Blue Jeans Cable

We're seeing an increase in online posted content where people are using ChatGPT and similar services to answer questions about electronic wire and cable, and the answers people are getting from these chatbots are frequently way off the mark.

This wouldn't bother us too much, except that at times we find ourselves in e-mail or telephone conversations, arguing against a chatbot and having it referenced as an authoritative source on any number of subjects. The chatbots are not only frequently wrong; they are often very badly wrong.

In a world where "AI" is an increasing presence, we are old-school. We are actual human beings who physically handle, process, terminate and test wire and cable every day of every week. We study application issues surrounding wire and cable. We design cables and connectors and have them built to our specification for our use. We program, maintain and repair the wire-processing machines we use to strip, weld, cut and wind cable. We attend seminars and trade shows to learn about wire and cable. In short, while we are fallible like anyone, we actually do know a fair bit about this stuff. And when you call or e-mail our shop, you're not getting answers from somebody in customer service whose only connection to these things is from working in the same building where they are made. You're getting them from the very people who make the products we sell. We've never much liked the idea of having customer service reps who work from a script rather than from first-hand experience.

Our advice? Ignore the chatbots. If you have a question we are happy to answer it, and we have the technical and practical background to do it. But please don't ask us to engage in a debate with a chatbot.

Blue Jeans Cable is hiring! We have a need for a full-time customer service rep/cable tech and for one or two part-time cable assemblers -- the latter being a great job for college students and the like, as we are very flexible on scheduling. PM us here if you live in the Seattle area and are interested in details...

Good news for our Illinois customers: due to changes in state law, starting January 1, Blue Jeans Cable will no longer be obligated to collect Illinois sales tax. Sales through Amazon in IL will remain taxable, but sales through our website will not.

This is a topic about which a lot of customers -- not just in Illinois -- have asked, and about which there's been quite a bit of confusion. Blue Jeans Cable has essentially no physical presence anywhere in the USA other than Seattle, Washington -- so why do we charge sales tax in about twenty states?

Well, back in 2018, the US Supreme Court upset a long-standing precedent on the authority of states to impose sales tax on out-of-state vendors. For a long while, those taxes were unenforceable because a traditional reading of the Interstate Commerce clause of the US Constitution prohibited states from regulating commerce between the states, and that meant that practices of states which burdened interstate commerce were frequently -- not universally, but frequently -- unlawful. This included imposition of sales tax collection obligations on sellers who lacked a physical presence in the state to which the goods were shipped.

States didn't like this, of course. Theoretically the obligation to collect and remit the tax still existed, but was placed on the local buyer of goods -- but in practical terms that was seldom enforceable due to the states' lack of access to the relevant information and the small size of most such obligations. And states pushed, in a variety of ways, to open the floodgates. California was particularly aggressive on the point, and used to send letters to out of state vendors trying to bluff them into collecting taxes they had no obligation to collect.

But then came the Wayfair case before the US Supreme Court. It's a complicated subject and parts of the governing law remain unclear due to a rather nebulous decision, but in essence the Supreme Court held that a state could set reasonable thresholds for the tax-collection obligation upon out of state sellers, and that if those thresholds were indeed legally reasonable, those sellers could be obligated to collect and remit state sales taxes. Many states imposed such thresholds in the aftermath of Wayfair, often at the level of $100,000 in annual sales and/or 200 annual transactions. We meet thresholds in a variety of states, and additional wrinkles come into it as well -- many states contend (incorrectly, we believe, but who wants to litigate?) that the mere presence of inventory in a third party's hands (read: Amazon fulfillment warehouses) in the state constitutes a "physical presence" giving rise to sales tax nexus, even if the seller has no control over the location of that inventory or access to it other than the right to demand it be shipped back.

Who to blame? Kennedy, Thomas, Ginsburg, Alito and Gorsuch are responsible for the mess, while Breyer, Roberts, Sotomayor and Kagan dissented. The majority were persuaded by, among other things, self-serving amicus briefs by companies which sell sales tax compliance services; those companies assured the Court that sales tax compliance would be really easy and would cost next to nothing, "because software." Software which, conveniently, they sell at a price quite a bit higher than anything they suggested to the Court. Of course, actually implementing sales tax calculation and filing systems is a hideous mess, fraught with all manner of difficulty, and it is now a regular monthly ritual here, with BJC collecting and filing sales taxes in about twenty states. And that software? Well, we don't use it; it would be wrong, in our view, to reward the companies that aimed this particular bazooka at small business, and so we have had to build our own compliance systems.

Illinois, thank goodness, after being one of the most complicated states for sales tax compliance, has done something downright sensible. It eliminated the 200-transaction threshold (we were hitting that, but not the $100K threshold) and it clarified its stance on "physical presence" by declaring Amazon inventory, in most cases, irrelevant to physical presence. Illinois residents will still pay sales tax on a lot of out-of-state purchases, but as of January 1, not on purchases from our website.

If you don't live in Illinois but have the ear of a local legislator, this isn't a bad topic to raise. Sales tax compliance is relatively easy for huge companies with legions of accountants, but it's a real hardship for smaller businesses like ours. After Wayfair, it may be unreasonable to expect a state to give up the idea of collecting from very large vendors like Amazon, but lifting that burden from businesses of more modest size doesn't actually cost states that much (if anything at all -- on small accounts, administration can cost as much as the taxes that are collected).