Hi, this is Wayne again with a topic “How Amazon AVOIDED Tax (For YOU!)”.
If you’re an American, you might have noticed lately that shopping online has gotten a little bit more expensive, and this is not to help Jeff Bezos pay his alimony losing anyway. If you were to look closely at the bill for that 18 pack of toilet paper, you just bought, you might notice that you’re now being charged sales tax, something that’s becoming more and more common around the United States on purchases made online. But then again I mean it’s 2019 like. Why is this happening now and if you guys are watching from a different part of the world, you’re probably really confused because, like what Americans could shop online without paying tax, no fair and yeah to quite a significant extent, they could you see in the US sales Taxes are collected by the individual states themselves, not by the federal government. So that means that if you’re an online retailer, you get subjected to this large hodgepodge of laws about whether or not you have to charge your customers tax, depending on what state they’re from and unlike places such as Europe, where all online purchases have had value-added tax Or VAT slapped on them for a long time.
The law in the US was that individual states couldn’t require businesses to collect sales tax unless they had a physical presence inside the state. You know something like a retail store. This rule actually came out of a federal court case from 1992 that didn’t even involve the internet. Rather, the controversy was over a company using a mail-order catalogue to ship floppy discs to North Dakota.
Anyway, the idea was that if a state could force far away retailers to collect sales tax, it would be too much of a hindrance to interstate commerce, possibly making it hard for folks to order cheap, perfume off of daytime shopping networks. So this was the law that Americans lived under for a long time and for online shoppers it was pretty freaking sweet since, if their favorite online store didn’t have enough of a physical presence inside their state, they could shop tax-free. Now state governments were to this and a number of them asked their citizens to voluntarily report otherwise tax-free online purchases and pay a use tax, but haha you can guess how much luck they had with that now. Of course, many of you, Americans have been paying tax on online shopping for a while now, regardless as more and more digital retailers have expanded their physical operations into more States, but last year a new Supreme Court case, ironically involving the other Dakota.
This time changed the legal situation completely. The current Supreme Court ruled that, because so much of the nation’s Commerce is now online, the old physical presence rule just doesn’t make sense anymore, and so the court allowed states to charge tax with far fewer restrictions on sales and as state governments rarely turn down opportunities For easy money, most of them are now forcing online retailers to collect and then fork over this sales tax. The states can do this as long as the company is selling a certain dollar amount worth of merchandise or selling to a certain number of customers within their state, so that they’re not running afoul of that pesky old Constitution.
But let’s say that you really don’t want to get charged an extra 70 bucks for that thousand dollar TV you’re planning to buy. Is there any way around the new laws? Actually, yes, there is move to one of the five states that just don’t have a sales tax, like Montana, just make sure you watch out for the Bears they have bears in Montana. You know what else you got to watch out for your brain, so check out. Brilliant, a problem solving website that teaches you to think like a computer scientist instead of passively listening to lectures brilliant lets, you master concepts by solving fun and challenging problems, and they provide the tools and the framework that you need in order to tackle these challenges. Brilliance! Thought-Provoking content is based around the idea of taking large complexities and breaking them up into bite-sized, understandable chunks to help lead you from curiosity to mastery and you’ll be in the company of over five and a half million other members who share your curiosity and love for Math and science, so what are you waiting for? You can support tech, wiki and learn more about brilliant by clicking the link in the video description or going to brilliant org, slash tech, wiki and signing up for free.
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