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Every Day's a Tax Holiday At Amazon
theodp writes "With Black Friday here, Slate's Farhad Manjoo reminds readers of how Amazon.com undersells Best Buy, the Apple store, and almost everybody else. Read his lips: no sales taxes. Unless you live in KS, KY, NY, ND, or WA, you'll pay no sales tax on many purchases from Amazon, giving Amazon a huge — and largely hidden — price advantage over most other national retailers. Amazon CEO Jeff Bezos is certainly no fan of taxes — he explored founding Amazon on an Indian reservation, and recently ponied up $100,000 to defeat a proposed WA state income tax, a good investment for someone who's cashed in close to $800,000,000 in Amazon stock this year alone. So, is Amazon's tax-free status unfair? Of course it is, says Manjoo. Amazon has physical operations in 17 states in which the company and its employees enjoy the fruits of local taxes — police and fire protection, roads, hospitals, and other infrastructure that make its operations possible. Yet Amazon skirts tax collection in most of these places through clever legal tricks."
Just because Amazon doesn't COLLECT sales tax doesn't mean you do not have to pay it. In Virginia (and I expect most states with sales tax), you are required, by law, to list your out of state purchases each year on your income tax forms and pay the tax.
These workers in turn pay income taxes and sales taxes (when they purchase goods and services) which pay for the roads and infrastructure.
Well, if they buy stuff from Amazon they don't pay sales taxes, which is exactly the point, son.
There are no sales taxes in my state. Trying to argue that Amazon is "ripping off" anyone seems like the wrong argument. On the other hand, states with sales taxes... now there one could make a good argument for ripping people off. Especially considering how far out of constitutional compliance most states are (just following the feds, I know.) As for roads, isn't that typically part of fuel taxes, a use tax, more or less?
I've fallen off your lawn, and I can't get up.
I was looking for a Firewire 400 to Firewire 800 cable. The salesman went into the back office to look up a product code, came back, and guided me to a rack with 4 pin to 6 pin Firewire 400 cables.
So I left, went to a a computer, fired up the web browser, pointed it at Amazon, and found the cable I needed in about sixty seconds.
When I'm shopping for books, I tend to have a similar experience. I'm always surprised when local shops have the titles that I want. But what is neat, though, is that with the Amazon Marketplace, nine times out of ten, I'm buying from a small bricks and mortar shop even though I'm purchasing from the 800 pound gorilla of e-merchants. Turns out that Amazon doesn't want to stock hardbound copies of Epictetus' Handbook or Farabi's Epistle on the Intellect. But their associates, small booksellers across the county that specialize in this or that, can do so and partner with Amazon to get national exposure.
Which is to say, Amazon's "unfair" advantage with regard to sales tax is a red herring.
Amazon could collect (and pay) sales tax from consumers everywhere, but localities make it a real pain to figure out sales tax, so Amazon would inevitably get it wrong.
For example, food items are often exempt from sales tax, but the definition of exempt food items varies from place to place. Another case: Some counties, towns, and even smaller areas have additional sales taxes that go to the local government instead of the state government. Where I live, there is often a "sales tax holiday" for back-to-school supplies, but the criteria and timing for that are hard to figure out (if you buy something online that happens to be back-ordered, does the order date, the ship date, or the delivery date qualify the purchase for the sales tax holiday?).
I expect that if I worked in retail operations or any other kind of sales, I would be able to cite more examples, but those are the kind of things that complicate taxes. If all these places had a central database that retailers could query, that would (probably) make it practical to charge the right sales tax -- but they do not, and most local governments don't provide any kind of structured database with that data.
"Amazon certainly has no moral obligation to levy sales taxes if there's no direct legal obligation to do it"
Yep, that's it in a nutshell. It reminds me of a wealthy bussinessman here in Oz called Kerry Packer who was dragged in front of a senate inquiry into media ownership laws. Check out his response to one of the seantors starting from about 7:25 in this video.
And did you exchange a walk on part in the war for a lead role in a cage? - Pink Floyd.
"You get less choice when you buy stuff online" Whaaaaat?
Read the previous sentence. "So the rest of those companies go out of business..."
Government employees also have to deal with a shittier segment of the public than most businesspeople. You think it's basically the same people, but you genuinely have no idea.
If you work in the private sector (as I do) and no one has ever urinated on you at work, be thankful for your private sector job as I am.
Amazon's generating a lot of taxes revenue for those states, just not in direct sales taxes:
Amazon pays property taxes on the warehouses it owns/leases.
Amazon pays fuel taxes for the trucks it uses to cart that stuff around.
Amazon pays the employer portion of payroll taxes (state worker's compensation, employer-paid portions of state income taxes, and a host of other crazy employer-paid taxes and fees you would not believe)
Plus, there's all of the taxes the workers are paying:
The workers pay income taxes and sales taxes on day-to-day things they buy.
The workers pay property taxes on any property they own/lease.
The workers pay fuel taxes commuting to their jobs.
Yes, they are dodging some taxes (albeit, legally). It's the American way. *flag waving ensues* And they're welcome to move into my state (Michigan), employ thousands of people (directly or indirectly), and dodge sales taxes here too if they can.
Get off my lawn.
Around here, Wal-Mart, Sprint, and I think Harley-Davidson all got tax breaks for locating a "brick-and-mortar" store in this area. Something about luring businesses to stimulate the economy or employment. So they're getting tax breaks online businesses don't get.
Amazon pays property taxes on the warehouses it owns/leases.
Well, until you get into things like tax abatements, TIFs (tax increment funding), CIDs (community improvement districts) and other incentives given by local and state governments to entice businesses to locate facilities in their regions.
Here's an example; a small local community instituted a 1% sales tax on a shopping center that was being built that included a Walmart. The the tax was to pay for all the infrastructure costs surrounding the development and the Walmart parking lot. It's estimated that ALL of the city sales taxes for Walmart will take 23 years to repay the debt, but there is no guarantee that Walmart will stay that long. (two local Walmarts closed/relocated in less than 20 years) When Walmart was a year late in opening, the city had to pull money from their general fund to make the bond payment that was supposed to be paid by the sales tax revenue. This resulted in street repairs that had to be delayed for years. And this is the only Walmart I've ever seen with an entirely concrete parking lot. I suppose the city can use it for a farmer's market or something after Walmart leaves. Thus far none of the supporting businesses that Walmart was going to attract to the center have opened, 2 years later.
If a business of significant size has a choice in locating facilities, and they usually do, they won't be paying property taxes or any other local 'fees' for decades. Just look at the incentives Microsoft and Google get for their data centers. Facilities that have a very small number of employees related to the size of the facility.
Amazon pays fuel taxes for the trucks it uses to cart that stuff around.
Doubtful. More likely FedEx, UPS, and the truckload carriers pay the fuel costs.
Amazon pays the employer portion of payroll taxes (state worker's compensation, employer-paid portions of state income taxes, and a host of other crazy employer-paid taxes and fees you would not believe)
Employers pay a matching amount on FICA taxes, at a federal level. Employee's pay the full amount of any income or earnings taxes. Since companies are chartered in other, tax friendly, locations, they don't pay income taxes to local governments. Example, until recently Garmin was headquartered in Olathe KS but was incorporated in the Cayman Islands for tax purposes. (they have recently reincorporated in Switzerland)
I'll give you Worker's Compensation, but more and more often state and local taxes are being waved for companies that 'create jobs' in a region. All the tax burdens are being transferred to the employees.
Another day, another update to a Google android app.