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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.
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.
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.
which is totally what she said
No, if every state stood up to parasites like Amazon, they'd go out of business, leaving the field clear for thousands of small businesses to spring up. That's the long-term win, not kowtowing to corporate bastards.
Tom Swiss | the infamous tms | my blog
You cannot wash away blood with blood
All taxes are regressive. The lie of the left is taxes can be progressive at all. Everyone pays all the taxes. Hiding taxes among the 'rich' doesn't help people realize this, as the taxes just get hidden, and passed down to the little guy in the form of higher prices, lower wages and so on.
But this suits the "progressives" because it creates class warfare upon which to win elections. And when you pit the 'rich' against the 'poor' the people in the middle get screwed the most. If everyone were to realize how much of what they buy is "tax" they throw a fit and toss all the bums out of the legislature and executive branches of government.
Here's a picture: We're taxed when we earn money. We're taxed when we spend money. We're tax openly and we're taxed in secret (hidden). We're taxed to stick it to the other guy without realizing we are the "other guy".
You want my solution to taxes, spending, and so on? It is simple. Vote on things you don't want society to promote, make it legal and tax those things. Legalize drugs, tax them. Legalize Prostitution, tax it. Legalize whatever you think is a "victimless crime" and tax the activity. You'll end up with far more revenue, far less crime (by definition) and the problems of society become controlled.
You can see this with Cigarettes. Legal, taxed to death, and we don't have nearly the problem with second hand smoke as we used to.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
Let me put it this way, as a business-owner in Europe I don't let American companies buy on credit any more. It's just to dangerous, the US is printing dollars to make up for foreign debts and thus increasing it's debts and inflation. Combine that with the debt that is already out there... and I just know that if I want to see my money from US companies, they have to pay up front, because it won't be long before that whole system in the US will collapse. And I can see a lot of other companies doing the same at this point. Not just yet with the really big deals (MS and Google are good partners on a financial level) but I do believe that if the US keeps this up (printing money) it won't take 5 years before those big companies will have to pay up front also. It's just getting very risky doing business with the US... next to all the lawsuits you can get involved in, the unfair protecting of US manufacturers, and now this.... Man, the US should get it shit sorted before it's to late.
IANAL, but I've done a lot of tax programming for major retailers over the years.
While I agree that sales taxes are ridiculous and hard and all that, I feel it's important to point out that Amazon actually has a presence in Texas, and therefore when they sell product to Texans they actually do need to be collecting sales tax and remitting it to the State of Texas. This is commonly known as "nexus" in sales/use tax circles. This is what Texas is asking for - sales/use tax from sales to Texans from Amazon (who has a presence in Texas and is therefore subject to the laws of Texas with regards to their sales in Texas).
If Amazon was being told they needed to collect on behalf of, for example, Maine, they have the absolute right to tell Maine's comptroller to go straight to hell. In fact, as a citizen of Maine, I'd love to be able to listen to that conversation. I'll never be able to tell our comptroller to go to hell, so it'd be great to be able to hear someone else say it.
Amazon has no presence here in Maine, therefore they have no obligation to follow Maine's regulations surrounding sales/use taxes, which are intrastate law, not interstate. The sales/use tax on things I buy from Amazon is my responsibility to track as a Mainer doing business with a company outside the state, and I owe that money to Maine at the end of the year (and we have a system called "Alternative Use Tax" where I pay a small stipend based on income tax to cover any incidental out-of-state purchases I happen to make if I don't want to track them all, which I use).
But Amazon has a presence in Texas. In the same way that the company I currently work for has to start collecting and remitting State sales taxes every time we open our first store in each State (or call center, or warehouse, or business office, or whatever), Amazon really does owe that sales tax to the State of Texas, whether they have been collecting it from their customers or not.
Now, they can certainly choose to pull out of Texas in order to avoid having to collect taxes there, that's within their rights. But they still owe the State of Texas $269 million (plus whatever other sales they make before they finish the pullout), because they were supposed to be collecting that money from their customers who live in Texas for the entire time they've had a presence there.
Note to Amazon: Please come to Maine. We could use the jobs. I'll happily pay sales tax on purchases made from you.
"This post contains words, known to the State of California to cause thought. Wash brain thoroughly after reading."
You can see this with Cigarettes. Legal, taxed to death, and we don't have nearly the problem with second hand smoke as we used to.
As opposed to when cigarettes were illegal? Except they weren't. In your theory, the higher the taxes, the lower the smoking, but this is just another form of punishment. Empirically, if your theory were correct, European countries with high taxes on cigarettes would have low smoking rates, and yet they don't.
If everyone were to realize how much of what they buy is "tax" they throw a fit and toss all the bums out of the legislature and executive branches of government.
Ultimately around 20% of the GDP goes to the federal government in taxes. I'm paying around 30% of my income, that means someone else is not paying their fair share.
Hiding taxes among the 'rich' doesn't help people realize this, as the taxes just get hidden, and passed down to the little guy in the form of higher prices, lower wages and so on.
It's a fallacy to think that 100% of a tax gets passed down. If that were true, in 1946, when the top tax rate was 94%, then the government would have gotten around 94% of the money. And yet, it only got 20% of GDP or so. Check it out, these figures are easily available on the web.
Vote on things you don't want society to promote, make it legal and tax those things. Legalize drugs, tax them. Legalize Prostitution, tax it. Legalize whatever you think is a "victimless crime" and tax the activity. You'll end up with far more revenue, far less crime (by definition) and the problems of society become controlled.
This is an interesting idea, but if you think it would close the federal budget deficit, it's probably because you don't understand the magnitude of the problem. Start here, look at the numbers until you understand them, figure out how much your proposals would save/generate in income, and then come back to me. In fact I wish everyone who has a method for fixing the budget would do that. There are far too many dumb ideas out there that don't take reality into consideration. In short, the problem with your logic isn't a logic problem at all: it's that you spend too much time thinking and not enough time gathering data.
"First they came for the slanderers and i said nothing."
Failure to collect taxes doesn't absolve you from the liability of paying for them. I live in Texas, and I occasionally sell products to Texans. I collect sales tax for those purchases. But even if I didn't, I'd still owe just as much to the state based on the total amount I sold to Texans, pure and simple.
Just because Amazon did the wrong thing doesn't mean Texas is "asking for a handout."
Imagine if your employer didn't withhold federal income tax from your paycheck. Now it's tax time, and you owe all that tax plus penalties because you didn't pay your income tax throughout the year. Is the federal government "looking for a handout?" No. You have unpaid tax liability, plain and simple.
Program Intellivision!
I know is that I've met many "poor" people in my life who when they get that income tax refund or birthday gift of cash etc, go out and buy a couch or a tv instead of paying their credit card bill.
Like Hell they do - they get an income tax loan in January with a 30% effective interest rate, and buy a new big screen or pair of running shoes long before that refund check arrives!
It's amazing how financially ignorant people can be - my younger self definitely included. There's just no educational system to teach better ways: if you don't learn from family, you're stuck learning the hard way.
Socialism: a lie told by totalitarians and believed by fools.
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!
I accept your rejection of the implicit assumptions. Many people make those implicit assumptions. But I have reason behind my perspective.
The accumulation of wealth is supported and enabled by a well run society respecting personal property. The wealthy are those who reap the greatest benefits of society as a whole. Progressive taxes are (or at least can be) fair for this reason.
Regressive taxes place an onerous burden upon those least capable of bearing it. Taken far enough and it recreates the state of slavery where a person no longer works for their own gain, but for the gain of a master.
When you add categories for exception to a flat tax based on necessity, you are creating a system that is in effect progressive in relation to income. It is merely a matter of implementation.
Personally I would prefer a limited exemption flat income tax (including all income, capital gains, etc). Exemptions would be limited to a fixed multiple of household size.
The main issue seems to be that the states are changing the definition of "presence", sometimes seemingly retroactively. It used to be if your headquarters was situated in the state, then people buying from you needed to pay income tax. Then it was if it was shipped from that state. Then if the company had any offices whatsoever, so even if Amazon had some offices serving only internal customers, then they would have to collect tax on everything bought by the state. Now, states like NY and Texas are saying that if any company they are "partners" with are in the state, then the partner company has to collect tax. Amazon hires a company in NY to do some coding, then Amazon has to collect taxes on stuff bought by New Yorkers.
Really, this is all just mail order and things should have been settled and stabalized with Sears back in the days of the wild west. However, states are looking for more money and changing the agreements and telling companies to pray they don't change them any more.