scholarly journals The Disproportionate Sales Tax Compliance Burden on Small- and Medium-Sized Online Businesses After Wayfair

2021 ◽  
Vol 22 (1) ◽  
pp. 181-230
Author(s):  
Karen Kim
Keyword(s):  
South Dakota ◽  
Tax Compliance ◽  
The State ◽  
Sales Tax ◽  
Safe Harbor ◽  
Compliance Costs ◽  
High Compliance ◽  
Sales Taxes ◽  
Fairness And Efficiency ◽  
Physical Presence

Many states’ sales and use tax provisions, updated in response to the Supreme Court’s decision in South Dakota v. Wayfair, Inc., will likely impose a disproportionate tax compliance burden on small- and medium-sized businesses (SMBs) that engage in e-commerce. Relative to large companies like Amazon and eBay, SMBs cannot absorb the high compliance costs associated with tracking, collecting, and remitting taxes. Wayfair expanded states’ authority to collect sales taxes on companies without a physical presence in the state. But states should wield this power judiciously. While mimicking South Dakota’s statute (upheld as constitutional in Wayfair) may help states avoid litigation, they would better promote the goals of fairness and efficiency by exempting a larger category of small vendors from sales tax obligations. In light of the COVID‑19 pandemic, which has acutely hurt SMBs, reducing sales tax-related compliance burden would also help states provide relief to struggling SMBs. States should (1) clarify which entities are subject to the remote seller and marketplace facilitator statutes and (2) raise the de minimis safe harbor thresholds that shield smaller businesses from having to remit taxes.

What is New York’s Amazon Tax on Internet Commerce?

2012 ◽  
pp. 306-318
Author(s):  
James G.S. Yang
Keyword(s):  
New York ◽  
Web Site ◽  
New York State ◽  
The State ◽  
Sales Tax ◽  
Tax Law ◽  
Online Retailer ◽  
Internet Commerce ◽  
York State ◽  
Physical Presence

This paper examines internet commerce taxation. It concerns who is responsible for collecting sales tax - the seller or the buyer, which depends on nexus between the seller and the state. If there is a nexus, it is the seller’s responsibility; otherwise, it is the buyer’s duty. Nexus further depends on physical presence. However, in today’s e-business, the concept of physical presence has changed. Effective June 1, 2008, New York State enacted the so called “Amazon Tax Law” that an out-of-state online retailer is presumed to have nexus with New York State if it enters into a contract with an affiliate in the state to engage in soliciting businesses in the state by means of web site linkage for an annual gross receipts of more than $10,000. As such, the online retailer is required to collect sales tax from the in-state buyer. The concept of physical presence has been extended from employee or office to web site connection. This paper examines its impact.

What is New York’s Amazon Tax on Internet Commerce?

2011 ◽  
Vol 7 (4) ◽  
pp. 50-61
Author(s):  
James G.S. Yang
Keyword(s):  
New York ◽  
Web Site ◽  
New York State ◽  
The State ◽  
Sales Tax ◽  
Tax Law ◽  
Online Retailer ◽  
Internet Commerce ◽  
York State ◽  
Physical Presence

This paper examines internet commerce taxation. It concerns who is responsible for collecting sales tax - the seller or the buyer, which depends on nexus between the seller and the state. If there is a nexus, it is the seller’s responsibility; otherwise, it is the buyer’s duty. Nexus further depends on physical presence. However, in today’s e-business, the concept of physical presence has changed. Effective June 1, 2008, New York State enacted the so called “Amazon Tax Law” that an out-of-state online retailer is presumed to have nexus with New York State if it enters into a contract with an affiliate in the state to engage in soliciting businesses in the state by means of web site linkage for an annual gross receipts of more than $10,000. As such, the online retailer is required to collect sales tax from the in-state buyer. The concept of physical presence has been extended from employee or office to web site connection. This paper examines its impact.

The Principle of Nexus in E-Commerce Tax

2012 ◽  
Vol 8 (2) ◽  
pp. 33-48 ◽  
Author(s):  
James G.S. Yang
Keyword(s):  
The State ◽  
Sales Tax ◽  
The Internet ◽  
State Governments ◽  
Internet Commerce ◽  
Independent Contractor ◽  
Physical Presence ◽  
Financial Consequences

The volume of Internet commerce has become increasingly important in today’s economy. However, it has a sales tax problem, concerning whether the seller or the buyer should be responsible for collecting sales tax. This problem becomes more complicated when the Internet commerce crosses state borders; this situation has caused many lawsuits. Courts have ruled that an out-of-state seller is held responsible only when there is a “nexus” between the seller and the state. A place of business or employee is evidence of “physical presence” and thus constitutes “nexus.” An independent contractor is treated as employee. Website connection between two computers serving as an “affiliate” in soliciting business for a fee is deemed to have “nexus.” In recent years, many state governments enacted tax statutes that require an out-of-state seller to provide information about an in-state buyer’s name and address and product purchased. Unfortunately, it was ruled unconstitutional by the court. The seller can refuse the request without financial consequences.

scholarly journals What Is Important When Shopping Online?

2011 ◽  
Vol 15 (1) ◽  
Author(s):  
Kaye McKinzie ◽  
Ken Griffin ◽  
Pat Cantrell ◽  
Vicky Chen
Keyword(s):  
Online Shopping ◽  
Sales Tax ◽  
Online Transactions ◽  
Sales Taxes ◽  
Online Retailers ◽  
Physical Presence ◽  
Internet Sales ◽  
Potential Impact ◽  
State And Local

Shoppers have many avenues on where to purchase products, one of which is online. Many online retailers do not apply state and local sales taxes on products they sell, thus allowing them to sell their products cheaper than can be found at local retailers. If the physical presence nexus rule is altered and Internet sales tax is applied for all online transactions, it could potentially change online shopping. The results of a survey of 154 persons are presented, discussing the potential impact of the changing of the physical presence nexus rule and requiring Internet sales tax.

Pengampunan Pajak Berulang dan Kepastian Hukum dalam Kepatuhan Pajak di Indonesia: Sebuah Quasi Eksperimen

2019 ◽  
Vol 8 (2) ◽  
pp. 126
Author(s):  
Ade Lisa Matasik ◽  
Theresia Woro Damayanti
Keyword(s):  
Factorial Design ◽  
Tax Compliance ◽  
Experiment Design ◽  
Bachelor's Degree ◽  
Legal Certainty ◽  
High Compliance ◽  
Tax Amnesty ◽  
Interaction Testing ◽  
High Level ◽  
Quasi Experiment

<p class="JurnalASSETSABSTRAK">ABSTRAK</p><p>Pengampunan pajak telah dilakukan berulang kali di Indonesia yaitu 1964, 1989, 2008 dan 2016. Penelitian ini menguji apakah ada perbedaan kepatuhan pajak antara yang mengetahui pengampunan pajak berulang serta merasakan kepastian penegakan hukum dan yang tidak. Penelitian ini menggunakan  quasi eksperimen faktorial 2 x 2 antarsubyek dengan mahasiswa akuntansi di FEB yang sedang mengambil matakuliah manajemen pajak sebagai partisipan. Hasil dari penelitian ini adalah terdapat pengaruh antara pengetahuan tentang pengampunan pajak berulang maupun kepastian penegakan hukum terhadap kepatuhan pajak. Hasil dari pengujian interaksi yang diperoleh adalah ketika wajib pajak tidak mengetahui adanya pengampunan pajak yang berulang dan merasakan kepastian penegakan hukum yang tinggi akan menghasilkan kepatuhan yang paling tinggi. Sebaliknya ketika wajib pajak mengetahui adanya pengampunan pajak yang berulang dan tidak merasakan kepastian penegakan hukum yang tinggi akan menghasilkan kepatuhan yang rendah.<em></em></p><p class="JurnalASSETSABSTRAK"><em>ABSTRACT</em></p><p><em>Tax amnesty has been repeadly implemented in Indonesia namely 1964,1989, 2008 and 2016.The purpose of the study is to examine is there any tax compliance differences between those who perceive recurring tax amnesty and feel legal certainty and to those who do not. This quasi experiment design was consisted of 2x2 between subject factorial design, with Bachelor’s Degree of Accountancy at FEB UKSW who took Taxation Management as participants. The result shown that there is influence between recurring tax amnesty knowledge and legal certainty in the tax compliance. The result of the interaction testing shown that when taxpayer are not aware of any recurring tax amnesty and feel the high legal certainty will result high compliance. Conversely, when taxpayers know that there is recurring tax amnesty and do not sense a high level certainty, it would result a low tax compliance.<br /></em></p>

Pengaruh Persepsi Wajib Pajak Orang Pribadi Atas Sanksi Perpajakan Dan Kualitas Pelayanan Pajak Terhadap Kepatuhan Perpajakan

2012 ◽  
Vol 4 (2) ◽  
pp. 72-90
Author(s):  
Nancy Marchelly ◽  
Waluyo Waluyo
Keyword(s):  
Service Quality ◽  
Sampling Method ◽  
Tax Compliance ◽  
The State ◽  
Primary Data ◽  
Tax Revenue ◽  
Dominant Source ◽  
State Expenditure ◽  
Convenience Sampling

Tax Revenue is one of the most important sources of revenue for making the state expenditure budget (APBN). As a revenue dominant source for APBN derived from tax sector. The main objective of this study is to analyze the effect of tax sanctions and tax service quality on individual tax compliance.   This study focus on individual entrepreneurs tax payer those registered at the Primary Tax Office Tigaraksa (KPP Pratama Tigaraksa) especially in Gading Serpong Tangerang. Samples were selected by convenience sampling method, the data used in this study is primary data.  The results show indicate (1) tax sanction has significantly affect to individual tax compliance, (2) tax service quality has significantly affect to individual tax compliance, (3) tax sanction and tax service quality have significantly affect to  individual tax compliance. Keywords: Tax penalty, tax service quality, individual tax compliance

Moderating role of patriotism on sales tax compliance among Jordanian SMEs

2020 ◽  
Vol 13 (3) ◽  
pp. 389-415 ◽  
Author(s):  
Ahmad Farhan Alshira'h ◽  
Hijattulah Abdul-Jabbar
Keyword(s):  
Tax Compliance ◽  
Arab Countries ◽  
Moderating Effect ◽  
Theory And Practice ◽  
Sales Tax ◽  
Deterrence Theory ◽  
Content Type ◽  
Tax Rate ◽  
Tax Audit ◽  
The Impact

Purpose The purpose of this paper is to investigate the impact of tax audit, tax rate and tax penalty on sales tax compliance and examine the moderating effect of patriotism on the associations between tax audit, tax rate and tax penalty with sales tax compliance among Jordanian manufacturing small- and medium-sized enterprises (SMEs). Design/methodology/approach In this study, 660 questionnaires were distributed by using systematic random sampling to manufacturing SMEs in Jordan, after which a total of 385 useable questionnaires were deemed suitable for analysis. Partial least squares structural equation modelling (PLS-SEM) was used to validate the measurement model and structural model and the predictive relevance of the study’s model. Findings The findings showed that tax audit and tax penalty were positively associated with the level of sales tax compliance, whereas tax rate was insignificantly associated with sales tax compliance. They also demonstrated the moderating significant effect of patriotism on the relationship between tax penalty, tax audit and tax rate with sales tax compliance. Research limitations/implications Tax authorities and policymakers in developing majority societies in developing countries and in other Arab countries, especially in Jordan may use the results to focus their interest on the formulation of policies founded on the outcomes of the study to strengthen eligible SMEs to comply to further boost their sales collections. Originality/value This study extends the deterrence theory in the context of sales tax compliance by proposing the moderating effect of patriotism in the deterrence theory on sales tax compliance among SMEs. Moreover, the suitability for the use of PLS-SEM as a statistical tool in investigating the extended deterrence theory with patriotism as a moderating variable as well as its implications for theory and practice was also discussed.

Shopping for Lower Sales Tax Rates

2021 ◽  
Vol 13 (3) ◽  
pp. 209-250
Author(s):  
Scott R. Baker ◽  
Stephanie Johnson ◽  
Lorenz Kueng
Keyword(s):  
Shopping Behavior ◽  
Sales Tax ◽  
Fixed Costs ◽  
Tax Rates ◽  
Inventory Problem ◽  
Sales Taxes ◽  
Long Run ◽  
Wide Range ◽  
Short Run ◽  
State And Local

Using comprehensive high-frequency state and local sales tax data, we show that shopping behavior responds strongly to changes in sales tax rates. Even though sales taxes are not observed in posted prices and have a wide range of rates and exemptions, consumers adjust in many dimensions. They stock up on storable goods before taxes rise and increase online and cross-border shopping in both the short and long run. The difference between short- and long-run spending responses has important implications for the efficacy of using sales taxes for countercyclical policy and for the design of an optimal tax framework. Interestingly, households adjust spending similarly for both taxable and tax-exempt goods. We embed an inventory problem into a continuous-time consumption-savings model and demonstrate that this behavior is optimal in the presence of shopping trip fixed costs. The model successfully matches estimated short-run and long-run tax elasticities. We provide additional evidence in favor of this new shopping complementarity mechanism. (JEL E21, E32, G51, H21, H25, H71)

Current Developing Trend of Sales Tax on E-Business

2015 ◽  
Vol 11 (2) ◽  
pp. 60-73
Author(s):  
James G. S. Yang ◽  
Peter L. Lohrey ◽  
Leonard J. Lauricella
Keyword(s):  
State Government ◽  
The United States ◽  
United States Senate ◽  
Sales Tax ◽  
Internet Commerce ◽  
Business Operations ◽  
State Statutes ◽  
State Income Tax ◽  
Physical Presence ◽  
State Income

This article explores the development of sales tax on e-business. It points out that the problem was rooted in the fact that the seller is required to collect and remit the tax to the buyer's state government. If the seller and the buyer do not reside in the same state, the buyer's state government has no jurisdiction over the seller, unless there is a “physical presence” of the seller in the buyer's state. A state government can require an out-of-state seller to collect sales tax from the in-state buyer only when there is “physical presence.” However, what constitutes “physical presence” can become very controversial and complex. This article discusses many court cases. As Internet commerce was incorporated into the business operations, a great many transactions were executed online. The concept of “physical presence” became even more complex, as websites and digitized products became more commonplace. A new concept of “economic nexus” has evolved under many state statutes. Now an out-of-state seller may be required to collect sales tax from an in-state buyer, regardless of “physical presence.” In 2013 the United States Senate enacted the “Marketplace Fairness Act of 2013.” This embraced the concept of “economic nexus.” This legislation could potentially end or at least greatly simplify all controversies in e-business taxation. This paper further notes that the concept of “economic nexus” may be extended to the arena of state income tax.

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