September 3, 2009 at 12:02 pm
Grant Fritchey (9/3/2009)No, no. They went across state lines to get a list of customers from a tire company in order to identify the customers that came from MASS so that they could go and collect from them... They lost the case on appeal. I'm not just talking about the law that requires you to come home from vacation and pay taxes on anything you purchased while you were away. These guys were trying to get serious, but were handed their heads in court. Good thing too.
Yikes! I hadn't heard about that one.
Florida tries to impose state sales tax on internet & other purchases made from other states. You're supposed to report on it at tax time (April).
How many people are willingly going to report purchases like this so they can pay the state IRS extra money? Seriously.
September 3, 2009 at 12:32 pm
Brandie Tarvin (9/3/2009)
MA has the right to say who can do business in their state. By extension, that means they can require those companies to require any sub-contracted vendors to follow these regulations. For example, a hospital in MA stores their data out of state at a server farm. The server farm vendor is required to abide by MA laws because the hospital is required to abide by MA laws AND verify that their vendor is abiding by those laws.This doesn't actually violate Interstate Commerce Laws, much as you might think otherwise. Especially since it won't be long before the Fed jumps on the bandwagon and starts doing the same thing. I'm pretty sure bills have been introduced before, but I'm unsure of whether or not they've gotten out of committee.
Thing is, the Fed only tries to regulate when the States make a hash out of it (i.e., everyone's doing something completely different), the constituants make a federal case (literally) out of an issue, the lawmakers were seriously burned (see current financial crisis), or nobody else is doing anything. So we might not actually see action from the Fed on this for a decade or more. Especially if the state governments go this way en masse. Why should the Fed have to worry about it?
I also don't see this type of thing being thrown out by the U.S. Supreme Court. Not unless something seriously funky is hidden inside the legislation.
If my business was in MA or if my data center was in MA, then I agree, I would be bound by MA law, but neither are true, I am 1000 miles away, and while I probably am already doing everything that they require, I'm not doing it because they said so. Also I'm not doing business in MA, I'm doing business 1000 miles away. So what you are listing above isn't what I'm talking about with the hospital and all. That wouldn't have anything to do with interstate commerce, I as a company actually in MA would be bound to follow their laws, I agree.
Here is a scenario: Company in Illinois, datacenter in Minnesota, no physical presence in MA, a customer in MA buys a service from me, I provide that service to them, from IL/MN. Under what THEORY could MA say I am subject to their law?
I do see the SC throwing out a case like this on the same grounds they dinged states for trying to force online retailers to collect sales tax for them. No nexus, no presence..
September 3, 2009 at 12:39 pm
Matt Miller (9/3/2009)
Grant Fritchey (9/3/2009)
Elliott W (9/3/2009)
As an aside, while I think its a good idea I'm a little fuzzy on the legality. Mass. is interfering in interstate commerce and unless you have a building in Mass. you generally are not subject to their laws, regardless of what Mass. says. Only the federal government has the right to do this. Thoughts?CEWII
Well, Mass recently tried to tax purchases made outside their state lines... so, I wouldn't be surprised if they're trying to manage other people's business too.
Don't confuse enforceable vs on the books. There are lots of states requiring usage taxes (a.k.a sales tax on out of state vendors) be paid. Some pound on the vendors to pay it, some require the customers to report these on their tax returns. Pennsylvania and New Jersey are ones I know of doing that.
Most states haven't been able to enforce those rules yet. Of course - they're finally getting automated enough that you may see it start to happen.
*cough* pay cash *cough*
The state can surely goto people in their state and say you have to pay sales tax on that HDTV you bought online, what they can't do is force the retailer to do it for them regardless of what their law says. But again, that is against people IN their state, no interstate commerce in question because they are not enforcing it on people from outside their state.
I am unsure about the legality of going to the retailer and saying give us a list of customers from our state, I would say no, show me a court order. If they had a court order I would decide whether to fight it or turn over the records.
What I do know is their demand with me in another state without a court order is nothing but words on paper without legal force in my state. To ignore with impunity.
September 3, 2009 at 2:38 pm
Let's throw another take on it.
I run my business out of Mass, but use the software and services you provide - which have no physical presence in Mass. In order for me to abide the law, I would need to find an ASP that will abide the laws in Mass. If the ASP wants my business, then the ASP needs to be able to do what is required by the law. This is true whether we are talking interstate commerce or global commerce. We have several clients from abroad for each of whom we must be able to meet the requirements put on by the government no matter how inane and stupid they may be (and some are extremely stupid - ie in Israel we are required that all Israel orders be sequential to each other - despite there being orders from other countries in the same database. In this one the client would not permit a report that simply displayed them sequential, the orders had to be stored sequential.)
Jason...AKA CirqueDeSQLeil
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September 3, 2009 at 2:55 pm
Grant Fritchey (9/3/2009)
No, no. They went across state lines to get a list of customers from a tire company in order to identify the customers that came from MASS so that they could go and collect from them... They lost the case on appeal. I'm not just talking about the law that requires you to come home from vacation and pay taxes on anything you purchased while you were away. These guys were trying to get serious, but were handed their heads in court. Good thing too.
Pennsylvania cut the middle man out. They just parked plain clothes troopers in cars across the border in Delaware. they then wrote down tags from all PA people stopping in to shop....
That didn't stick for very long, but it's the same trick.
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Your lack of planning does not constitute an emergency on my part...unless you're my manager...or a director and above...or a really loud-spoken end-user..All right - what was my emergency again?
September 3, 2009 at 3:02 pm
CirquedeSQLeil (9/3/2009)
Let's throw another take on it.I run my business out of Mass, but use the software and services you provide - which have no physical presence in Mass. In order for me to abide the law, I would need to find an ASP that will abide the laws in Mass. If the ASP wants my business, then the ASP needs to be able to do what is required by the law. This is true whether we are talking interstate commerce or global commerce. We have several clients from abroad for each of whom we must be able to meet the requirements put on by the government no matter how inane and stupid they may be (and some are extremely stupid - ie in Israel we are required that all Israel orders be sequential to each other - despite there being orders from other countries in the same database. In this one the client would not permit a report that simply displayed them sequential, the orders had to be stored sequential.)
Controversial or no, their take is that they get to deal with the fallout from the breaches (local state attorney's office often get involved in these cases to "represent their constituents"), so they get to go after you if you are going to cost them lots of wasted resources.
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Your lack of planning does not constitute an emergency on my part...unless you're my manager...or a director and above...or a really loud-spoken end-user..All right - what was my emergency again?
September 3, 2009 at 3:07 pm
CirquedeSQLeil (9/3/2009)
Let's throw another take on it.I run my business out of Mass, but use the software and services you provide - which have no physical presence in Mass. In order for me to abide the law, I would need to find an ASP that will abide the laws in Mass. If the ASP wants my business, then the ASP needs to be able to do what is required by the law. This is true whether we are talking interstate commerce or global commerce. We have several clients from abroad for each of whom we must be able to meet the requirements put on by the government no matter how inane and stupid they may be (and some are extremely stupid - ie in Israel we are required that all Israel orders be sequential to each other - despite there being orders from other countries in the same database. In this one the client would not permit a report that simply displayed them sequential, the orders had to be stored sequential.)
Now that I can sort of agree with that. Basically they can't enforce against me, but they could TRY against you.. And you would only have a case against me if in my EULA I stated that I would either abide by state laws (which I would never be that broad, I mean come on..) or that I would abide by a particular law in a particular state as enacted. I'm not a sub-contractor in this scenario which I could see being obligated to follow the rules. I think I could argue (based on a service I'm working on) that I would be a common carrier and therefore not subject regardless. I bet the phone company gets to tell MA to go fly a kite.. Or any other business that doesn't have a physical presence..
September 3, 2009 at 3:12 pm
I've got kind of an off the wall question, aren't businesses fleeing from states like MA and CA, aren't they even further down than other states in this downturn?
Just wondering..
September 3, 2009 at 3:22 pm
Can't speak about MA and the flight of companies, but CA seems to have a corporate departure.
I know of a few companies that have left the state for other more prosperous regions (or less costly).
Jason...AKA CirqueDeSQLeil
_______________________________________________
I have given a name to my pain...MCM SQL Server, MVP
SQL RNNR
Posting Performance Based Questions - Gail Shaw[/url]
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September 3, 2009 at 4:10 pm
Elliott W (9/3/2009)
I've got kind of an off the wall question, aren't businesses fleeing from states like MA and CA, aren't they even further down than other states in this downturn?Just wondering..
Through no fault of the leaders of the state, MA is doing better than the national average on unemployment, last I heard. However, the governor and the legislature are working hard to reverse this positive news. I'm sure we'll catch up to California soon.
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September 3, 2009 at 8:43 pm
Grant Fritchey (9/3/2009)
Elliott W (9/3/2009)
I've got kind of an off the wall question, aren't businesses fleeing from states like MA and CA, aren't they even further down than other states in this downturn?Just wondering..
Through no fault of the leaders of the state, MA is doing better than the national average on unemployment, last I heard. However, the governor and the legislature are working hard to reverse this positive news. I'm sure we'll catch up to California soon.
Ah, the old motto, if it aint broke, fix it till it is..
September 9, 2009 at 7:17 am
Elliott W (9/3/2009) Basically they can't enforce against me, but they could TRY against you.. And you would only have a case against me if in my EULA I stated that I would either abide by state laws (which I would never be that broad, I mean come on..) or that I would abide by a particular law in a particular state as enacted. I'm not a sub-contractor in this scenario which I could see being obligated to follow the rules. I think I could argue (based on a service I'm working on) that I would be a common carrier and therefore not subject regardless. I bet the phone company gets to tell MA to go fly a kite.. Or any other business that doesn't have a physical presence..
They can TRY to enforce against you, too. There's nothing in federal law that says they can't sue you for your lack. And as the MA company would have and should have made you sign a EULA saying you would abide by MA law, then MA's State Attorney can definitely enforce the law against you. So, your argument is invalid in this context. You signed the agreement with the MA company saying you would abide by MA law. If you refuse to sign the agreement, then the MA company is BY LAW not allowed to do business with you anymore.
This is the whole point of the vendor agreement part of the law. In fact, MA will probably crush any MA company (financially) that doesn't go back and get those agreements or fails to correctly implement them.
September 9, 2009 at 7:20 am
BTW, I should mention that I work in the insurance industry and have worked in the records management industry. I have actually seen things like this happen in both. A state changes their laws and suddenly we receive "You must comply or you'll lose our business" notifications. In both industries, the legal departments scrambled to understand the law, create new company regulations and make sure everyone was aware of the issue.
So regardless of the "enforcability" of the MA law, no lawyer worth his salt is going to risk his job by ignoring the issue.
September 9, 2009 at 11:08 am
Brandie Tarvin (9/9/2009)
They can TRY to enforce against you, too. There's nothing in federal law that says they can't sue you for your lack. And as the MA company would have and should have made you sign a EULA saying you would abide by MA law, then MA's State Attorney can definitely enforce the law against you. So, your argument is invalid in this context. You signed the agreement with the MA company saying you would abide by MA law. If you refuse to sign the agreement, then the MA company is BY LAW not allowed to do business with you anymore.This is the whole point of the vendor agreement part of the law. In fact, MA will probably crush any MA company (financially) that doesn't go back and get those agreements or fails to correctly implement them.
I don't think I agree that federal law doesn't preclude it. First, I don't sign (or agree) to a EULA, they do, I'm the provider not the end-user. My EULA, like most others have a clause that effective says if you need to sue me then you shall do it in MY state in MY home district and subject only to my home state law, any other action is in violation of this agreement and opens YOU to suit for breach. The goal being if you want to sue you can't drag me into your state you have to do it in mine, or I get to sue YOU for fees. The Constitution allows only the federal government to regulate interstate commerce. The states get to play in their own borders. This is why absent a federal law MA can't make an IL company (with no presence in MA) collect MA sales tax and send it to them, but they can (try to) make MA residents report those out of state purchases and pay sales tax to them and have legal standing to do so.
I'm curious how many non-MA companies are willing to voluntarily comply with the law, I'd like to see what MA is going to do about it.
You bring up an interesting point, but you actually do business in that state, this is not unlike the bank discussion earlier, federally chartered banks are not subject to state banking laws, state chartered banks are. I'm not aware of any provision to federally charter insurance companies, I'm not saying there aren't, but I just don't know of them. What this means is that a state can pass a banking law, and as a federally chartered bank I can utterly ignore it and the state CAN'T DO ANYTHING ABOUT IT. You also tend to have physical presence in that state, an office, a claims center, something tangible, that potentially subjects you to the laws of that state. you don't really have a choice but to comply..
All of this is really beside the point though. What the MA law is trying to accomplish is a good thing, and it might even make sense. Where I have a problem is that I don't live in MA or having any physical presence in MA and I refuse to be subject to their laws without giving them my EXPRESS permission, which I just won't likely do.
CEWII
September 9, 2009 at 12:33 pm
I guess we'll just have to agree to disagree on this particular topic, then.
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