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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."
"Sales" tax is still being levied in the form of "use tax" that consumers are supposed to pay on their state tax returns. Just because most consumers are committing tax fraud doesn't make Amazon a guilty party here.
Calling B.S. On Amazon's Taxation Arguments
Who the hell cares what Amazon claims? If you think it should be taxed, write your representatives and demand they do something about the bill that's been renewed through 2014.
And why are we singling out Amazon? Why not Dell or Newegg or even ThinkGeek? Is it because Amazon is doing too well?
Things just don't add up in Mazerov's posting. He levels charges that sound trivial to prove and prosecute--charges that would result in a lot of back taxes paid to a state. Why doesn't he call one of his colleagues up in any of these states and give them all they need to make a name for themselves? The only reason I can think of is that it's a not a cut and dry clear win for the state. Or there are simply too many companies they'd need to prosecute alongside Amazon -- like Best Buy or Walmart who have a presence in every state and run an e-commerce site.
My work here is dung.
When you buy something online or via a catalog, you should pay the taxes from the place it was shipped.
If I go to California to buy something, I have to pay California's taxes and not my own. If I pay someone to go to California to buy something for me, I'd have to pay California's taxes and no my own. But for some bizarre reason, when I pay FedEx to ship it to me, suddenly I do not have to pay California's tax but I have to pay my state's use tax.
So to give an example, if I buy something from Amazon and it ships from California, Amazon should bill me California's tax.
Here's why states hate this idea. Because it would allow the states to compete with each other to bring more shipping business into its state. For example, merely to get a bunch of shipping centers built in Oregon, that state could have no such tax. Amazon would then build their shipping centers there and the other states would get nothing.
There's nothing the government hates more than competing.
If someone says he and his monkey have nothing to hide, they almost certainly do.
There are over 160,000 different sales tax rates in the US. Then there are exceptions like to a maximum item value of $2000 in Memphis or which item is charged which tax.
Also the tax rates are normally aligned with boundaries that postal code, city name or county do not follow, so just checking what mailing address does not help. In Washington State the tax rate follow elementary school boundaries for MTA additional amounts.
There are exception areas that like county land inside of incorporated city boarders. Arkansas has alot of towns like this one block in the center of town has a different rate.
Lastly, there is Texas that bases the tax based on location of the business.
All of this do able - I did it for nationwide service company (kill bugs). Personally, I would place the tax calculation as part of shipping requirement and look to Fedex and UPS to supply the tax rate to use.