeting or intentionally
soliciting business from that state. It's hard to say how the courts
would treat this - it could be that most cases the law would be
approved. But there could well be individual situations where the
courts would say the law goes too far.


--
Stu
http://DownToEarthLawyer.com

[John Levine]

>The theory appears to be that if a vendor does more than 100
>transactions in a year in Massachusetts, amounting to more than
>$500,000, it can be presumed that it is targeting or intentionally
>soliciting business from that state. It's hard to say how the courts
>would treat this - it could be that most cases the law would be
>approved. But there could well be individual situations where the
>courts would say the law goes too far.

That numerical argument seems like a non-starter. Quill sold $1M/yr
to 3000 customers in North Dakota, the court found against the state
anyway, and that was 1992 dollars, worth about $1.7M today. The
targeting arguments also seem weak, since Quill certainly knew it was
sending catalogs and orders to addresses in N.D. and it didn't matter.

As far as I can make out the Mass. argument, they're saying this is
different from Quill because Quill's only contacts were through common
carriers, presumably the post office and maybe UPS or Fedex. These
sales are over the Internet, which is not a common carrier. I don't
know whether that's meaningful or just pixie dust.

In Quill the court also seemed to say that dealing with all the state
tax rules would be burdensome, but with 25 years of advances in
computers and networking, that's less clear, particularly for a state
like Mass. that charges the same tax rate statewide.

R's,
John

PS: I have occasionally made taxable sales within New York, where the
rate varies by county and city, and have wasted time squinting at
Google maps to guess which town and so which county an address was
really in.

[Jeff Wisnia]

ira smilovitz wrote:
> On Monday, April 3, 2017 at 5:13:44 PM UTC-4, Rich Carreiro wrote:
>> Fascinating. MA has decided to declare that an out-of-state internet
>> vendor (as opposed to non-internet mail order vendor) who makes too many
>> sales in MA has taxable nexus.
>>
>> They even assert that the code of a webapp being downloaded to a
>> computer in MA means the vendor has a physical presence in MA.
>>
>> http://www.mass.gov/dor/businesses/help-and-resources/legal-library/directives/directives-by-years/2017-directives/dd-17-1.html
>>
>> --
>> Rich Carreiro rlc-...@rlcarr.com
>>
>> --
>
> I'm not a lawyer, but I think their position is defensible. I'm actually surprised that MA did this first and not NY or CA.
>
> Ira Smilovitz, EA
>

That's why I call it "Taxachusetts", and the many lousy automobile
drivers here I call "Massholes".

Jeff
--
Jeffry Wisnia
(W1BSV + Brass Rat '57 EE)
The speed of light is 1.8*10^12 furlongs per fortnight.

[jmfbahciv]

Jeff Wisnia wrote:
>
>
> ira smilovitz wrote:
>> On Monday, April 3, 2017 at 5:13:44 PM UTC-4, Rich Carreiro wrote:
>>> Fascinating. MA has decided to declare that an out-of-state internet
>>> vendor (as opposed to non-internet mail order vendor) who makes too many
>>> sales in MA has taxable nexus.
>>>
>>> They even assert that the code of a webapp being downloaded to a
>>> computer in MA means the vendor has a physical presence in MA.
>>>
>>> http://www.mass.gov/dor/businesses/help-and-resources/legal-library/direct
ives/directives-by-years/2017-directives/dd-17-1.html
>>>
>>> --
>>> Rich Carreiro rlc-...@rlcarr.com
>>>
>>> --
>>
>> I'm not a lawyer, but I think their position is defensible. I'm actually
surprised that MA did this first and not NY or CA.
>>
>> Ira Smilovitz, EA
>>
> That's why I call it "Taxachusetts", and the many lousy automobile
> drivers here I call "Massholes".

Massachusetts seemed to be the "first field test site" for US tax
law changes.

/BAH

[Adam H. Kerman]

Rich Carreiro <rlc-...@rlcarr.com> wrote:

>Fascinating. MA has decided to declare that an out-of-state internet
>vendor (as opposed to non-internet mail order vendor) who makes too many
>sales in MA has taxable nexus.

I read it. As they're basing it on Quill v North Dakota which is now 25
years old, they're not breaking new ground. I've always been surprised
that lots of other states didn't amend their sales tax laws to take advantage
of the favorable ruling. My state lost Bellas Hess 50 years ago and sales
tax laws are still the same today. Well, we have a retailers occupation tax
as the sales tax was unconstitutional under the 1870 constitution, not
an issue under the 1970 constitution.

>They even assert that the code of a webapp being downloaded to a
>computer in MA means the vendor has a physical presence in MA.

Hah! It's because the vendor asserts ownership of the ordering application.
Let's see if a vendor using an open source ordering application can
successfully assert that there's no nexus. Software copyright and patenting
has long been abused and they can't have it both ways.

>http://www.mass.gov/dor/businesses/help-and-resources/legal-library/directives/directives-by-years/2017-directives/dd-17-1.html

Technical question about sales versus use taxes: If the state asserts
nexus, is the duty imposed upon the retailer to remit taxes always going
to be a sales tax and not a use tax, or are there exceptional circumstances
in which the vendor is remitting a use tax? I always think of a use tax
as being levied on the purchaser and not the retailer.

[Stuart O. Bronstein]

"Adam H. Kerman" <a...@chinet.com> wrote:

> I read it. As they're basing it on Quill v North Dakota which is
> now 25 years old, they're not breaking new ground. I've always
> been surprised that lots of other states didn't amend their sales
> tax laws to take advantage of the favorable ruling. My state lost
> Bellas Hess 50 years ago and sales tax laws are still the same
> today. Well, we have a retailers occupation tax as the sales tax
> was unconstitutional under the 1870 constitution, not an issue
> under the 1970 constitution.

I'm surprised states haven't gotten together and agreed to collect
taxes for each other. They could agree, for example, that states
would collect tax at their own rate for any sale by a person located
in that state, and that the taxes collected would go to the state
where the buyer was located. Or they could arrange it differently.
But they could certainly do something. But they haven't, as far as
I'm aware.

> Technical question about sales versus use taxes: If the state
> asserts nexus, is the duty imposed upon the retailer to remit
> taxes always going to be a sales tax and not a use tax, or are
> there exceptional circumstances in which the vendor is remitting a
> use tax? I always think of a use tax as being levied on the
> purchaser and not the retailer.

The answer to your question could depend on the law of the specific
state you are talking about. At least here in California, the use
tax is just a backup way for the state to collect tax in case there
is some confusion and sales tax is not collected. It's only one or
the other, and they really don't care which, as long as they get to
collect. The sales tax is always collected by the retailer. The use
tax is imposed on the buyer when no sales tax was collected.

--
Stu
http://DownToEarthLawyer.com

[jmfbahciv]

Stuart O. Bronstein wrote:
> "Adam H. Kerman" <a...@chinet.com> wrote:
>
>> I read it. As they're basing it on Quill v North Dakota which is
>> now 25 years old, they're not breaking new ground. I've always
>> been surprised that lots of other states didn't amend their sales
>> tax laws to take advantage of the favorable ruling. My state lost
>> Bellas Hess 50 years ago and sales tax laws are still the same
>> today. Well, we have a retailers occupation tax as the sales tax
>> was unconstitutional under the 1870 constitution, not an issue
>> under the 1970 constitution.
>
> I'm surprised states haven't gotten together and agreed to collect
> taxes for each other. They could agree, for example, that states
> would collect tax at their own rate for any sale by a person located
> in that state, and that the taxes collected would go to the state
> where the buyer was located. Or they could arrange it differently.
> But they could certainly do something. But they haven't, as far as
> I'm aware.

Michigan and surrounding states have some agreement. If I bought
something from a state which had a higher sales tax, I do not
have to include it on the Michigan income tax form. If I buy
something out of state which has a lower sales tax, then I have
to include the difference on the Michigan income tax form MI-1040,
line 23. The title of the line is "Use Tax" but it's really a
sales tax.

I do not know how Michigan and the other states interact w.r.t.
this money.

/BAH

[John Levine]

In article <XnsA759E64A499D3...@130.133.4.11>,

>I'm surprised states haven't gotten together and agreed to collect
>taxes for each other. They could agree, for example, that states
>would collect tax at their own rate for any sale by a person located
>in that state, and that the taxes collected would go to the state
>where the buyer was located. Or they could arrange it differently.
>But they could certainly do something. But they haven't, as far as
>I'm aware.

It may have something to do with the detail that Article I, Section 9
of the Constitution forbids doing that. Even if they could come up
with a fiddle to avoid the constitutional problem, e.g. claim that
they're merely doing it as the agent of the target state, the states
without sales tax would not join so Amazon et al would migrate to
Delaware, Montana, New Hampshire, and Oregon.

Anyone interested in this topic should read the Quill decision.
It's not very long:

https://www.law.cornell.edu/supct/html/91-0194.ZO.html

The previous Bellas Hess case forbade interstate sales tax collection
on two grounds, due process and commerce clause. Quill reversed on
due process, but found for N.D. on commerce clause grounds. The
decision pointedly noted that Congress (to whom the commerce clause
assigns regulation of interstate commerce) could fix this by
legislation.

Simply requiring all mail order vendors to collect and remit tax would
be a horror show for small merchants. DC and 45 states have state
sales taxes. In many states, counties and cities can add their own
tax, including a 46th, Alaska, which has no state tax, so figuring out
the correct rate on a sale to a state like New York with separate
rates for every county and for several dozen cities is not easy. If
you are Amazon or Wal-Mart or Staples or Nordstrom, you can subscribe
to tax software that does the calculations, and tie it into your order
system so it asks the appropriate questions, e.g., since my zip code
covers addresses in three counties and I have a PO box, I often get a
popup question asking which county I'm physically in. But that
service costs something like $100,000/yr.

Congress could address this by creating a clearinghouse where small
vendors can send an annual check and a spreadsheet saying how much was
for each state, and requiring states to set a single average rate for
out of state vendors if they want to collect tax, but 25 years after
Quill, no effort to do that has gone anywhere.

R's,
John

[John Levine]

In article <PM00054D5...@aca40f2d.ipt.aol.com>,
>Michigan and surrounding states have some agreement. ...

> The title of the line is "Use Tax" but it's really a sales tax.

Not really. You are supposed to pay use tax on any goods you import
into your state, but to avoid double taxation you can credit sales tax
already paid somewhere else. This doesn't require any coordination
among the states.

New York and New Jersey used to have a voluntary reciprocal agreement
where merchants in one state would collect use tax for goods delivered
into the other state, and the home state would arrange to collect and
remit the tax to the other state. It ended in 2010. Since it wasn't
mandatory, I don't see why any vendors would have bothered.

The NY state income tax form now has a line to report use tax, and a
default formula if you leave it blank. My tax accountant tells me
that it would be a poor idea to write down $0. I added up my mail
order purchases one year, found the default was less than the actual,
and have taken the default ever since.

R's,
John

[Stan Brown]

On Mon, 17 Apr 2017 11:34:49 EDT, John Levine wrote:
>
> The NY state income tax form now has a line to report use tax, and a
> default formula if you leave it blank. My tax accountant tells me
> that it would be a poor idea to write down $0. I added up my mail
> order purchases one year, found the default was less than the actual,
> and have taken the default ever since.

I think of myself as buying a lot through the Internet, and Amazon
fails surprisingly often to collect NYS tax. Nevertheless, the
formula amount has been more than the amount I actually owe, every
year since I started keeping track several years ago.

Like you, I suspect writing $0 would be poor strategy, and anyway
it's not true. But if I'm called in to account for the number I
actually write, I've got the records.

--
Stan Brown, Oak Road Systems, Tompkins County, New York, USA
http://BrownMath.com/
http://OakRoadSystems.com/
Shikata ga nai...

[MTW]

On Sunday, April 16, 2017 at 10:43:33 PM UTC-7, Stuart O. Bronstein wrote:

> I'm surprised states haven't gotten together and agreed to collect
> taxes for each other. They could agree, for example, that states
> would collect tax at their own rate for any sale by a person located
> in that state, and that the taxes collected would go to the state
> where the buyer was located. Or they could arrange it differently.
> But they could certainly do something. But they haven't, as far as
> I'm aware.

Roughly half the states have joined the Streamlined Sales Tax initiative, but unfortunately this doesn't include some of the larger ones like CA or NY. Here's a link:

http://www.streamlinedsalestax.org/index.php?page=About-Us

[jmfbahciv]

John Levine wrote:
> In article <PM00054D5...@aca40f2d.ipt.aol.com>,
>>Michigan and surrounding states have some agreement. ...
>> The title of the line is "Use Tax" but it's really a sales tax.
>
> Not really. You are supposed to pay use tax on any goods you import
> into your state, but to avoid double taxation you can credit sales tax
> already paid somewhere else. This doesn't require any coordination
> among the states.

Heh... you're right. The explanation in the 2016 MI-1040 instructions
have changed. It's also called a companion tax and a remote sales
tax. The date 1-Oct-2015 is mentioned w.r.t. internet purchases; I
suspect some law was passed???

>
> New York and New Jersey used to have a voluntary reciprocal agreement
> where merchants in one state would collect use tax for goods delivered
> into the other state, and the home state would arrange to collect and
> remit the tax to the other state. It ended in 2010. Since it wasn't
> mandatory, I don't see why any vendors would have bothered.
>
> The NY state income tax form now has a line to report use tax, and a
> default formula if you leave it blank. My tax accountant tells me
> that it would be a poor idea to write down $0. I added up my mail
> order purchases one year, found the default was less than the actual,
> and have taken the default ever since.

I wrote $0 this year because I didn't order anything. Other years,
the stuff I've ordered was always less than the smallest default.

And, thanks to you, I just learned that the shipping and handling charges
have to be included when calculating the tax.

/BAH

[Arthur Rubin]

On Monday, April 17, 2017 at 6:31:54 PM UTC-7, MTW wrote:
> On Sunday, April 16, 2017 at 10:43:33 PM UTC-7, Stuart O. Bronstein wrote:
>
> > I'm surprised states haven't gotten together and agreed to collect
> > taxes for each other. They could agree, for example, that states
> > would collect tax at their own rate for any sale by a person located
> > in that state, and that the taxes collected would go to the state
> > where the buyer was located. Or they could arrange it differently.
> > But they could certainly do something. But they haven't, as far as
> > I'm aware.
>
> Roughly half the states have joined the Streamlined Sales Tax initiative, but unfortunately this doesn't include some of the larger ones like CA or NY.

Probably has something to do with unusual lists of taxable and nontaxable items, and a largw number of distinct tax rates.
--
Arthur Rubin, AFSP, CRTP, Brea, CA

[Stuart O. Bronstein]

"D. Stussy" <spam+ne...@bde-arc.ampr.org> wrote:

> I don't see how this is valid. Without a presence in the state, I
> don't see how a state can reach OUTSIDE ITS BORDERS to impose its
> law on an "alien" (with respect to the state) entity.

If someone in one state sends a bomb or poison into another state, and
someone is injured, the state where the damage took place surely has
jurisdiction over the person who perpetrated it, even if he never
stepped foot in that state. It's the same theory.

> It's not the vendor reaching into the state, but the residents of
> the state reaching outside the state to the vendor. Big
> difference.

When that's the case, you're right. But when a vendor actively and
knowingly solicits business in a state, it can be subject to the laws
of that state if it causes damage or injury there.

[John Levine]

In article <XnsA780C206879F9...@130.133.4.11>,

Stuart O. Bronstein <spam...@lexregia.com> wrote:
>When that's the case, you're right. But when a vendor actively and
>knowingly solicits business in a state, it can be subject to the laws
>of that state if it causes damage or injury there.

Except that Quill v. N.D. says for sales tax purposes, if they reach
via the post office or common carrier, it doesn't count, except maybe
it might.

The decision isn't particularly long, but I find it hard to parse out
the nuance. It's clear that the court expected the Congress to sort this
out legislatively, but after 25 years I'm not holding my breath.

https://www.law.cornell.edu/supct/html/91-0194.ZO.html

R's,
John

[Stuart O. Bronstein]

John Levine <jo...@iecc.com> wrote:
> Stuart O. Bronstein <spam...@lexregia.com> wrote:

>>When that's the case, you're right. But when a vendor actively
>>and knowingly solicits business in a state, it can be subject to
>>the laws of that state if it causes damage or injury there.
>
> Except that Quill v. N.D. says for sales tax purposes, if they
> reach via the post office or common carrier, it doesn't count,
> except maybe it might.

You're right. They say that, for sales tax purposes, only
communicating by mail and delivering goods by common carrier is not a
sufficient contact with the state to impose sales tax, because it is
a burden on interstate commerce. For criminal and other kind of
cases, the interstate commerce issue does not exist, so jurisdiction
may be proper in those cases.

It's a close question whether it's fair because in-state companies do
have to collect the tax, or its unfair because a company doing
interstate business has to keep track of and interact with so many
tax systems. But the Court made that decision.

--
Stu
http://DownToEarthLawyer.com

[John Levine]

In article <XnsA780D9C7FE7BB...@130.133.4.11>,

Stuart O. Bronstein <spam...@lexregia.com> wrote:
>It's a close question whether it's fair because in-state companies do
>have to collect the tax, or its unfair because a company doing
>interstate business has to keep track of and interact with so many
>tax systems. But the Court made that decision.

Remitting sales tax can be very painful. I used to sell books mail
order, within NY state every county any many cities set their own tax
rates, and I'm supposed to report everything by tax jurisdiction so
they can allocate the $12 I sent them. I gather that 50 state sales
tax software costs on the order of $100K/yr.

Another response to Quill would have been for states to simplify
collection, e.g., a single rate per state for out of state sales,
and a central clearinghouse so you can send in one form and one
check rather than 45. There's been some motion toward that but
the big states like NY and CA (both of which have a zillion
different rates) haven't signed on.

R's,
John

[Barry Margolin]

In article <og8b8g$94v$1...@gal.iecc.com>, John Levine <jo...@iecc.com>
wrote:

> In article <XnsA780D9C7FE7BB...@130.133.4.11>,
> Stuart O. Bronstein <spam...@lexregia.com> wrote:
> >It's a close question whether it's fair because in-state companies do
> >have to collect the tax, or its unfair because a company doing
> >interstate business has to keep track of and interact with so many
> >tax systems. But the Court made that decision.
>
> Remitting sales tax can be very painful. I used to sell books mail
> order, within NY state every county any many cities set their own tax
> rates, and I'm supposed to report everything by tax jurisdiction so
> they can allocate the $12 I sent them. I gather that 50 state sales
> tax software costs on the order of $100K/yr.

Someone mentioned earlier that the criteria is 100+ transactions and
$500K per year. This presumably minimizes the burden on small
proprietors like you were. On the other hand, a nationwide retailer like
Amazon should be able to afford to track this.

--
Barry Margolin
Arlington, MA

[John Levine]

In article <barmar-3CE2D8....@88-209-239-213.giganet.hu>,

Barry Margolin <bar...@alum.mit.edu> wrote:
>> I gather that 50 state sales tax software costs on the order of $100K/yr.
>
>Someone mentioned earlier that the criteria is 100+ transactions and
>$500K per year. This presumably minimizes the burden on small
>proprietors like you were. On the other hand, a nationwide retailer like
>Amazon should be able to afford to track this.

Most of the largest mail order retailers pay sales tax now. Amazon
stopped dodging sales tax years ago and now has warehouses all over
the place, so they have physical nexus in most states. Staples and
Walmart and LL Bean have physical stores. The target of this tax is
the next tier down.

In case it's unclear, I think the mail order sales tax exemption is a
crock, something that happened accidentally and is now considered to
be a law of nature, much like the mortgage tax exemption. Having been
the mayor of my village, which depends on state sales tax for a large
chunk of its budget, I would really prefer that our local stores that
hire local staff and pay local property taxes compete on the same
terms as anonymous giants with warehouses in Pennsylvania.

R's,
John

PS: I'm scratching my head about how MA plans to enforce this. The
post office isn't going to give them delivery records, and it's going
to be a challenge if they try to send subpoenas demanding records from
random out of state businesses.

[Arthur Rubin]

On Thursday, May 25, 2017 at 9:35:13 PM UTC-7, John Levine wrote:
> Another response to Quill would have been for states to simplify
> collection, e.g., a single rate per state for out of state sales,
> and a central clearinghouse so you can send in one form and one
> check rather than 45. There's been some motion toward that but
> the big states like NY and CA (both of which have a zillion
> different rates) haven't signed on.

CA doesn't have "a zillion" different rates. I don't recall the exact number, but it's less than 30.

--
Arthur Rubin, Brea, CA
(Tax preparation services are not subject to sales tax in California, or I would probably know the exact number of tax ratea)

[John Levine]

In article <5defcd1f-ee7f-4f2d...@googlegroups.com>,

Arthur Rubin <ronni...@sprintmail.com> wrote:
>> check rather than 45. There's been some motion toward that but
>> the big states like NY and CA (both of which have a zillion
>> different rates) haven't signed on.
>
>CA doesn't have "a zillion" different rates. I don't recall the exact number, but it's less than 30.

Seems like a zillion compared to Massachusetts and Ohio each which has (1) one.

California may only have 30 rates, but the BOE's rate spreadsheet has
almost 1800 entries to tell you what rate applies in what city. It's
even worse than that because post office names and five digit zip
codes don't match city or county boundaries. My rural post office
covers parts of three counties so when I'm ordering stuff online, web
sites sometimes pop up a window asking which county I'm in.

I think that if you standardize the address and get its nine digit zip
code, that's fine enough grain to tell what the rate is, but now you
need an address standardization application with access to the USPS
address database, and a tax to zip+9 database.

Without a simplified system with one averaged rate per state, you'd
have to be pretty big to afford the overhead of all-state tax
collection.

R's,
John

[jmfbahciv]

John Levine wrote:
> In article <barmar-3CE2D8....@88-209-239-213.giganet.hu>,
> Barry Margolin <bar...@alum.mit.edu> wrote:
>>> I gather that 50 state sales tax software costs on the order of $100K/yr.
>>
>>Someone mentioned earlier that the criteria is 100+ transactions and
>>$500K per year. This presumably minimizes the burden on small
>>proprietors like you were. On the other hand, a nationwide retailer like
>>Amazon should be able to afford to track this.
>
> Most of the largest mail order retailers pay sales tax now. Amazon
> stopped dodging sales tax years ago and now has warehouses all over
> the place, so they have physical nexus in most states. Staples and
> Walmart and LL Bean have physical stores. The target of this tax is
> the next tier down.
>
> In case it's unclear, I think the mail order sales tax exemption is a
> crock, something that happened accidentally and is now considered to
> be a law of nature, much like the mortgage tax exemption. Having been
> the mayor of my village, which depends on state sales tax for a large
> chunk of its budget, I would really prefer that our local stores that
> hire local staff and pay local property taxes compete on the same
> terms as anonymous giants with warehouses in Pennsylvania.
>
> R's,
> John
>
> PS: I'm scratching my head about how MA plans to enforce this. The
> post office isn't going to give them delivery records,

Are you sure about this assumption? I'm not.

> and it's going
> to be a challenge if they try to send subpoenas demanding records from
> random out of state businesses.

States are, somehow, getting this data for cigarette tax.

/BAH

[John Levine]

In article <ogigm1$t5$1...@snarked.org>,
D. Stussy <newsgroup...@kd6lvw.ampr.org> wrote:
>What it comes down to is jurisdiction. I do not see how a state or country can assert jurisdiction outside of its borders
>(excluding air/water/space-craft carrying its flag).

There's at least two centuries of case law exploring the exceptions to
that principle. You might want to review it. There are also lots of
interstate agreements on various topics which suggests that things are
not as cut and dried as you imagine.

>In this situation, the state is free to impose a use tax upon the buyer inside its jurisdiction. However, there simply is no
>authority to impose sales tax to be collected at a source outside its borders, and furthermore as this is a U.S. state, the U.S.
>Constitution preempts any such attempt as a violation of the [federal] power to regulate interstate commerce.

Reread the Quill decision, which had a much more nuanced analysis.

> It tries to argue that Internet communication for a mail order
>house is somehow fundamentally different (for tax nexus purposes) than a telephone-based order, but it is NOT.

Well, that's one position. We'll surely see how it plays out in court.

R's,
John

[Arthur Rubin]

On Tuesday, May 30, 2017 at 10:39:23 AM UTC-7, John Levine wrote:
> In article <ogigm1$t5$1...@snarked.org>,
> D. Stussy <newsgroup...@kd6lvw.ampr.org> wrote:

> > It tries to argue that Internet communication for a mail order
> >house is somehow fundamentally different (for tax nexus purposes) than a telephone-based order, but it is NOT.
>
> Well, that's one position. We'll surely see how it plays out in court.

Laws can change, but, at the moment, Internet sales are _more_ protected from state regulations than telephone sales.