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Let’s be honest, the advent of online e-commerce for mega-retailers like Amazon, Apple, EBay, and even Walmart has flourished beyond belief over the last two decades; while mom and pop shops and many brick and mortar stores have crumbled under the weight of enticing Internet deals, no real Internet sales tax system, and a lot of times free shipping. Well, as if to finally call the Internet a rogue player, the U.S. Supreme Court in a huge 5-to-4 ruling, basically gave those businesses that are most likely long since gone a reprieve by calling for the collection of sales tax – same as any other retailer would have to do.1

Essentially, what this ruling does is, it states: “Okay, guys, the jig is up. Your days of not paying point-of-purchase state taxes is over.”

Details, Allegations, and Claims in the Wayfair vs. South Dakota Sales Tax Case

Forthcoming Internet Sales Tax Benefits Consumers & Retailers | Denver Sales & Purchase Tax Counseling Attorney

Forthcoming Internet Sales Tax Benefits Consumers & Retailers | Denver Sales & Purchase Tax Counseling Attorney

The following details, allegations, and claims in the Wayfair vs. South Dakota sales tax case came from recent news reports:²

  • The decision comes from the highest court in the U.S. after South Dakota filed suit against the giant online retailers Wayfair, Overstocked and Newegg concerning the fact that they weren’t collecting state sales tax.
  • The case was titled: Wayfair vs. South Dakota.
  • The jig is up philosophy is definitely heard in the majority opinion written by Justice Anthony Kennedy. He stated: The Supreme Court believes online retailers should no longer deserve “an arbitrary advantage over their competitors, who collect state sales taxes” by merely saying they don’t have a presence in that state.
  • The Internet’s dynamic power and near omnipresence, Justice Kennedy explained, have led to major Internet retailers not collecting sales taxes that in turn have cost states upwards of $33 billion in missed sales tax revenue annually.
  • Some of the evidence the court presented, included:
    • The fact that only 2% of Americans had Internet access in 1992, as compared with 89% currently.
    • E-commerce sales when they began only amounted to .8% of all U.S. retail sales. Today that figure is 9%, which is expected to grow exponentially.
  • More traditional retailers view the move as leveling the playing field. Now all retailers can compete on fair and level sales tax rules.
  • The ruling overturned two previous Supreme Court rulings that held that states could not require retailers to collect and pay sales taxes if those retailers were not physically located in the point-of-purchase state.

The over-riding positive impact this new sales tax surplus will supply is more money in each state’s coffers, so they’ll have more budget surplus on hand without having to raise taxes, hopefully.

Contact a Denver Sales & Purchase Tax Counseling Attorney at Downey & Associates, PC

Does your company need consultation about developing an Internet sales tax collection system? If so, contact the Denver Sales & Purchase Tax Counseling Attorney at Downey & Associates, PC. To schedule an appointment, call us today at 303-813-1111 or send us an e-mail.

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1“The Supreme Court Decision That Will Put More Taxes on Internet Sales is Good News for You” published in Business Insider, June 2018.

2“What the Supreme Court’s Internet Sales Tax Ruling Says about the State of Retail” published in Forbes, June 2018.

 

A little-known tax provision in the state constitution, known as the Gallagher Amendment, is responsible for giving homeowners a much-needed tax break as home values skyrocket. Every odd numbered year, Colorado counties assess property values across the state to come up with a new “market value,” otherwise known as the “actual value” that also remains in effect in the even numbered year as well. These market values for properties are published on May 1st. Residential property owners can appeal these new assessments, but the deadline to do so is June 1st. So, you may have to wait several more months to appeal the assessed property value, if you didn’t act on it this year.

The Gallagher Amendment Explained

How the Gallagher Amendment Affects Denver Property Taxes | Denver Property Tax Appeal Attorney

How the Gallagher Amendment Affects Denver Property Taxes | Denver Property Tax Appeal Attorney

It’s important to explain the Gallagher Amendment to the Colorado Constitution, which was enacted in 1982, because it impacts the determination of the actual value of property and the valuation for assessment of any property. In Colorado, the commercial property assessment ratio is fixed at 29 percent. In 1982, voters also determined that commercial property owners should pay 55 percent of all property tax revenues collected, while the remaining 45 percent should be paid by residential property owners. The assessment ratio for residential property had been 7.96 percent, but in order to deal with fluctuating real estate prices, the state performs its study to determine if the residential assessment ratio should be altered to offset any increase or decrease in property values. This year the residential assessment ratio is being lowered to 7.2 percent to account for the rise in residential values relative to commercial property values. The explosive housing market growth along the Front Range is said to be responsible for pushing home values so high.

How the Gallagher Amendment Has Impacted Property Taxes in Colorado

  • It has helped make the county assessor’s methodology for determining the actual value of a property easier. Before the amendment was added to the state constitution, the assessor had to factor in several variables, whereas now they just use three: cost, market, and income.
  • It made it so the actual value of the residential property would be factored by the cost and market approaches to appraisal only.
  • It declared certain property exempt from taxation, including household furnishings, personal effects not used in procuring income, business inventory, livestock, and agricultural equipment.

Contact a Denver Property Tax Appeal Attorney at Downey & Associates, PC

If you would like to appeal your personal property tax assessment, contact our Denver Property Tax Appeal Attorney at Downey & Associates PC. From our law offices in Englewood, we serve clients throughout Colorado, including the Greater Denver area, Colorado Springs and Fort Collins, and the mountain and rural counties as well. We can help you in all stages of a personal property tax protest and appeal process. Call us today at 303-813-1111 or send us an e-mail by clicking on the “Contact Us” tab on this page.

Forthcoming Internet Sales Tax Benefits Consumers & Retailers

June 25, 2018

Let’s be honest, the advent of online e-commerce for mega-retailers like Amazon, Apple, EBay, and ... Read more

How the Gallagher Amendment Affects Denver Property Taxes

October 12, 2017

A little-known tax provision in the state constitution, known as the Gallagher Amendment, is responsible ... Read more