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NY Times, LA Times Want Amazon To Collect More State Taxes
theodp writes "Recalling that CEO Jeff Bezos originally explored placing Amazon.com on an Indian Reservation near San Francisco to 'have access to talent without all the tax consequences,' the NY Times argues it's time to put an end to the e-tailer's 'entity isolation' tax-avoidance games. The LA Times chimes in, saying Amazon's claims that collecting sales tax constitute an undue burden are 'worth a horselaugh,' noting that Amazon boasts it has no problem keeping track of millions of unique products."
Amazon has to collect taxes in countries where the law makes it mandatory, e.g. in the EU. So it's not so hard.
Amazon UK manages to collect the appropriate VAT, depending on country. Which is why, if you buy from e.g. Denmark, you should order from one of the smaller UK book stores so you get to pay the UK VAT (0% on books) instead of the Danish one (25% on everything).
Finally! A year of moderation! Ready for 2019?
The NY times article chooses to skip mentioning all the taxes other than sales tax Amazon would be paying in those areas with its isolated tax groups. I also think it's cute that they feel amazon has a moral right to pay more taxes in this 'time of hardship'. But really, people are surprised when a company is avoiding as many taxes as possible, especially a tax that would make them less able to make a profit? They're surprised people aren't paying use taxes?
I don't care what you say, all I need is my Wumpabet soup.
The state and federal governments made complicated tax laws and Amazon is following them in a business efficient manner. What is their problem?
Home of The Suki Series
It might not be an undue burden to Amazon, but what about smaller online companies? You could use software to manage the collecting of sales tax for everything but the real problem comes to sending off that money to every town, county, and state that collects sales tax. Someone buys something for a couple bucks and suddenly you have to send payments of a few cents to three different places. Even if you save it all up and send it bi-yearly you could be looking at thousands of separate payments based on how widespread your client base is.
You can't just look at a huge company with millions in revenue and make a one size fits it all decision.
if there were no tax heavens anywhere in the world and businesses just paid what they owed like the rest of us. Sure the prices will go up but if this happened from the get go, it wouldn't be an issue. I'm annoyed with companies avoiding paying tax but then using the government system to seek protections or create laws for their benefit.
Jonathanjk.com
The letter of the law may allow someone with access to expensive lawyers to avoid paying taxes, but it is not in the spirit of the law?
"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands."
(US Appeals Court Justice the Honourable Learned Hand)
This is an attempt to please brick and mortar stores who want to push electronic sales into the toilet. On line sales already carry a great burden in shipping costs. If you add taxes on top of shipping costs you kill online sales completely.
Obeying the law is not a loophole.
Of course. It is: that's what "loophole" means - something that is within the law, but allows someone to avoid something to which, morally the should be liable.
Athletic Scholarships to universities make as much sense as academic scholarships to sports teams.
Yes, there is a real burden here. A "brick" store only has to deal with exactly ONE tax rate, which is the rate for their physical location. A chain of stores would only need to deal with this on a per-store basis. However, the web retailer is expected to charge tax based not on their own physical location, but rather, the location of the customer ordering the merchandise. This means keeping a database, and keeping it updated, for each and every single tax jurisdiction in the country. In many states this varies by individual city and town. There are thousands of these. In some cases they are even split across zip codes. And it's not just rates to worry about. Different jurisdictions have different exemptions of what products don't require a tax (food in one place, only perishable food in another, bath products might be included in another, school supplies exempted in a few, etc).
Then there is the issue of ensuring the taxes get paid to the proper government entity. That and making sure people are not subverting the system by sending packages to other locations.
Some solutions to this are possible.
I suggest that instead of the stores charging the tax, the credit/debit card processor charge the tax. The advantage of this is that they readily know the billing address of the account holder. Their payments to the government entities would be more in bulk, instead of these governments getting thousands of small payments from all the "mom and pop" web sites that would be compliant with tax law changes. The one change that would need to be made is each credit/debit charge would need to have split up according to product type classifications (a federal standard needed for that).
Another alternative is for a federal law that simply requires each of the states to submit ONE tax rate for the whole state, and accept a set of exemptions designated by that federal law, to be part of the inter-state tax program. One other requirement is, to be a part of it, they treat in-state web retailers exactly the same as out-of-state (e.g. all or nothing).
The burden on web retailers is NOT a myth. It is very real. Amazon can probably handle it. But you know the smaller retailers will be next, and eventually they will try to impose this on others. Taxes are essential, but it needs to be kept simple. Also, smaller retailers need to have a SINGLE (not 50) payment destinations (a central clearinghouse for this).
now we need to go OSS in diesel cars
There is _nothing_ wrong with avoiding taxes. My God, if we have a right to an attorney to help us avoid jail time, we ought to have a right to avoid spending 1/3rd of our life working for the government.
Well, like everything, to a point. But in Delaware's case, the roads are paved on time, traffic is manageable, public services are good, and things are rolling along. Like, I have to ask, what exactly does New Jersey or Maryland do with all of their dough, because, in both cases, services are worse and the roads are worse.
I think what makes Delaware tick is that you have some genuine bipartisan centrist leadership. Democrats and Republicans alike are not the crazies that are in Washington DC.
This is my sig.
It's not Amazon that would be paying sales tax. The buyer pays the tax. Amazon just doesn't want to a) deal with administering separate tax rates and payments to multiple States and b) have it's perceived prices increase with the addition of tax.
The funny thing is in general I agree with your view on taxation; it's just that in this instance your argument doesn't fit the issue.
All it would take is for California and New York to each pass a law creating a standardized tax rate for their entire state. No local sales taxes, etc. Just a single state sales tax which is redistributed by the state tax authority to municipal governments. It would then be as easy for Amazon as "cut a check every month and mail it to Sacramento or Albany."
Now, for out of state businesses, shouldn't the ONLY real burden be on the transit systems(roads and rails)?
No. Sales taxes go into general coffers are are used to pay for all types of services. Rails are private, we have no nationalized rail in the USA. That leaves roads, and heavy trucks do almost all the damage done to roads by vehicles (the majority of the remainder being done by weather.) Amazon also receives the benefit of police protection; without police, anyone would be free to loot their warehouse. They receive fire protection in that the FD will show up and try to put a fire out if their building is burning. Need I go on?
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Where every single tiny loop hole in the law is exploited to the fullest by the large cooperations and everyone else has to obey the spirit of the law because they can't setup the giant shell game that is required to avoid paying taxes. How many fully owned separate legal entities comprise Amazon? It's all one giant cooperation for all intents but they break it up into a ton of little pieces to get around the spirit of the law. Leaving everyone else to have to make up for Amazon skips out on paying. It's not a level playing field.
It reminds me of the ownership structure of Ikea, which is extremely complex, but ultimately results in almost no taxes. Which is great for Ikea, but horrible for everyone else who has to pick up Ikea's share.
http://en.wikipedia.org/wiki/IKEA
Look it up under corporate structure.
And then there are states like New Hampshire, with no state sales tax (and no state income tax, either)
I guess these dying dinosaur newspapers will concentrate their efforts where governments are largest and extract the most wealth from the serfs.
Part of the Second American Revolution!
The NY Times and other paper publications are right now on a crusade to attack the low cost base of internet business.
They are talking about de-indexing Google for similar reasons.
We should understand the interests behind such attacks.
Apple seems to handle collection of local taxes quite well. They even know that part of my zip code is PIMA county instead of Tucson city, and thus has a (slightly) different tax rate.
I am starting a business with a friend (actually, she does the hard work, and I provide the business and some financial backing), but we collect sales tax in Arizona, and California for selling our images. Amazingly, Quickbooks handles this fine. I just do not happen to live on an Indian Reservation, like Amazon did in placing their Arizona presence.
Truth be told, I do not pick retailers online due to tax free or not. I pick them by reputation, and past experiences. If Amazon one day started collecting taxes and whatnot for the goods purchased through them, I probably wouldn't blink. And I venture to guess that most of their customers wouldn't either. They need to rethink their business plan.
What this really points out is that the tax code (federal and state) needs a thorough cleansing and simplification. Remove the loopholes, tighten the standards, and make the collection and rates balanced, and much of this behavior should disappear.
I suspect I will see pigs flying before this happens though
Suppose you were an idiot and suppose you were a member of Congress
Reagan did lower taxes...only to raise them again, a year later. Apparently he saw that the deficit grew too large too quickly. However, this part of the Reagan aura is frequently left out by his devoted followers. Even Reagan realized that Reaganomics didn't work. However, tax cuts are popular, and tax increases are unpopular, and thus we find ourselves in the situation we are in now, with trillions of dollars in debt, and the light at the end of the tunnel growing dimmer and dimmer.
I don't like Linux. This doesn't make me a troll.
Which their warehouse has property taxes, the employees pay income tax on, also the fed-ex and ups charges include fuel costs and taxes.
The fuel costs and taxes are insufficient to cover the cost of the damage done by shipping. On average a semi-tractor with a reefer unit will get about 6-7 mpg, which is a third to a quarter (say) of the mileage of an auto, yet it does more than three or four times the damage that the car would do; The relative damaging effect of an axle is considered to be approximately proportional to the fourth power of the load. In other words, a 40 ton truck can easily cause as much damage to a typical road as 60,000 one-ton cars. Yet they pay only a few times as much in fuel taxes (since that is tied to fuel consumption) and only a few times as much in registration fees. There are several orders of magnitude unaccounted for here. Where do you propose the difference should come from? The pockets of those who live in the same tax region?
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Nobody owes anybody anything. Some choose to donate out of their own free will. Others don't. The freely-chosen donations of one person do not, in any way, imply that another person should be required to "give" in order to "match up".
If you disagree, then, well, my mom gave me a really nice roasting pan for Christmas. To match a small part of her generosity, I'll be expecting a measuring cup set from you.
Breaking Into the Industry - A development log about starting a game studio.
Guess what else the two newspaper articles failed to make completely clear...that the 'someone' is you and me. This isn't about Amazon paying more corporate tax, but Amazon collecting sales taxes from sales to everyday people. The internet has given the average person a small but noticeable tax cut. We obviously can't have the populace spending their money how they would want to, so we have to stop this right now.
Rich men trying to give their hard earned money to the government? Blasphemy.
He favors an estate tax, which would force others to pay. It's not about trying to give his own money to the government. He has said he plans to give his money to charity, so the estate tax has no impact on him.
How do you think Buffett feels about taxes that actually affect him? Hmm well check out this article if you're curious: http://online.wsj.com/article/SB125729682025626851.html
If you really hold that the general principle that "Nobody owes anybody anything" is valid, then I suppose "sharing" is delusional and childish, "sacrifice for others" is delayed gratification, "charity" a clever misdirection or an attempt at ego agggrandisement, and "community service" is an atonement for misplaced guilt.
Again those are all voluntary actions. Don't you think that's an important distinction from compulsory taxes?
As with catalog sales in the days before the Internet, Amazon.com is not required to collect taxes in any jurisdiction where it doesn't have a business presence. There's no trickery involved. Amazon doesn't collect any taxes it isn't required by law to collect, just like you don't pay taxes in states that you've never set foot in.
Since only the federal government can regulate interstate commerce, the ability of State X to force Amazon.com to collect its taxes when it doesn't have a presence in that state would require federal legislation to that effect. Also, for any such federal law to work it seems to me that tax rules and rates would have to be simplified across all 50 states. There's an effort to do so called the Streamlined Sales Tax Project, but despite its name it strikes me as ridiculously overcomplicated (as in "you need a certified computer program to handle the differences between each state's rules") due to the desire to please all the participating states.
"In prison you just have to shut your eyes and take it. Here you have to shut your eyes and give it."