The New State Sales Tax Laws Imposed on the Internet and the Consequences for my Customers
On June 22, 2018 the US supreme court made the decision that US states can legally prosecute taxes from companies not physically located within their jurisdictions. States have been arguing that they are losing money because their subjects who reside in the state can buy taxable products outside of the state and have them shipped in, thereby avoiding paying tax to their state.
picture of vulture on right holding a scale with wreath on left
You as a citizen of the state, always had the legal responsibility to send uncollected taxes to the state on any purchases made outside of your state. Many of you probably weren't even aware that you are a law breaker who can be picked up and jailed for this very reason. Because the state doesn’t have enough money to sue millions of people for tax evasion and would be forced to pay more than they could hope to collect, this ruling which has been years in the making, was their only recourse.
Businesses have always been at the forefront of tax matters because they are centralized. The fact that you as a subject of the state, are so many, makes it difficult for the state to single you out (unless you are wealthy, or the unfortunate scapegoat of an IRS employee who wants to show that they are doing their job). In the field of cryptocurrency, this is known as decentralization. It’s the very same reason why bitcoin has not been successfully shut down (though they’ve tried very hard). The vastness of the internet transcends state jurisdictional boundaries to a large extent.
However, as a business owner, my centralized business model is now threatened by state powers outside of my jurisdiction. Some of you may have noticed that I’ve not been blogging for the past few months. The reason is that I’m now in IvanOnTech’s Blockchain Coding Academy. As I also take care of an elderly parent, my time is very limited now. It is also simply impossible for me to hire enough lawyers to research the laws in all 51 states, especially on my poverty stricken income, I am forced to reject all orders of my software from USA jurisdictions where I don’t have the technical apparatus to collect. This includes all states except New York State, which I’ve been submitting taxes to all along.
As a customer from the USA, your only option to buy now, is to continue to break the law as you already have been (who hasn’t bought something outside of their taxing jurisdiction), by using bitcoin or some other cryptocurrency, and make damned well certain that I don’t know where you reside (because if I know this, you will have forced me into legal liability because a bitcoin transaction cannot be rejected, only sent back). I simply cannot take on the legal liability of the other 50 states as a one person company. I don’t have the manpower or financial reserves to do this.
The sales tax software that is currently available does allow me to differentiate between counties in New York state, but I’ve been doing this manually because it’s an extra $50/month (that’s what it was in 2005, but it’s probably much more expensive now) and most months I don’t have sales in NY. The existing software is also not currently up to date on reacting to the 9000 county jurisdictions as they are now changing their legislation to take advantage of the supreme court ruling.
Some states also already have minimums in place, but again, I can’t go through all 50 to figure this out. A mistake made here would ruin me, so I am forced to reject US transactions not made in New York state. For those of you inconvenienced by this ruling, please accept my apologies. In the mean time you might consider writing to your state representatives about this. I suspect that many of them had no clue what a mess they create. Parasites typically don’t have to care that their rulings reflect reality or are even possible to adhere to.
Users from foreign countries are unaffected by this legislation and you can continue to order as usual using your national fiat. But I strongly suggest you start using bitcoin or some other cryptocurrency for moral and ethical reasons. State actors are responsible for the greatest atrocities in all of human history. Use of national fiat is what has enabled the atrocities of the Iraq war, Afghanistan, Auschwitz and so on. Nationless cryptocurrency is the money of the future.
Edit: The following states have no state sales tax and are exempt from this rule:
Alaska
Delaware
New Hampshire
Oregon
Montana
For the remaining states, there are two other options... come to New York State and take possession of my software from NY, and pay NY sales tax. Also some of you may have addresses outside of the USA as well as inside. If you order, to avoid it being rejected, make sure to use a non US address or one of the states listed above.
I may in the future be able to add new jurisdictions if the conditions are made clear in said states, but the vast majority of states involves reading tomes of legal fine print and hoping you've dotted every "i" and crossed every "t", so this is likely to be a very long process and could take years to sort out.
3FwxQsa7gmQ7c1GXJyvDTqmT6CM3mMEgcv
Wow. So that means if I was to be in affiliate sales of any kind, I would still have to calculate the sales tax from every single state other than where I was incorporated/registered in -- and send in potentially 49 other state tax returns every single time I do my taxes?
What does this mean for freelance writers?
Travel bloggers?
This basically means that if you can't calculate sales tax for the other 49 states on a yearly basis (or God forbid -- quarterly if you're self employed and do quarterly taxes) AND file the forms properly at that time -- you're the on the one the hook.
Basically, this means if you're self employed in the states, you really can only accept customers within your state.
UNFREAKING BELIEVABLE.
Its always regulations and tax laws that make life incredibly hard for small businesses. Big ones have the lawyers and figure it out, but the small ones are eventually forced out of business.
On the other hand people wonder why working conditions have become so bad and profits flow almost completely to the top. If people can no longer work self-employed in a small family business, then they have to accept employed work no matter what.
Essentially the government is making it illegal to earn money without being employed.
Thanks for breaking down what ‘taxed the internet’ means. And that goes for all software type internet businesses, correct? Doesn’t sound good.
Hey thanks for wOrding your first link! I would’ve missed it otherwise and that’s a dope image!
Nice post @zoidsoft, good luck with @ivanontech - piece o cake!
As far as I know, it goes for all businesses period, not just software businesses. For instance, one could send snail mail to my address and ask for delivery in Texas having never gone to my website. I'd still be liable to send the tax to a taxing jurisdiction in Texas. In the past, it was always the customers responsibility to submit that tax to their own state jurisdiction, but they never do that and were lawbreakers without realizing it. The states then decided they'd make more money if they started threatening businesses with that responsibility. The net effect of this is likely to put many small businesses out of business (unless a software solution can be found that is reasonable).
There are usually exemptions one can apply for, but the problem here is the sheer barrage of legalese. There's no hope for any one person to sort it all out and not become liable. Therefore I choose to bow out and let the political consequences fall back onto the idiot politicians who asked for this.
Stupid, unfortunate, and irritating. Best of luck in the meantime. I hope to visit and buy a copy in person.