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Court: Borders Web Ops Must Remit CA Sales Taxes
ScentCone writes "A rather quiet appellate court ruling finds that Borders must start coughing up sales taxes to California. Even though Borders spun off their online business to a separate company (now run by Amazon), has no employees, physical facilities, banking, or other activity in the state, the court found for California. While this is at first alarming (unless you write e-commerce software, in which case this may be the Programmer Permanent Employment Act), the court's reasoning was that despite the separate structures, the Borders brick-and-morter presence in CA, some overlapping board membership, common logos, cross-promotion, etc., meant that the two divisions were too entangled to fend off CA's army of hungry revenuers. Ramifications could include good old print catalog operators, store-less biggies like Amazon that have partnerships with CA companies, and more."
Because a buyer in one state is not under the jurisdiction of another state.
You are "magically exempt" from a foreign state's vehicle registration fees as well.
KFG
I'm not sure what bothers me more - that you don't see the basic glaring flaw in your reasoning here, or that at least one moderator considers this "insightful".
This is a tax on transactions occurring in California. The taxes are levied by California's government against California citizens. Last I heard, California still had elections.
It's not like California is asking for taxes to be paid by some lady in New York who's shopping at Borders.com.
#DeleteChrome
I am a partner in a small specialty by-appointment bookstore in Los Angeles with a strong web presence and average internet sales of about $75 per. We charge 8.25% for orders sent to California addresses even if they're in San Diego (7.75%), San Francisco (8.5%), or Salida (7.375%). Every year without fail we battle some library or museum that insists on paying their local sales tax. They're generally slow payers (not nearly as bad as film studios though) but when we fill out the tax forms in January they ask for 8.25% and we have a healthy fear of audits. Whether a California customer calls, writes, faxes, emails or orders through our website we charge the same as if they were in the store.
The majority of books offered for sale (although not necessarily the most prominently placed) on these mega online bookstores are owned, shelved and shipped by small independent booksellers. They collect the money and deposit it into our account minus their commission and we drop-ship the orders. An order can be shipped across town without the big boys ever seeing the book and without depositing a dime into the state's coffers. Our sale is to the ethereal, tax sheltered Amazon not John Doe.
WARNING - RANT It amazes me that perfectly rational geeks will allow themselves to be fleeced by these online Wal-Marts when they can go to a site like http://addall.com/ or http://bookfinder.com/ and pay up to 25% less for the same books often from the same seller. Our websites might not be as fancy but why order from an ethically questionable corporation when you almost as easily get the exact same thing and pay a little less dealing with an independent bookseller. Plus I think it's nice to get a personal email from a human being thanking me for an order.