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Amazon Pulling Out of Texas Over $269 Million Tax Bill
ralphart writes with this excerpt from the Dallas Morning News:
"As a result of an ongoing tax dispute with Texas, Amazon.com has decided to take its ball and go home. The online retailer said Thursday that it would shutter its Irving distribution facility April 12 and cancel plans to hire as many as 1,000 additional workers rather than pay Texas what the state says is owed in uncollected sales tax. Texas wants $269 million from Seattle-based Amazon in past-due sales tax. It sent the bill to the company last October."
We've discussed the online retailer's tax battles with other states in the past.
While they're by no means the only state with budget problems, it is kind of coincidental that we're seeing this from Texas in the midst of a budget deficit. With $10 billion in lost revenue, they're starting to get creative like demanding university offer a $10k bachelors degree. Oh the abuse of the educational system, both lower and higher education. It's probably going to come down to just cuts across the board. My friends from Texas have often bragged about it but Texas doesn't have income tax so it's sort of asking a lot to do all this on 6.25% sales tax. You can make promises like "no new taxes" and "more tax cuts" but it looks like they'll run Amazon out of town on this one. Well, they were right that taxes hurt businesses! Bye bye Amazon!
My work here is dung.
87 comments on the newspaper page as of a minute or two ago.
How fast before Slashdotters push it over 200?
Even if the move out they still owe texas $269 million.
I can't blame Amazon at all for this.
This whole tax from the state it comes from/tax from the state you live in needs to be decided (federally) and set in stone once and for all. Same goes for who collects it and when.
Gone!
Good. Sales tax is a regressive tax, meaning poor people pay more than rich people. Even if you want to stick it to Amazon, in a very real way, sale tax is passed on to the consumer. The sooner we can get rid of that awful tax and move to a more equitable tax system, the better.
(Note: it is true you can soften the blow of a sales tax somewhat by exempting things like food, things that poor people buy; but then it's a hump tax, where the middle ends up paying the highest percentage. That's not equitable either).
"First they came for the slanderers and i said nothing."
All I know is my state's law (Wisconsin) - basically, with most online sales it is the burden of the purchaser to report the purchases/sales taxes of items bought on the internet at the end of the year with your state income tax filing. However, I believe if you maintain a brick & mortar business in the state then it becomes the burden of the business to file the taxes (probably because they already must pay in their state taxes).
Unfortunately, there is no good solution with state sales taxes. If you put the burden on the purchaser, then the state will have to scrutinize every citizen (which is not practical/possible) - but this problem doesn't go away if you require businesses to collect them. There are thousands of small retailers who would have to file forms with every state they sold in, and the individual states would have to scrutinize every online business for sales (also not practical/possible).
Hmmm... maybe if we did away with a sales tax and made it a disposal tax....
Amazon just out of the blue did not decide to start operations in Texas. No, they had incentives, you know like tax cuts and the like. This is not an uncommon thing. The point here is this; many states have decided to suck the dicks of companies just so they will bring "tons-o-jobs" to their area. Companies have gotten used to this notion. The fault falls squarely on the states shoulders by allowing companies to expect no taxes.
My karma is not a Chameleon.
Amazon thinks Texas is bad? Illinois is trying to get about 6 years back-taxes from online shoppers They want everyone who purchased goods in the past 6 years online to pay back-sales-taxes on those goods. How that is considered legal is amazing.
http://archive.chicagobreakingnews.com/2010/12/state-to-offer-sales-tax-amnesty-for-online-shoppers.html
The article doesn't say what the nature of the dispute is -- is Texas asking for use-tax owed by all Texas purchasers that were shipped from that warehouse? Tax for all Texas purchasers shipped from any warehouse? Tax for all purchases from that warehouse?
If they are asking for taxes owed by all Texas purchasers, I think Texas has a point -- Amazon has a presence in their state, so probably should be collecting sales tax. Though I'm sure Amazon feels differently. I thought Amazon only put distribution centers in states without a sales tax exactly for this reason.
Did Texans really purchase over $2 billion of goods from Amazon?
Why not do the same?
Another corporation that doesn't want to pay its share...
Last I checked, that makes Amazon tax evaders. They broke the law, and are now fugitives from justice. So I assume the state of Washington will be aggressively tracking them down and extraditing them to Texas for trial. Or maybe the state of New York will seize their assets on Wall St to pay the bill. Or maybe the feds will be getting involved and garnishing their profits.
Oh, wait. Sorry. That would be if a real person didn't pay a $269,000 tax bill. This is a corporation not paying a $269,000,000 tax bill, so they might get a slap on the wrist.
I am officially gone from
This is exactly the kind of behavior that I thought the Obama administration was going to crack down on. Business using shelters and practices to avoid fairly contributing their taxes. I'll be interested to see if this gets any traction with the administration since I personally believe this is one of the biggest economic failures in America.
one thing the article fails to mention is if the taxes Amazon owes are for purchases made that were within state lines. That large figure could mean across the state, in which Amazon does not have to pay that at all and this is all sensationalist news.
Take for example, Newegg.com. I have a friend who pays sales tax when he buys something from newegg because he lives in Tennessee. And i know another person who pays sales tax because they live in California. So, if Amazon has a distribution center in Texas, then they have to pay sales tax for purchases made within the state!
If I buy from tigerdirect, I pay sales tax because their HQ is located in Miami, FL.
You got it wrong.... sales taxes are the only legitimate tax since it is broad based, not avoidable, and needs no IRS and no government intrusion into personal privacy.
You can completely exempt all sales taxes on the poor by a prebate of the amount of sales tax up to the poverty line to everyone, so no one pays sales taxes on the basic necessities.
It is the Fair Tax -- fairtax.org.
With millions being added to the US debt in minutes now I wonder how long it will take for foreign countries to stop extending credit. Will it be when the debt to gdp ratio reaches over 100% (it's currently 97%) meaning we have about as much debt as product. US governments at all levels are currently bankrupt and it's companies like Amazon, Google and others that are the only thing that's left of the US, they can basically foreclose and take over the US government unpunished.
Custom electronics and digital signage for your business: www.evcircuits.com
... a mayor is tearing apart a freshly printed out budget report.
This is great news for local business. The massive advantage that online retailers get for being able to get by not charging sales tax needs to end. Most consumers are too short-sighted, and too greedy to consider that when they buy online, they're short-changing their own community. Let's hope there's a blanket solution from the federal government in the works to permanently solve this very real issue.
I don't respond to AC's.
I can't imagine people read too many books in that state anyway.
Does this mean Woot is pulling out of TX too?
Well I for one applaud Amazon for sticking with their position. In states where there are burdensome taxes laws (Ohio I'm looking at you where every county / intersection has different tax rates) its just the state putting the labor/effort for taxes on the business owner. So I have to staff additional people just to keep up with the additional tax laws, rates, and changes - how does this bring value to my company or customers? It doesn't - I have to raise my prices to cover the overhead. I'd be lying if I said I didn't want to leave the states where I'm having to spend so much time/effort collecting taxes and providing audits and proof that I've collected taxes from individuals to the state/county. Its also not exactly fun arguing with my customers why they should be paying the taxes or tax rate (some are for profit some are not).
Amazon continues to appeal the tax bill through an administrative process, Spelce said, “and it’s going to be a while” before a decision and potential appeals are completed.
Texas courted them with tax breaks and such and then all of a sudden they changed their mind and handed over a huge bill. Of course Amazon is going to contest it. If the court decides that they owe the money, then they will pay, but it will also be the last sales tax they ever pay to Texas.
Thanks for sharing your nuanced, informed take on the matter. I'm sure you live in Utopia.
This just shows that more tax cuts for the rich and above is needed, we can't let them pay like poor people! Oh the horror for an equal free and fair society! We need less gavurnament intervention! Let the free market decide!
Maybe its time to make these sort of companies pay what is due like anyone else following the law or nationalise them and remove the business licenses from the group involved and re-sell them if it makes sense.
Seems like Texas would make more in the long run in property tax and taxes from the stuff the 1,000+ employees would be buying.
Seems like in the long term Texas would make more money by having Amazon there then chasing them out.
I can only see Amazon growing and as it grows they will open more which means more employment for Texas residents.
The insistence on doing this is just a bad long term decision on Texas's part.
Section 9: "No Tax or Duty shall be laid on Articles exported from any State." Are these taxes Texas wants to collect on stuff that Amazon exported to another state?
Pay your fucking fair share, assholes!
---Technology will liberate us if it doesn't enslave us first.
The only state that's NOT having budget problems is North Dakota. Ellen Brown says North Dakota is sitting pretty because they own the Bank of North Dakota.
See How the Nation’s Only State-Owned Bank Became the Envy of Wall Street.
All the other states are slaves to their financiers on Wall Street. For example, the City of Phoenix (Arizona) borrowed a billion dollars over the past 5 years to build out the water system. Now the water department wants to raise an extra $24million a year by raising water fees... 'Cause the usury always gets paid first.
I calculate that the interest charge on a billion dollars a year (at 5%) is $50million. If Arizona owned a bank like North Dakota, the Bank of Arizona would have financed the Phoenix water expansion (at, say, 3%). Most of the $50million the city is now bleeding out to Wall Street would instead be flowing into the state's treasury.
The financial crisis is easily fixable, with the right solutions. Money and the Crisis of Civilization, and ... Richard Clark's A Bailout for the People are also on my recommended reading list.
Learn the rules so you know how to break them properly.
www.teslabox.com
We don't have any sales tax here, and we need the jobs! Where would you like to build your new warehouse, right next to PDX? We'll make it happen.
Dear Texas, does the phrase "Aim at foot. Pull Trigger." mean anything to you?
I've abandoned my search for truth; now I'm just looking for some useful delusions.
Care to state an example of a "whacked out law"? Oh, that's right you're just blowing smoke up everyone's ass pretending like you know anything about Texas or our laws.
You can completely exempt all sales taxes on the poor by a prebate of the amount of sales tax up to the poverty line to everyone, so no one pays sales taxes on the basic necessities
OK, you are obviously blind-mentally since you didn't see where I addressed this point in my first post, but if you set up sales tax this way, inevitably the middle class ends up paying the highest percentage of their income as taxes. How is that fair? A real fair tax is built in such a way that the wealthy pay the same or a higher percentage of their income.
Some fairtax schemes are really fair. Abolishing income tax and replacing it with sales tax is a scheme by unscrupulous rich people to reduce their taxes under the name of fair. Also, if you think using sales tax will get rid of the IRS, you are ignorant. That's like saying, since our taxes are deducted automatically from our paycheck, we have no need of the IRS. No, the IRS will always be there.
"First they came for the slanderers and i said nothing."
If you believe that, I've got a bridge I'd like to sell you. A sales tax in excess of 20% would kill the economy. That's not something which I say lightly. Taxing consumption by that much in what's become a consumer oriented country isn't good at all. And it's rather perverse to put up that amount of tax on something that you're trying to encourage.
[citation needed]
Future events such as these may affect you in the future!
They way that sales taxes are collected are really a pain for any online business.
The sales tax varies not just state by state but even county by county. And for an online order where to you charge from? I work in one county and live in another. I if I buy something online at my office do they charge the sales tax of the place where I order or where it is delivered to?
What about when I use my cell phone and I am on vacation and I buy an app or a song?
Should it use the GPS and decide?
If I buy a gift for my mother in law from Amazon should I pay Florida or Texas sales tax?
Sales tax and online sales just don't work well. And if it is a pain for someone like Amazon which probably could deal with it but a nightmare for any small company trying to do business on the internet.
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
Amazon has a huge facility in Delaware now, where there IS no sales tax. Maybe this will get them to expand it. (Sales tax is unlikely ever in Delaware because the surrounding states have such tax, and lack of such is a draw for merchants in Delaware. Everyone realizes that putting in even a small sales tax would mean many of those businesses would move elsewhere or fail.
I suspect he's referring to the fact that patent trolls always seem to file in East Texas.
XML is a known as a key material required to create SMD: Software of Mass Destruction
Political corruption and whacked out laws are a very good reason for avoiding Texas either for businesses or for people.
If your business lacks a storefront or warehouse in Texas, does "avoiding Texas" include not even shipping to Texas?
State your sources and examples. From here it looks like California is the state of poorly thought out public policy
"Yeah, f*** those corporations! Right on! Tax those greedy assholes right into the ground! Also, do you have any jobs? I can't seem to find anyone hiring . . ."
The dispute apparently is about unpaid taxes on retail sales in the state, and Amazon claimed $34 billion in sales last year, so it's very possible that between 2005 and 2009 the company did $2 billion in sales in the state.
It sounds like both sides aren't playing nice in this. In my state of North Carolina, Amazon has been very accommodating about paying up retail taxes from the same period (they have had a dispute with our state about maintaining customer privacy in the audit however). Amazon's dispute with Texas is that they want to see the audit that produced the final back-tax figure, which Texas has not done or has refused to produce.
i ~ Celebrating Science, Cyberspace, Speculation
They have a fulfillment center in Texas. The fulfillment centers are an entirely separate corporation. They don't sell you anything, they just ship you goods from the place you purchased.
Is it a loop hole? Yes, but why single Amazon out? Close the loop hole, then we can talk. Until then, Texas just lost a lot of other tax money and jobs by illegally demanding payment of taxes. It's illegal because of the loop hole.
Sales tax is a regressive tax, meaning poor people pay more than rich people.
Isn't it interesting though, when I'm running through my working class neighborhood (houses +/- $120K), I constantly see boxes on the side of the road for pickup that was for: big screen tvs, gaming consoles, high end stereos, and I see luxury cars in their driveways (all luxury cars are a waste of money - no exceptions).
I think sales taxes on consumption is good for poor and working class people because we have a tendency to blow our money on shit.
Too bad George Sr. didn't.
Nice Stuff on this Site. Many greetings to Damenjeans
PeeTardiers
You realize anyone with more than an ounce of intellect will hit this word and just stop reading, and assume everything else you have to say will be also be on the level of a mentally challenged toddler?
Texas was trying to collect tax from *before* Amazon was in the state. You don't even grasp a single molecule of the basic parameters of the issue. You're just a blithering ideologue who needs mental counseling.
Congress has debated how to solve the problem of interstate sales taxes. One idea would be a federal sales tax on consumption (VAT) but that would have to be a replacement for part of the federal income tax and still wouldn't solve the states issues. I think that states should NOT be allowed to collect taxes on inter-state commerce unless ALL states had the SAME rate of sales tax. But do you want a federal department to collect this for the states (you'd have to split the tax between the states where the sale was made and where the goods were delivered)?
Sales taxes are regressive and hurt the lowest income consumers the most. Income taxes are progressive and bite the highest incomes the most.
Texas doesn't want those Seattle liberals doing business in their state anyway.
They carry all sorts of nonsense they fly in the face of the creationist agenda. Everybody of any consequence in Texas knows that God created around 6000 years ago, and to say otherwise is heresy, unpatriotic, unchristian, and downright untexan.
If someone is passing you on the right, you are an asshole for driving in the wrong lane.
You have a physical presence in the state you pay sales tax.
Because consumers don't buy anything at an Amazon warehouse?
I know you say Dell does this but I don't see why this is required.
I hope Texas enjoys the lost revenues and the lost jobs. Perhaps Wyoming will be the new growth center for the U.S.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
And States do what they can to attract corporations not merely because of whatever tax revenue they can bring in but all the other things they bring. Corporations draw in an educated labor pool. That means more people spending money locally, paying taxes and generally improving the quality of life. And the fact is, for a lot of companies setting up a corporate office is a big commitment, so usually they're in it for the long haul.
A perfect case study is the city where I live. All the neighboring cities are booming because they keep attracting companies. My city despite being centrally located for a lot of people has struggled for years because of ineptitude and corruption. They proclaim victory every time some second-rate retailer or some small-time industrial company opens up shop. But all they do is keep drawing from the same unskilled labor and keep getting screwed when many of these businesses fold or move out within a few years.
So there's a real incentive to keep Amazon around.
I find it amusing that there are those claiming Amazon hasn't paid it's share when it's us, the consumers, who have benefited from this. No one who's bought anything on Amazon has had to pay sales tax. However, if states force Amazon into paying sales taxes then rest assured we will be the ones paying them, not Amazon. The only expense Amazon will incur is from the extra work involved in handling sales tax. It's not like we're talking about tax dodging here; if that had been the case I'd be totally behind screwing them to the fullest extent of the law.
Amazon's prices have been going up for a few years now and in many cases they aren't much better than retail. Outside of hard-to-find items a sales tax would erase any real advantage they currently enjoy.
I can appreciate the value sales taxes provide. However, States also love to device all kinds of schemes to squeeze a bit more money from individuals and businesses. Back when I had my own business I got to learn about the world of charging sales tax for services. It was completely arbitrary what was assessed sales tax and what wasn't. It was very clear that certain industries were able to successfully lobby for no sales tax.
Umm, you've got a bit of a problem. The wealthy don't make their money through income. They make it through dividends, and business income, where they do not pay the 15% to social security, and all their expenses are pre-tax. The national sales tax would avoid this issue as all consumption would get taxed and the wealthy actually would pay a share, unlike now where their share is pathetically low.
Those who pay the most are high wage earners, like athletes, doctors, lawyers and the such. I do not consider those people wealthy as most of them still have to work to maintain their standard of living.
So Linus, what are we going to do tonight?
The same thing we do every night Tux. Try to take over the world!
“Amazon.com was asked to play by the same rules and has responded by eliminating hundreds of Texas jobs,” said Danny Diaz, a spokesman for the Alliance for Main Street Fairness in Washington, D.C. “Amazon could have chosen to collect the sales tax as Texas retailers do, but instead they opted to protect their special sales tax loophole to the detriment of hardworking families.”
Yes, the same families who would have been paying that sales tax in the first place.
Completely Fair tax argues a couple things.
1) Consumption tax is the least damaging tax for the economy (Capitol Gains is the most), this is part of the justification for what some may call a less fair tax.
2) Existing fortunes will be taxed (this could be called double taxing I suppose)
3) the rich already pay lower taxes, as they earn their money through capitol gains.
I would personally support it if I didn't think it would open up a huge black market (they are talking about what we think of as a 30% sales tax).
I also suspect there will be loopholes to buy an extraordinary yacht and keep it somewhere else most of the time, killing the argument that at least the rich are getting taxed more than they do now.
Things I like about completely fair tax are:
1) prebates allow thrifty poor to have capitol once a year, and perhaps start a small business. Basic landscaping equipment could be withing the reach of many hard-working poor.
2) Every extra dollar earned is kept. The marginal benefit of an extra hour of work never goes down, and if it is savings, it actually goes up vs the base 40
3) less costly to keep tract of, this is an overall boost to the economy, small, but probably in the billions saved on broken windows
4) The most beneficial forms of spending are tax free.
It should also help skew the economy towards one with a savings rate by taxing spending, this is important in the US at the very least (other companies could be argued to have too high a savings rate, and taxing consumption could make things worse, though the early predictions I heard about the risk of a high savings rate in early '09 did not pan out).
Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
Oregon does not have sales tax. They do have an inventory tax. The inventory tax is not only on your product, but on your furnishings and equipment. States to provide incentives to attract businesses. A couple of the largest businesses in the state are Nike and Intel. Nike distributes shoes mostly made overseas. Their inventory is relatively low and their inventory value is relatively low.
On the other hand, Intel does manufacturing in Oregon as well as a good portion of R & D. If Intel was taxed at the same rate for inventory as Nike, they would not be in Oregon at all. The equipment for manufacturing IC's is several million dollars each. Intel negotiates with Oregon for a break on the inventory tax and brings to the table the rates they pay on other locations such as New Mexico, Ireland, Israel, etc. Oregon is well aware if they didn't offer this incentive, Intel would no longer be in Oregon.
http://www.oregonlive.com/opinion/index.ssf/2010/10/oregon_intel_inside.html
Oregon is well aware that Intel contributes way more to the state of Oregon than Nike. Trying to "Tax them fairly" will result in the loss of Intel in Oregon. Intel is by no means getting no taxes. Intel contributes heavily to the local infrastructure and education.
It sounds to me like Texas has attracted Amazon with a temporary deal and it has expired. Amazon has not been able to extend the deal. Now the party is over.
Amazon may owe Texas a quarter billion dollars, but this is the last year. They are not remaining as Texas expected them to.
Texas expected they were too big to fail. Surprise..
The truth shall set you free!
TX Gov. Rick Perry wants to succeed anyway. The state he bragged (a typical texas behavior, I know, was born and raised there but I got out) was doing so well.
If Texas succeeds the U.S. will save a lot of money after we close the ~15 military bases there, rescind the federal subsidies going to (partial list to make the point): the oil drilling/wells/pumping, processing facilities, natural gas facilities, major airline hubs, highways and roads!, schools, universities and colleges, and god knows what else.
Corporations are greedy. Amazon should buck up, pay the stupid tax and find another way to play after that.
No, you simply don't tax basic necessities. You don't tax utilities, food, and public transit. Things people need to function in modern society, and take part in democracy/government.
You sales tax everything else, and things with a social cost, like drugs and alcohol more.
(I would also argue luxuries at a higher rate, but that's the commie in me.)
I'm sure the current House of Reps will get right on that - after they ensure every poor person in the US is killed by policy and budget.
Or do they?
Sales tax: 6.5%
tax owed: 269000000
Meaning gross sales = 269000000 / 0.065
Equals: 4.138 billion
Has Amazon really sold 4 Billion dollars of stuff to texans? Seems wrong to me
Our savings rate was negative, and is still very low.
We have a weak pension system to boot.
Consumption needs to be discouraged. Though I agree 20% would be terrible.
I'd like to see future tax increases (and there will be some, as we under-collect buy something like 30%) in the form of a VAT, with a refundable income tax credit to make it not hit those under the poverty line.
Something like 3% VAT, with $500 per a dependent (a somewhat generous 15k * .03).
Or even boil the frog, and do it 1% or .5%/year until it hits 3-5%. I don't think it wants to go too much past 5%, as this starts getting the total up around 10-15% in some states.
People need to save some more and spend some less. The trade deficit will not be supported by lending and investment forever.
Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
By most First World democracies standards: the use and application of the death penalty is a great example.
Utah runs with no deficit as well. There are 4 or 5 states who run in the black. Perhaps the other states should see how they run things?
Just a bunch of steers and queers.
Which is why Congress won't go for a national sales / consumption tax in place of an income tax. With an income tax they can carve out little rules and such to support all their big donors. All those 100k lobbyist aren't up there to tell Congress what a good job they are doing, they are there to either get money directly out of our pockets or to avoid paying into that pocket.
A sales tax can be used to great effect to tax those dodging the system through income tax loopholes.
All you need to do is figure how much sales tax a family living at the poverty level (you can place it above the poverty level to provide even more buffer) and then refund that proactively to everyone in the taxing district. With the computer power today it would not be a big deal. So say the government determines that the first 10k you spend yearly should be tax free, well they can refund the $500 you would have to pay through debit cards or direct deposit and in worst case a check. Beyond that and you don't get a refund.
I know, but what if Mr. Big Shot buys something out state. Well if he keeps it out then its up to the locality where its located.
Yes I know about the fair tax, the flat tax, and others. Sales taxes are only regressive because we don't connect all the payouts to the poor that have to be made through other programs to make up for taking it from them on the front end. It all is so the big guys can play funny with taxes.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
You made the assertion, "the middle class ends up paying the highest percentage of their income as taxes." Therefore, the burden of truth lies with you. Also, no ad hominems allowed.
Gamingmuseum.com: Give your 3D accelerator a rest.
If I pay ten times what you pay in taxes:
Will the army defend me from invasion ten times as hard?
Will the roads I use get ten times as much service?
While the very rich can lobby the government to get a disproportionate cut of taxed benefits, that is not a direct consequence of the taxes they pay, but instead is a consequence of political corruption.
If I do not get anything more for my taxes, why should I pay more than you do?
Why should I pay even a percentage of my income as opposed to a flat rate?
It is not at all fair to charge some people more for the same service.
If I wanted to charge more for my services when bought by a protected minority I would end up in jail.
Why should the government be entitled to more money from me just because I happen to have more?
A few statistics: (according to 2005 IRS tax data)
The top 1% of wage earners pay 39% of all collected income taxes
The top 25% of wage earners pay 86% of all collected income taxes
The top 50% of wage earners pay 97% of all collected income taxes
This is hardly fair unless you believe that the rich only have money because they took it unfairly from those with less.
I personally believe that the poor only stay that way because of poor fiscal decisions and the rich mostly get that way by wise fiscal decisions and hard work.
Your intention to take more(aka punish) those that make wise fiscal decisions will only encourage more people to make poor fiscal decisions and thus make more people poor. If you want to encourage more people to demonstrate fiscal responsibility, then the logical method would be to punish poor fiscal decisions, not reward them.
Anytime I've ever tried to pull out to prevent problems it hasn't worked out well for me.
that said, I have some sympathy for them.
My firm was selling goods to a prospering customer.
My customer's biz was going well, so we started stocking goods locally so that we could cope with sudden spikes in demand without running our customer out of stock.
Fast forward a year.
We suddenly start getting TAX bills and inquiries from the city we'd happened to end up warehousing in. It seems that they have a little clause in their city code that allows them to tax goods stored in their jurisdiction, even if those goods are ultimately moving onward for delivery elsewhere.
Even dumber, the calculation was based on what was stocked in the property Jan 1. (Yes, if we'd moved it all into trucks, and parked them in the lot that day, we'd have completely avoided the tax.) The warehouse firm I was using was also apparently surprised at this little clause...they fear that once news of it gets out, they may lose every customer they have.
In my view, this is absurd. This is tantamount to every little burgh on the highway asserting that they can tax the value of goods sitting in trucks as they roll past on the highway.
So we negotiated a settlement with the city, paid it, and immediately moved our warehousing 2 counties over, giving THEM the jobs, business, and economic benefit of our ongoing need for storage. That first place we were will never, ever see our business again. I've told this story as widely as possible, to warn others in the same situation.
WELL DONE, CITY COUNCIL OF SAVANNAH GEORGIA!
... was Texas making off payroll taxes from the Texans who *were* employed, but are no longer? Probably not even close to the supposed sales tax bill, but hey, zero sources of $270-million income are always better than 1000 sources of *any* income, right?
MSIE: The world's most standards-complaint web browser.
The tax Texas want's is for good sold to people in Texas, not other states.
The Kruger Dunning explains most post on
...at 6.25% sales tax rate, that would mean that Texas believes Amazon made some $4.5 Billion (with a 'B' ) in sales from Texas to Texans,
I would propose that Texas state is rather overestimating their presence in the overall scheme of things.
I'm with Texas on this one.
Gah! Those words taste bad! ;-)
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
You can completely exempt all sales taxes on the poor by a prebate of the amount of sales tax up to the poverty line to everyone, so no one pays sales taxes on the basic necessities.
It took me a lot of thinking to come around to the idea of a prebate being a good idea. As a check from the government, it echoed in my mind with the concept of "welfare check" with all its attendant welfare state issues. I had to work through the process of realizing that a prebate, like an income tax refund, is just giving people back their own money that was taken in the form of a tax, rather than giving them someone else's money that was redistributed through taxation. All you're doing with the prebate is acknowledging that there is a minimum level of living below which it is just plain immoral to tax. And since everyone gets the prebate, it is agnostic to income level in that everybody, whether wealthy or poor, gets a pass from taxation on basic necessities. I really like the fairtax.org idea but I doubt it will ever get passed in the US. Far too many monied and powerful interests like the current broken system for the ways in which it can be manipulated.
Along these same lines, Amazon is opening new distribution facilities in TN near Chattanooga and are trying to avoid having to collect tax from TN residents. They are claiming that the center is just for distribution, that the actual sale takes place elsewhere. It will be interesting to see if the state goes along with this definition of a business presence since the new centers are expected to bring in 1,500 jobs or so. New Egg also has a distribution facility near Memphis and they have to collect tax, so I have to wonder what kind of outcry other distributors will raise if Amazon is allowed to avoid collecting taxes.
The timing of collection is irrelevant. If I have to pay, and you have to pay, they should have to pay. The fight seems to be over loopholes/kickbacks they felt entitled to use.
Sounds like IL is using the same method that other states have used -- make it the buyers responsibility to own up to their unpaid taxes. I'm not sure why you would think the legality here is questionable.
This system actually benefits Amazon, and e-commerce in general. They don't have to deal with the pesky accounting of calculating, collecting and remitting local sales-taxes. Under such a system, Texas would be going after Texans who are evading taxes to fill the hole in the Texas budget. Perfectly fair. Moreover, they would keep jobs (and income tax revenue) in Texas.
The problem here is consumers who ignore the law, period. If you owe sales taxes, pay them. Forcing the government to come after you only wastes money and drives up the amount you owe.
The corporation isn't expected to pay a nickel of that tax. They just can't be arsed to collect it and send a check. If the corner bodega can muster it, I'd think they could manage.
Another comment on Intel is that Oregon has a relatively high income tax of 9%. Most Intel employees are well compensated. One could argue that the tax burden shifted from Intel to its employees. Washington county where Intel is located at one point considered increasing the property taxes by not renewing a tax abatement, the state intervened and brokered a deal to give the county more money to renew the property tax discount. During this time it was estimated that the income taxes generated by Intel employees accounted for 15% of the state's total tax revenue (unfortunately I can't source it)! If Intel were to leave, the state of Oregon would be in significant trouble.
"the vast majority saved their money instead of spending it, and invested it"
Nonsense. The vast majority either inherited it, or gained it through some means of exploitation of the very same "poor people" you are deriding through your naive comments.
Note that I am NOT supporting the GP and his/her position regarding taxation, only pointing out your error. My own view on taxation involves the wholesale removal of the sales tax entirely, in place of an earnings tax (note I said earnings, not just income).
Opinion:=TMyOpinion.Create(Me);
I'm sure I'll be a minority here, but I strongly believe that Congress should change the system. It should always be the responsibility of the retailer to collect and pay the tax to the State, even if the sale is across state borders (which is why Congress needs to get involved - cross-state-lines commerce).
The situation as is, is a ridiculous race to the bottom: Amazon operates in my state, so I'll buy from Newegg. Newegg operates in my state, so I'll buy from Best Buy. I'm supposed to pay taxes for online purchases, but who remembers in April what they bought online in January of previous year?!
Such a change would decrease transportation costs for online purchases (warehouses in any and all states that have a big enough market), increase local jobs (more people would go to their B&M stores and buy things so you need sales staff, plus warehouse jobs), bring more money to the states (which are bleeding almost uniformly) and make the market in a state more uniform (no penalty for having an office, warehouse, or B&M store in one state or another).
The retailers might complain about having to collect taxes, etc, but if it is too difficult for them to collect tax for a particular state, they are free to not ship to that state.
It is time to straighted out the whole sales tax situation. And yes, I am an eastern, over-educated, arugula-eating elitist.
Mike_K
"Society owes no one anything"
Then want exactly is the point of Society? Why not just pure anarchy? How about you read the definition of Society before you go about casting aspersions without credence. If you are a contributing member of a Society, then that Society DOES owe you something.
Oh you like police protection? How do we pay them? Oh you benefited from that low-interest government subsidized loan to start your business? How did that loan subsidization occur?
The truth is that Society implies a mutually beneficial relationship between its membership. Why not come down from your horse and realize that even you in your, I'm sure, masterful march to success had at one point relied on Society for one thing or another.
Opinion:=TMyOpinion.Create(Me);
Debt to GDP is like comparing what you owe Vs your income. If 100% debt to income was the bankrupcy limit, most people would become eligible by buying a car. What is important is Debt service Vs gov't budget aka payment Vs income. As long as the government has enough money coming in to pay it's interest and capital, it's still OK.
Still, it's always better to owe less (or nothing at all). Perpetual war is a costly venture, and the US decided to finance by credit instead of keeping it to avaliable funds.
You're not old until regret takes the place of your dreams.
A sales tax in excess of 20% would kill the economy.
It would kill the legal economy. The shadow economy would blossom. Say I'm a widget vendor, and the tax is 20%. You want to buy a widget. So I tell you, "Sure, hedwards, tell you what: if you pay cash, I'll only charge you 10% tax." I then, of course, keep no record of the transaction and pocket the 10%. Calls for some creative bookkeeping, but nothing out of the ordinary as these things go.
Considering Amazon's response was 'we were going to spend 10s of millions and hire 1000 people' ... I'm pretty sure the 269 million is far more beneficial than a new building and insignificant reduction in unemployment claims that Amazon is trying to use as a negotiating point.
Eventually every state will force them to pay and they'll have no where to run and it'll be over.
Right now, states simply haven't adjusted to the Internet business model. They will, and you want them too, unless you don't like the infrastructure your state provides.
Persistent Volume manager for Kubernetes - https://github.com/dwimsey/openshift-pvmanager
You sales tax everything else, and things with a social cost, like drugs and alcohol more.
And the government then has a fairly high monetary interest in ensuring that people continue to consume lots of those things.
Sort of like the traffic light cams... no matter how well-founded some of the intentions may have been, it's just another piggy-bank by the time it gets to the politicians, and they squeal if it starts running dry. Oh my gawd, people aren't smoking as much as they used to... and then they just have to raise taxes on everyone else to try to get that money, which their budget has grown to depend on.
Taxation is habit-forming.
Comment removed based on user account deletion
Oregon is well aware that Intel contributes way more to the state of Oregon than Nike. Trying to "Tax them fairly" will result in the loss of Intel in Oregon. Intel is by no means getting no taxes. Intel contributes heavily to the local infrastructure and education.
Maybe, just maybe, the Glorious State of Oregon should just get rid of stupid taxes and replace them with more sensible ones. Applying taxes fairly is in our best interest because I'm pretty sure we couldn't negotiate with the state to lower our taxes.
If applying a tax lawfully, equally and fairly leads to disastrous outcomes then you should get rid of the tax and pass a new one.
Don't think of it as a flame---it's more like an argument that does 3d6 fire damage
The front matter of an old Sears Roebuck catalog clearly states their business model and how they are able to deliver products throughout the country for competitive prices. It is exactly the same as for online retailers today. Nowhere in the catalog is taxation mentioned. The states new enough not to try to violate the constitution with illegal taxation 100+ years ago. They need to be reminded of the same today.
I am becoming gerund, destroyer of verbs.
Because what Texas is trying to do is pretty clearly NOT against the law. Texas's claim is that Amazon's warehouse operation constitutes a physical presence in the state, which seems pretty uncontroversial. Amazon's claim is that the warehouse doesn't belong to them, it belongs to... their wholly owned subsidiary. It's ludicrous.
Doesn't the "It's an independent distribution center, it's not us" argument go like this?
* When we ship by UPS, despite UPS having a physical presence in each state, that's them, not us. Note this doesn't change if the merchandise sits in a UPS warehouse while in transit, either.
* When we arrange for a wholesaler to drop ship (directly ship to the customer) the customer's purchase from us, that's the wholesaler, not us, who has a presence in the customer's state, not us.
* So the general rule is: Sales are attributable to the location of the sales office, not to the location of wholesalers, shippers, or warehousers, when they are separate firms from us.
Seems like a decent argument, just if the center in Texas is no more owned by Amazon than UPS is. Of that, I've no idea. The story reads like it's Amazon's decision to remove the center, which would make it theirs. Maybe that's wrong, maybe they just won't give it their business any more. That would be equivalent to choosing FedEx - there should be no sales tax consequences.
"with their freedom lost all virtue lose" - Milton
... you mean "the special tax deal expired, and now Texas wants them to pay what they owe", then you'd be correct.
They spend money like drunken sailors and need more cash to pay for their "I am better than you." lifestyles.
I guess they can always raise taxes by 67%!!!!
I mean everyone is too Snookie Stupid and wondering about Lindsay Lohan's trial date to give a sh*t!
I wonder if Texas government people hang out with Illinois government people?
-Hack
Got Geometrodynamics? Awe, too hard to figure out? Too bad.
Minding the federal government's business. Which does not include collecting state taxes.
Have you checked the interest rates on Treasury securities lately? The US government is borrowing money at interest rates barely above zero... which means the bond markets think this is the safest possible investment they can make. If the bond markets were demanding huge interest rates, that would be one thing... but they're not. And that means no one thinks the US government is teetering on the brink of bankruptcy.
The Facts:
Texas has no income tax, but it does have sales tax.
If Amazon moves out of state, taking jobs with it...this has a minimum impact on Texas' bottom line. Texas would only be making money off of Amazon employees who buy goods. They don't actually directly make tax money from employees working in Texas.
Amazon could move their operations to a neighboring state that might let them pull this tax trick, but those states have income tax and would be glad to have the jobs.
Texas is sending a message that it will not allow companies to skirt their tax obligations. Corporations love locations in Texas because of the lack of income tax. Texas also has fairly limited Franchise tax. Amazon is losing in this scenario. They will be paying more money in another state(employee income tax) and most states will require them to pay sales tax(unless they move to a state without sales tax).
This is really just Amazon trying to cheat the system.
My understanding is that it doesn't matter if your facility has anything to do with making the sale or not. If you have a physical presence in the state, you must collect the tax. But then IANAL.
That closing down its Texas business in the future doesn't affect the taxes it already owes the state, right? Unless tax law and jurisdiction works really strangely in the US, Texas would have no trouble making this a federal matter...
They might. When I buy a £100 pair of trail running shoes, they last until the sole wears through - but cheaper shoes I've had in the past have sometimes only lasted a few weeks. I'm sure this applies to more than just shoes. When you can afford quality products, you don't have to buy stuff so often. Being rich means you can buy stuff more often if you wish to of course, but then again, I'm sure some rich people are now rich because they have saved, then invested wisely.
Hey Mr. Runner man, did you hurt yourself with the stretch in logic? I am baffled by your reasoning. If a person makes $30,000 they likely spend about every penny they make on shoes or whatever, To keep it simple, if the sales tax rate was 10% they would pay 3,000 in taxes. Now a rich person. They make $100,000 per year and spend 90% of it (and that is conservative). That means they pay $9,000 in taxes. There is no way you as a poor runner can spend as much as the average rich person. No way.
no comment
Internet commerce does not require a separate set of laws. The State had no mechanism for collecting the taxes in place, and probably thought they weren't worth going after. Now on-line commerce has exploded along with budget deficits, so they have deemed it worth going after, and here we are.
In every state I have lived in since I started buying things on line, a "Use Tax" line has appeared on forms along with instructions to calculate and pay taxes owed that were not collected by sellers (of any kind).
Sales taxes were always a part of the law, and technically you should have paid them regardless of whether the usual convenient methods of doing so were in place.
So when a government suggests that perhaps a tax-evader should maybe, pay their back taxes, the appropriate answer is, "fuck you I'm going somewhere else"? What kind of shitty, backwoods county do we live in? I hope the decision makers at Amazon are arrested and tried for tax evasion and coercion.
Say, how much is that bridge?
Just that the UK has a 20% VAT rate right now. VAT is a sales tax.
So your argument is that it's OK to give a break to Intel, yet at the same time fair to tax Nike, which seems to have found a loop hole by outsourcing labor.
Accumulating capitol... machines, wealth, knowledge, should never be taxed, since those are the tools needed to create products and services. Tax the end goal, the profits.
Getting the Federal government involved is a stupid idea and you have no idea how complex sales tax is.
The stupidity is in thinking that a multitude of different sales tax systems in a single nation can be anything but grossly inefficient. Australia (a federation of states) had exactly the same problem with similar loop holes and headaches for business. The cure (in a nutshell) was for all state sales taxes to be replaced by a single federal sales tax (10% GST) which is then divided up and given back to the states via a formula negotiated between the states. To implement this system all of the states had to agree to cead their constitutional power to collect sales tax to the feds. It would never work in the US because a large proportion of the states ( and Fox news) would brand it as communisim, a federal power grab, or both.
And did you exchange a walk on part in the war for a lead role in a cage? - Pink Floyd.
I am strongly opposed to the idea floating around of making all online retailers collect taxes in all states. Buying things online is, in and of itself, better for the economy and the environment than buying them in a brick an mortar store, it is significantly less expensive and wasteful. If we are going to consolidate the system, level the playing field, then all online purchases should be tax-free. Let the states raise money through some other means (income tax, property tax, etc.).
--The universe will not be altered by forum threads, even those which are very wry. --Tycho Brahe (Penny Arcade)
Not if they quit taking a third of everyone's paychecks.
There's nowhere to hide.
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
Perry is only into politics to make his friends rich. Over the past 10 years the only time he seems to be awake and active is when he is seeking a deal which enriches his buddies. Examples include the Trans Texas corridor. If you were to get rid of his pork, there would be more monies. Lloyd Doggett tried to get him to stop that with Education spending by putting in a rider which would have kept him from swapping out what the State should be paying for Education with the Federal monies and using that money on other projects that benefit his friends. The whole point of the Federal money is to extend, not replace the state obligation.
I do agree with you that the Republicans are definitely into Socialism - Corporate Welfare is their stock and trade.
Oregon does not have sales tax. They do have an inventory tax. The inventory tax is not only on your product, but on your furnishings and equipment.
That's not an inventory tax (there isn't one, see ORS 307.400) but business personal property tax. I think that all of the 4 states I've done business in have that tax.
I think it's pretty safe to say this is one of the largest bonehead moves this state has made recently!!! As a born and bred Texan, I say "Amazon, tell the state comptroller and Perry to shove it up their asses". We will still all continue to shop on Amazon and Perry and the SC can go to hell. Until these morons who were voted in are actually held accountable for our money they are spending, they shouldn't throw stones! Their glass house will eventually come crashing down slicing them to bits as it does! Perry, GWB, etc all make it embarrassing to say that we are Texans. It used to be something I said with pride. Not so much anymore!
Borders bookstore to file for bankruptcy.
Jobs at stake: 19,000
Amazon to close Irving,TX distribution center.
Jobs lost: 119
Does anyone connect the dots ?
Borders, like bookstores everywhere, have been facing the sales tax headwind as a competitive handicap for years vs. Amazon.
In contrast to the aggressive unethical tactics by Amazon, it is interesting to note that the much vilified WalMart collects sales tax on online sales even to states where it does not have a physical presence.
I think the only way to deal with internet sales and sales tax is at the federal level. I propose the following and have for years:
I'm sure there will be an internet sales tax. There is too much money
involved for politicians to not tax it. Since this is inevitable, I
think the best thing to do is design a tax system that causes the least
complication for retailers. I propose the following:
1) An internet sales tax based solely on the shipping address.
2) The tax rate be set at 5% (no more then 7%).
3) The money is collected by the IRS or a separate federal sales tax
division.
4) The collected money is divided as follows:
4a) 1% goes to the federal government general fund.
4b) 3% goes to the state according to item 1 above.
4c) .9% (or less then 1% depending on the amounts involved with the
rest going to the federal government) goes to R&D for the internet,
support of public exchange points, support of public high speed links,
and the rest goes to college/university scholarships, general research,
the current general research emphases should be development of new new
sources of energy such as fusion, wind, water, etc.
4d) .1% should go into an emergency relief fund to help deal with
emergencies so relief organizations do not have to wait for congress to
authorize funds. This money would also go to the military to cover
costs of military assistance when military resources are used to
transport relief supplies any where in the world.
5) All merchants have to report is $$$'s collected by city, state,
zip/postal code, and country.
6) Other countries can sign on to the tax agreement by meeting the same
requirements for simplicity, ie reporting is done like item 5 above and
each country can decide how to apply the 5% between federal and local
authorities.
7) Tax should be collected on all sales, no exceptions even if the sale
is to a government, church, state, college, university, etc.
This is my basic opinion and plan. KEEP IT SIMPLE!!!!
I guess if you make enough money you don't have to pay taxes, because when the authorities come calling its totally legit to just move.
Where has reason in the world gone? Have we abandoned it in favor of power and politics?
Nah, I have a much easier one for you.
Housing.
Housing drives people's budgets, and in turn drives the wages necessary to live there, which drives more housing to get those wages.
I could work for $8 an hour if I didn't have to pay housing. (It filters into the rent prices in a lot of places.)
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
Yoo hoo! Atlas is Shrugging!
That tax is why you can't buy parts for 20 year old oddball collectible cars and antique stereos and jukeboxes. They implemented the tax and all slow moving taxed inventory went to the dump.
The truth shall set you free!
also suspect there will be loopholes to buy an extraordinary yacht and keep it somewhere else most of the time, killing the argument that at least the rich are getting taxed more than they do now.
The rich will either buy everything they want somewhere that doesn't have a sales tax, or move out completely.
It should also help skew the economy towards one with a savings rate by taxing spending,
One person's spending is another person's income. Increasing the savings rate will necessarily reduce economic growth.
--
JimFive
Please stop using the word theory when you mean hypothesis.
maybe they need a little call from the Lieberman
look sig is kool
"The real job growth comes with small business."
Incorrect. Real job growth comes from YOUNG businesses, many of whom happen to be small when they start. Older businesses, both large and small, don't generate much job growth.
So the public policy should be to encourage entrepreneurialsim, not necessarily small businesses. There is a difference.
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