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Calling B.S. On Amazon's Taxation Arguments
theodp writes "Over at the Center on Budget and Policy Priorities, Michael Mazerov carefully picks apart Amazon's arguments against collecting sales taxes, arguing that they simply do not withstand scrutiny. While Amazon officials say collecting sales tax in every state would be excessively burdensome, Mazerov notes the e-tailer already collects sales tax in virtually every state for numerous other companies that sell on its website. Mazerov also finds it disingenuous for Amazon to argue that it should not have to help support public services in states in which it has no physical presence when the company fails to support public services in most of the states in which it does have a physical presence. Finally, Mazerov isn't buying Amazon's argument that its opposition to collecting sales tax is not driven by a desire to gain a price advantage over competitors, which he finds at odds with the company's own actions and SEC filings. By claiming sales-tax immunity, says Mazerov, Amazon has enjoyed an unfair 5%-10% price advantage over local retailers, while also depriving states and localities of hundreds of millions of dollars of legally due revenue each year."
It is unrealistic for every company to figure out what sales tax applies in every state, that is why there is a company that does it for you: Vertex. I recently worked on a project to implement this software for a large retailer. Amazon has far more technical knowledge than the average bricks and mortar retailer, this is no reasonable excuse as to why they cannot pay local sales tax. It is long past time for the online retailers to start paying sales tax just like every other business.
Not having to pay sales tax is one of my primary reasons that I often buy products online. Online retailers already have a lot of advantages for many types of products, there is no reason that they should be subsidized over local retailers.
Counties and cities have their own sales taxes, so a state lookup or even a zip code lookup wouldn't cut it. You'd need to know what municipality the buyer is in, then get state, county, and municipality tax rates.
Don't blame me, I voted for Kodos
I call BS anyway. There are only 50, is it too much to have some schmoe simply look the damned tax up on a sheet of paper? WTF?
If only it were so simple. The US sales tax system is a byzantine mess. You have state taxes, city taxes, transit authority taxes, public improvement fees, etc which apply based on where the sale occurred. That is the easy piece though. The difficult part is that the tax rates themselves can be different based off the products. Some products are taxable in one state but not in others. A simple example is plain bottled water which is pretty much untaxed everywhere, and flavored bottled water which is taxable in most states. Then you have tax free holidays where a certain class of products are tax free for 3 days (typically back to school), but it is a different set of days for different areas of the country of course.
To top all that off, cities, states, etc are constantly changing the rules as to which products are taxable and which are not. It is a real pain in the a** to deal with, but all of the national retail chains have to deal with it, so why can't Amazon and the other online retail companies? The best case would be to just have a national sales tax that is the same everywhere instead of the current stupid system. Instead of forcing companies to devote millions of person hours to figuring out what taxes to pay, people could actually be doing something productive.
Actually, if you leave that field blank on my state's taxes, your odds of an audit go up by nearly an order of magnitude. More so if you are over 55 and have multiple credit cards. (as they know you likely use mail order, and likely there's money to collect).
Proving these violations is REALLY EASY for a state. They simply need your bank statements and credit card statements, and they look for checks and credit purchaseds from out-of-state companies they already know don;t colelct tax, and then bill you the tax, times three, plus interest and penalties (usually ending up somewhere around 7 times the taxes you should have paid). This process takes about 30-60 minutes for the agent, and you get screwed. I know SEVERAL families who have gone through this recently, having made numerous large purchases online.
The state is not only concerned about purchases made without paying tax, they're also looking for in-state companies you may have paid that to, so they can go after them as well... This is easy money for the state, and an easy argument to get past thhe public (the 90% who bought locally and paid taxes don;t like you assholes who not only fail to, but send your money out of state instead of buying locally and supporting the economy). It's a win-win for the politicians, and a huge negative credit mark and a big bill for you.
Most people understand this... you need to learn it. You can choose the easy way or the hard way. (if you;ve been cheating a while, I'll vote for the hard way for you).
There is no contest in life for which the unprepared have the advantage.
Ahem.
The IRS has *nothing* to do with Use Taxes. That's your local Member State that collects use tax, not the central government.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
Strangely enough, I agree with this. I'm definitely not against taxes in general and sales tax specifically, but it doesn't make sense to me that a retailer should be required to lift a finger to help a state government from which it gets nothing in return. Those taxes are not going back to Amazon; those taxes are going to pay for things like police and schools in the community in which the *buyer* resides. And yes, the buyer is the one actually paying the tax, but it is ridiculous to expect a company outside of the state to pay any of their own money (in time and effort) to do the work of collecting that tax when they have no say over whether and how that tax is collected.
The states' beef is with the buyers, the actual payers of the tax, who then see the benefits from those taxes. They should be the ones required to collect their own taxes, not the retailers who will never see a dime of the money they spend collecting the tax come back.
This is really no different than what the RIAA is doing. It's the same mentality; if you can't get recourse with the people who you actually should be going after, then just go screw somebody else somewhere up the chain instead.
Try 100K. We get a monthly update of 100K records.
Infuriate left and right