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Why am I being charged sales tax?Updated 2 months ago

As you know, when you buy wine at a 'brick and mortar' retailer typically, you will pay some combination of sales tax (which can vary county by county) and excise tax. When retailers first began selling products online, many took the position "Well, I am located in State A; if I sell into State B, then I won't charge sales tax, because I'm not located in State B", etc. This was great for consumers in State B, who now didn't have to pay sales tax, and for internet retailers, who got lots more business from consumers who now understood they could avoid paying taxes by ordering online. 

Traditional retailers were not so happy and went to the courts for a solution. Things initially went against them when the Supreme Court, in the 1992 Quill v North Dakota case, ruled that states could NOT collect taxes from internet retailers located in other states. A big part of the Court's rationale was that, in 1992, the internet was a new, promising - and still very small - technology and the government wanted to encourage its growth. While that view has changed in recent years, for a long time we all got used to buying things online without paying sales taxes. 

However, traditional retailers never dropped their objections to what they saw as an unfair competitive advantage. Also, as internet sales ballooned after 1992, putting many local retailers out of business, states began to realize they were losing huge amounts in uncollected sales taxes. This again led to court challenges, ending just a few months ago - in June 2018 - when the Supreme Court decided the South Dakota v Wayfair case, which overturned the 1992 Quill holding. Under the new Wayfair ruling, internet retailers ARE now required to charge sales taxes, and, if applicable, excise and use taxes in every state in which they sell. This is enormously confusing, as some states have no sales taxes, but may impose excise taxes on alcohol, while most states do have sales taxes, but because counties and municipalities are allowed to add their own riders onto the basic sales tax, the actual tax varies county by county within that state. Other states impose special taxes on alcohol. It's really a very confusing situation, and the states and the federal government are trying to work toward a unified, sensible national method of collecting these taxes. Just don't expect a solution soon, because there are other, non-tax interests - specifically, those who oppose the interstate sale of alcohol and direct to consumer (DTC) wine sales - who are hoping that the cost and complexity of dealing with the fractured sales/excise/use tax system will discourage such cross-border sales.

In any event, since Wayfair, SommSelect has been complying with the new law. There are some other internet retailers who either don't know about the law or who will ignore it until they get caught - either might apply to the other retailers you mentioned. For anyone who intends to stay in business for the long haul, this is not a good idea - the tax liabilities, along with penalties, will just pile up over time. Sooner or later, they will have to deal with the accrued tax bill, which could, conceivably, be large enough to put many firms out of business.

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