Paul L. Caron
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Friday, July 21, 2017

Thimmesch:  Online Shopping And Tax Privacy

Adam Thimmesch (Surly Subgroup): Online Shopping and Tax Privacy

The privacy implications of online commerce are complicated and fascinating. On the one hand, it allows individuals to protect their privacy by shopping for sensitive items without the knowing glances of store clerks, fellow patrons, or those passing by. On the other hand, it creates a digital trail that can connect them to a particular vendor or purchase in perpetuity. This can occur with respect to items that are politically, medically, or sexually sensitive and with respect to items that they’d just prefer to keep a secret. (For example, if you forget to browse in private mode, you might find that your wife’s Facebook feed now includes ads for the items that you were searching out for her birthday. Woops. Sorry dear.)

Your online shopping habits might also soon be known to your state revenue authority. Given states’ limited jurisdiction to require online vendors to collect sales taxes from consumers, some states have taken a new approach—requiring those vendors to, instead, rat out their customers to the state. Colorado began this movement in 2010, and it is spreading across the country. That has been aided in large part by a recent 10th Circuit opinion upholding those requirements under the Dormant Commerce Clause and the Multistate Tax Commission’s work on a model notice and reporting statute. Most recently, the Governor of Washington signed a bill containing those requirements into law this month.

Here’s how this approach generally works....

https://taxprof.typepad.com/taxprof_blog/2017/07/thimmesch-online-shopping-and-tax-privacy.html

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