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Jeff Bezos Calls Sales Tax Requirements On Amazon Unconstitutional
Steve1960 writes "Amazon.com chief Jeff Bezos says the online retailer won't collect tax from most of its 90 million customers until Congress clearly mandates it. Although a growing number of states are demanding that Amazon collect and remit tax on sales within their borders, such demands are 'interference in interstate commerce' and prohibited by the Constitution, Bezos said."
this isn't an interstate transaction
That's some pretty specious logic.
Are you going to claim that sending an envelope of money to someone in another state is not an interstate transaction? If it is one, then sending a digital representation of money to someone in another state is functionally no different. If it is not one, I'd like to propose that your Kool-Aid be listed as a Schedule II drug.
This isn't Amazon twisting anything. The precedent has been established for eons back to mail order catalogs (and probably before). When you order from a company residing in a different state they are not obligated to collect the taxes from you to pay *your state for the purchase. *You are actually obligated to report such purchases and make the tax payments yourself. This is highly unenforceable (and many people have no idea they have to do so) so this ends up being a vast sea of tax evasion which the states are always trying to recoup as much of as they can.
Yes, it would be a pain for Amazon to figure out every state's tax laws and have their systems properly calculate, charge and then pay in the tax payments BUT that's not the point. They are in no way required to do so by the only entity with authority over interstate commerce (The Federal Government) and they have no incentive to do so given the costs and liabilities they would incur. SO we who don't live in states where Amazon has a significant presence get to evade taxes and procure products significantly cheaper than those who live in Amazon encumbered states, the states get to whine about their lost tax revenue, and the federal government gets to stay out of the fight until the states try to usurp their constitutionally protected powers.
The only thing that has changed between Ye Olde Sears Catalog and mighty Amazon is the scale and ease at which money is slipping away from the state's grasp AND current budget shortfalls causing states to look anywhere they can for that money.
How about close the corporate tax holes that permit the bean counter to shift profits overseas to avoid U.S. taxation.
Two of my imaginary friends reproduced once
This affects more than just Amazon. It also affects anybody who sells used goods on Ebay or Craigslist or the newspaper. You would be expected to collect and mail tax to states ~2000 miles away.
That is taxation by a government where you have No voice. It is immoral and unconscionable.
So the question you should be asking: Do I sell across state lines? Am I prepared to file upto 50 different tax returns to 50 different governments? And what if I make a mistake? Will I be extradited hundreds or even thousands of miles from home to stand trial for Sales tax evasion or penalties?
This also seems like a great way for states to abuse foreign citizens. Example: California residents pay 6% sales tax, while non-residents have to pay 16% sales tax. (Or something similar.) And without a voice in their legislature, there's not a darn thing you can do about it.
My AC stalker: " I personally agree with your posts most of the time, but that won't keep me from modding you troll"
This isn't restricting interstate commerce - it's just requiring companies that sell to states they are not located in to collect the sales/use tax for those states. It's adding requirements to collect taxes but not saying they can't sell to other states. If they don't collect the taxes the States will have to go after the companies and not the Federal government.
First, taxation is in fact a restriction of trade. Indeed it is one of the primary restrictions of trade exercised by governments.
Second, requiring a company to collect taxes in a state in which it has no physical presence could be construed as taxation without representation, an issue which historically speaking is unpopular in the USA - I think we fought a big war over it at one time... Which is why the interstate commerce clause exists in the first place. According to the Supreme Court (Gonzales v. Raich, 2005) "...For the first century of our history, the primary use of the [Interstate Commerce] Clause was to preclude the kind of discriminatory state legislation that had once been permissible."
"You want to know how to help your kids? Leave them the fuck alone." -George Carlin
taxation without representation
That's not the half of it. The real problem is protectionism. A state wants people to buy locally because it creates local jobs, etc., and an easy way to do that is to create a tariff on goods imported into the state. Of course, that's economically very inefficient because it's a waste of resources for every company to build a separate facility in every state just so they can avoid the tariffs, so we give regulation of interstate commerce to Feds who presumably won't do that.
So what's the problem with sales tax on interstate transactions? The problem is that the state can create raise the sales tax and then give the money to local businesses as subsidies, which has the exact same result as a tariff because the local companies can reduce their prices by the amount of the subsidy (i.e. the amount of the tax) and thereby have that much lower prices than out of state companies. In fact, basically any sales tax collected has essentially this result, because all else equal a higher sales tax will mean either more services/subsidies or lower non-sales taxes, which are both effectively subsidies to local businesses and individuals.
In other words, collecting sales tax on interstate transactions effectively create state-level import tariffs because out of state companies have to collect the tax but they don't receive the benefits from it. It's taxation without representation and protectionism.