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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."
Each state in which Amazon is located also benefits from the jobs, both direct (employed by Amazon) and indirect (e.g. transport services and power generation) which Amazon pays for. These workers in turn pay income taxes and sales taxes (when they purchase goods and services) which pay for the roads and infrastructure. Corporate and sales taxes directly paid by the company are usually not the primary means by which a company contributes to a government's tax revenues. It may well be argued that if Amazon is expected to contribute towards its consumption of infrastructure, then it should be some of its taxes back in many states.
From the article:
Then stop whining about the lack of sales taxes. The taxes should be borne by the customer of Amazon, not Amazon (at least in the states in which it does not have a physical presence and no, affiliates are not physical presence no matter how bad the states want it to be). The government knows better than to enforce those taxes upon the citizenry as it only causes a minor inconvenience on a single online retailer, 300 million people are likely to be a lot more upset.
I've always wondered why when irate brick and mortar retailers yell about an "unfair advantage" with no sales tax, they invariably fail to mention shipping costs, which don't exist for direct in-person brick and mortar store purchases. Admittedly, Amazon (for example) these days has free shipping for many orders of $25.00 or over, and intense competition over the past few years has put great pressure on all on-line retailers to not play games with charging excessive shipping fees to pad their profits, which used to be a huge problem.
Frankly, I gloat over not having to pay sales taxes (when possible). That's the free market. Amazon certainly has no moral obligation to levy sales taxes if there's no direct legal obligation to do it. It's up to the individual states to decide how badly they want to drive out business or attract it with varying tax treatment.
A truly excellent pizza parlor is a delight unto the heavens. Treasure the sauce and the toppings!
Neither Best Buy nor Amazon include sales tax in their advertised prices. Yet Amazon's (and Neweggs, and etc.) prices are typically discounted 20% or more compared to the brick and mortar stores. Even after accounting for shipping. I don't think lack of sales tax is why people pick Amazon and Newegg.
The little fact that the power to tax interstate commerce is the exclusive domain of the FEDERAL government. Not the states. That's why Amazon can skirt most state use tax laws.
I live in a state that requires me to report anything I bought outside the state or online via a USE tax. I'm waiting for someone to buy something but never use it and let the state prosecute. them. I bet that stupid voluntary use tax would be dropped post haste.
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.
And I am sure that those employees pay their federal, state and municipal taxes, as well as sales taxes on just about everything they buy... I'm sorry what was your point again?
Ahh yes, the shameless grabbing of money by idiotic governments so addicted to spending that even the bonds they issue are worth little more than junk. Shame on you. Instead of reaching your hands out for more money like spoiled children, how about making real efforts to cut spending.
There's a law of nature - the more you try to tax, the less money you actually get. People and companies eventually move - out of state, or out of country. It's a simple decision - if the cost of moving is less than the cost of taxes, we move. Careful when you raise the cost of doing business. All the rules, regulations, by laws, and other problems associated with employing people in the US is what is driving business offshore (where things are SIMPLER) to begin with. I really don't see what exactly is anchoring a global company like Amazon specifically to the US. A plunging US dollar may be "good for exports", but it means that the line in the income statement that says "Income from the USA" is actually worth less and less every year.
Seven puppies were harmed during the making of this post.
> So, is Amazon's tax-free status unfair?
Amazon.com Inc may have "tax-free status"...
Amazon.co.uk Ltd, Amazon.de GmBH and Amazon EU Sarl most assuredly do not, yet we Old Europeans still shop there.
It's about the long-tail of products in the range, not prices. A lot of the items in the Amazon catalogue aren't even available through high-street shops, so what difference would a few dollars more make?
u know unfirable state employees who get paid significantly more than private sector equivalents, retire early and have vast pensions
Conservatives love to tout this fact, but if you actually look at the reasoning behind it, it isn't that government employees are getting paid a lot more than they used to, it's that private sector wages have been slashed mercilessly in the past 30 or so years to the point that even though government employees don't make that much more, adjusted for inflation, the ratio between private to public sector salaries has fallen significantly.
Monstar L
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.
Whatever is the tax rate, we can not have one rule for one set of businesses and another for another set. Govt should not be biasing the field, it should not be picking winners and losers. By forcing off-line merchants to collect sales tax while exempting on-line retailers government is creating a non-level playing field. That is reason enough to be force the on-line guys to play by the same rules.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
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.
On the one hand, no sales tax, long waiting times, shipping fees and hassles. On the other hand, sales tax, immediate gratification, no shipping.
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.
I've lived in 5 states in the last seven years, according to Farhad, I've "enjoy[ed] the fruits of local taxes — police and fire protection, roads, hospitals, and other infrastructure that make its operations possible". Guess what, I pay those local taxes in the form of sales tax on everything I buy. I'm currently helping to prop up the state of California with my hard earned dollar (and you wouldn't believe the cut in quality of life I had to take when I was assigned here).
The argument Farhad should be making is that those states are not benefiting from sales taxes on Amazon purchases. By talking about services paid for by local taxes (not sales taxes), he's getting muddled. But let's analyse that argument too. If states are benefiting from sales taxes paid by an out-of-state customer, then they would essentially be stealing from the state that customer lives in. The money that would be collected by, for instance, Kentucky, on each sale Amazon makes is money that would have been collected in the purchaser's state had they bought locally. In fact, to boil this down to a zero sum game is stupid. I don't simply bury the money I saved from buying at Amazon. Instead, I take my wife to the movies, go out to eat, maybe invest it. Each of these activities results in a business making a profit, which means a job is created or saved (to use a completely useless metric), and someone, somewhere takes a cut of that money in taxes.
Farhad simply lacks a broader perspective. It seems he'd rather complain about a company's success than understand how that success benefits the economy as a whole, which ultimately benefits him as well.
Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.
I can't believe that nobody has mentioned this yet.
The issue at hand is taxation without representation. If California was to collect sales taxes from a retailer in Connecticut who sells remotely to Californians, then neither that retailer nor its employees would not have representation with regards to those tax laws.
The slippery slope is that California could effectively create predatory taxation on out-of-state businesses without those out-of-state businesses having any representation.
"His name was James Damore."
It's quite simple. Eliminate the state sales tax.
Yes, it means the state might have to raise any fee that doesn't already cover the cost of the government service it's supposed to pay for. And the state might also have to raise the income tax, but that's a progressive tax.
So eliminating the state sales tax will make local businesses more competitive with Internet retailers while also eliminating a regressive tax. That to me sounds like a good deal for everyone.
Any sufficiently unpopular but cohesive argument is indistinguishable from trolling.
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.
...means obeying the laws the legislators actually wrote?
Amazon refused to charge us the (so far) totally optional advertising tax that the all the other retailers in the article are charging us for. I don't know if Amazon has changed there (low/no) advertising policy since then but I don't remember ever being inundated with Amazon ads. IMO advertising is an unnecessary evil. For me, getting free shipping and fewer ads is a win-win.
We don't see the world as it is, we see it as we are.
-- Anais Nin