Hacker News Reader

Comment by Shivetya | Hacker News Reader

The money line is the statement where they believe there are no laws preventing them from selling cars in all fifty states.

There are no laws "currently" is a better phrase. Should Tesla become a serious maker of cars; having one model and a goal of only 35k a year keeps them at the size of Porsche; then they are going to attract attention. That they have received Federal money and their cars are subject to incentives by the federal government and states will put pressure on legislatures to extract "something" from them.

To put their sales goals into perspective, a luxury brand like Lexus can sell over 20k a month. The top five sell a hundred thousand plus cars per month. Chart of August sales is at http://www.autoblog.com/2012/09/04/august-2012-big-jumps-edi...

View on HN

As long as it is interstate commerce and Tesla maintains no business presence in a state, that state government can't regulate.

"maintains no business presence in a state"

Amazon's recently experiences with sales tax collection shows that a motivated government will keep its eye out for "business presence" and then regulate when it becomes politically useful. Freedom's just another word for something too small to bother regulating.

Tesla doesn't have affiliates so they are not subject to the same problems Amazon had.

On another note, states already have rules dealing with buying a car in another state, so it is settled law.

Jurisdiction for state taxation is not a matter of business presence, it is a matter of having sufficient nexus. This is and always has been the deciding factor.

When Amazon was "just" an online "catalog", it could take advantage of cases like Quill Corp, which held that a catalog with no physical presence in a state and which sold few goods into that state did not have sufficient nexus to establish the state's jurisdiction to tax.

However, Amazon is the single largest retailer by volume in nearly every state in America, topped only by Walmart. It sells a substantial volume of goods into every single state. Legal commentators, including numerous former SCOTUS law clerks, have noted that if Amazon were to challenge state sales taxation today, it would lose because the justification set forth in Quill does not apply. And that's with a significantly more conservative/libertarian SCOTUS than in Quill.

I don't think this is accurate, because it means states get to regulate to interstate commerce based on their size which would mean a trucking company that crosses some magical threshold could also be regulated even if no sale took place in that state.

Well no, it's not a matter of size nationally. It's a matter of the size of the business or business activity within that state giving rise to an economic "nexus" with that state.

Transit through a state is not considered a business or a business activity, hence the trucking company could not be regulated. It could be different for a travel company, but in such case that would be services income which is not subject to a sales tax.

If a company is paid to transit something, and it pays a trucker to drive though a state then clearly that's a business activity. It's complected, but for a example is states can only regulate the emissions of vehicles registered in their state. As a counter exmaple states can regulate weight limits for trucks.

It helps to look at it this way: is the actual business activity of getting goods from point A to point B related to the state for any economic or business purpose other than incidentally transiting through the state? (For example, are goods being delivered to customers in that state?) If so, you may but probably do not have a business activity in the state.

With a travel company, the distinction is that the journey is as much a part of the business activity as reaching the destination.

Later, the article mentions how Tesla must put up service centers in some states to be allowed to sell there. Doesn't that count as a business presence?

Looks like all the talk about Service got Tesla to change their facebook cover photo to 'Tesla Service: 24/7/365 We've got you covered'

FB link: https://www.facebook.com/photo.php?fbid=10151155042807801...

Direct image link: https://sphotos-b.xx.fbcdn.net/hphotos-ash4/376922_101511550...

No, it's the other way around -- in some states, if Tesla puts up a factory service center, then they must have a dealer's license.

Tesla is adding service centers, which many states require for vehicles to be sold there.

You want to bet on that?

Reply on news.ycombinator.com