Slashdot Mirror
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."
I suspect that there is a reason why Bezos sells stuff on the internet, rather than practicing constitutional law. If I've been following the case correctly, the states demanding action are states where Amazon has a business presence and a customer. They are simply making an intra-state demand that those doing business in the state collect sales taxes, per usual.
A state with no Amazon business would be on dubious interstate-commerce ice(though post Gonzales v. Raich virtually anything is arguably interstate commerce); but saying "businesses wishing to conduct business in this state must abide by state laws" is hardly a bold arrogation of interstate powers. Bezos is, shockingly enough, just protective of his ~5% advantage over the B&Ms...
Quill Corp. v. North Dakota
"In prison you just have to shut your eyes and take it. Here you have to shut your eyes and give it."
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.
Except it is unconstitutional for a state to tax or regulate interstate commerce. Imagine if California could put a tariff on Florida Orange juice coming into the state to protect California growers?
That is one of those things that is clearly forbidden in the constitution. The issue is that the internet confuses where the commerce is taking place but it is no different than catalog sales and those are also not taxed.
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
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.
Jesus, I wish people would stop spreading this myth. The poor pay sales tax, license taxes, state taxes (yes, the poor pay state taxes) and of course PAY ROLL TAXES. The poor, and I mean the really poor since we haven't raised the poverty line since Regan, don't pay Federal Income Tax. I make 30k/yr, I pay about 2k of that in Federal income tax, and I'm poor. I have no security, lousy health care and no safety net. I have a lot of electronic crap bought cheap & used. That doesn't make me rich. Stability & security make a man rich.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
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
The really poor actually pay a disproportionately high percentage of their income in taxes because sales, gas etc. taxes are not indexed to income.
After a certain level of income is reached tax rates start going down until you start becoming liable for federal income tax. This group is not necessarily poor, but is certainly not well off.
At this point your rates start going up.
After you reach a certain level of wealth the rate starts going down again on average because more income tends to come from dividends, tax free bonds, and cap gains which are tax advantaged.
This is why Warren Buffet can go around saying he pays a lower tax rate on his income than his secretary.
Amazon collects tax it has actually presences in, such as Washington State.
"linux is just DOS with a UNIX like syntax" -- Galactic Dominator (944134)
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
If states can allow and levy taxes on Indian Casinos, why can they not levy taxes on corporations selling to or from their state?
Bzzt. Wrong. States do NOT levy taxes on tribal casinos that are operated on tribal land.
Per federal law, tribes operating gaming establishments must enter into Tribal-State Compacts. with their respective States.
Any money the State gets is per Compact negotiations ultimately derived from Federal law, and in fact these compacts are not legal until they are accepted and entered into the Federal Registry. Furthermore, the federal laws governing this entire situation specifically point out that they do NOT give the States the authority to "impose any taxes, fee, charge, or other assessment upon an Indian tribe."
Now get off my lawn, nub.
"His name was James Damore."
47% of American households do not contribute to the federal budget.
That's just plain false.
40% of the federal budget comes from payroll taxes. That's a 15.3% tax on all wages up to about 90k or so. It's 2.3% after that. It's 0% on rich people income like dividends, capital gains, interest, etc.
The poor may not pay income taxes... but they don't have much income. The rich don't pay payroll taxes, and they have a ton of income.
If you add it all up, the very, very poor come out at about 0 on taxes. Once you get into the lower middle class, federal taxes are pretty much flat-rate from then on - income taxes go up, tax breaks go up (like home mortgage deductions), payroll taxes go down, and more income comes from "favored" means like dividends and capital gains that are taxed at very low rates and interest that doesn't get a payroll tax.
paintball
So eliminate all exemptions for those above a certain income. No overseas stashes, no lower capital gains rate, no nothing. Attempt to hide or underdeclare a significant amount of income, you pay triple and do time.
Oh, you'd prefer to have a "residence" in Bermuda, would you? Enjoy your trip! Just sure you keep paying every nickel of your taxes from there, too. Traveling abroad remains much more pleasant if your passport doesn't get revoked with a wanted felon watch on it.
Those who have benefited most greatly from society can damn well pay most greatly for its upkeep. If they try to evade, society has every right to turn on them. No more accepting this "They'll duck it anyway, who cares?" If that's the case, get them to quit ducking it. Multibillionaires are notorious for demanding government handouts, but I imagine they'll draw the line at getting a mandatory vacation at Uncle Sam's expense for a few years, and they'll pay their damned taxes. They'll screech, but they'll pay.
To fight the war on terror, stop being afraid.
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.