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Amazon Folds In California Sales Tax Deal
theodp writes "In a deal indicating all sides appear ready to call a truce, the San Jose Mercury News reports that Amazon.com is offering to back down from its referendum drive to repeal an online sales tax in exchange for a one-year moratorium on collecting the tax. Under the deal, Amazon would agree to begin collecting the tax from California residents in September 2012, unless Congress takes action on Internet sales taxes before then. The development comes a day after a NY Times editorial ripped Amazon over its sales 'tax dodge.'"
One more reason to leave California.
I once took an excursion to Reddit, and later HN. Unlimited up/down voting sucks when dealing with a hive-mind.
http://www.mercurynews.com/california-budget/ci_18849537
You do need to log in though.
Given the fact that there is a supreme court ruling from the Sears days which is in Amazon's favor, I'm really surprised by this.
Sales tax is the way I want to pay taxes... I don't mind if it's like 25-30% either... but only if they'd repeal those pesky income and property taxes.
The consumers who are purchasing from Amazon and sites like it are dodging sales tax, not Amazon.
Those people have a LEGAL requirement to self-report those taxable items on their yearly tax returns and pay any and all sales tax due on said items at that time.
Just because those people aren't doing so, doesn't put Amazon and other online sites in the wrong.
Like them or not, Amazon is a very forward thinking tech company with ambition, experience and a very well paid staff of top-notch Executives. They are up against an understaffed, underpaid group of Government workers. I doubt that they "folded". My guess is that they have a better plan up their sleeve.
Flexible bare-metal recovery for Linux/UNIX
Amazon also agreed to join with brick & mortar stores to begin lobbying Washington for a national internet sales tax. Think about that.
The Borders brick and mortar bookstore chain is dead, 10000s of people lost their jobs, and I am out of a favourite place to explore books. All this occurred because customers flock to Amazon like buzzards to a carcass so they can buy merchandise without having to pay tax (outside of WA).
Level the playing field. Make Amazon enforce a sales tax just like every other company. Yes, I know buyers are supposed to pay an Internet use tax, but the reality does not match the theory.
And there is nothing wrong with paying taxes. It buys civilization. I pay $40K in taxes out of my salary each year. Do your fair share.
Amazon is in the wrong here, and I'm sorry you can't understand that.
Amazon, the beefy company that eats physical retail stores for breakfast and shits out their skeletons, needs to do it's goddamn part in this country.
As another poster here has stated, there are high-court rulings from the past that clearly state several things about this, among them that a state has no power to tax a transaction that takes place in some other state. Thus the eventual creation of "use taxes", that tax residents of a state for goods that were purchased in that other state,, without actually taxing the transaction.
The problem is actually one of enforcement, since it is up to the individual resident to report on and pay their "use taxes". Which almost nobody does.
However, again as courts have repeatedly ruled, at all levels: difficulty of enforcing a law is not justification for infringing on rights.
Constitutionally, while Congress can "regulate" interstate commerce, it has no power to force any state to enforce (or even recognize) the laws of some other state, whether they be tax laws or any other kind.
No, they died when they tried to be a coffee shop way outside of town rather then a book store.
"Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
It's great to see a big corporation not being completely profit driven and screwing people over... wish they still had free student prime membership tho.
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Based on the synopsis, are we supposed to infer some causation due to the New York Times editorial? "Oh no! An editorial that 99% of our users will never read was against us! What ever will we do?"
Except for ending slavery, the Nazis, communism, & securing American independence, war has never solved anything.
Sure. Define "Fair" first and I'll pay my fair share.
Also, how do you know you couldn't buy civilization for 5k in taxes?
Democrats or Republicans. They are both taking us to the same place and they are not afraid of us anymore.
That's a bunch of crap. First, Borders (Waldens, et al) has had financial issues for years, even before online purchasing came around. Second, B&N and Borders did not try to compete, their prices always sucked. I never bought from Amazon becuause I could save $3 in tax, I bought because of price and the value added services such as reviews and recommendations.
I live in a state with no sales tax, and I still buy from Amazon. Explain me away, please.
The Borders brick and mortar bookstore chain is dead, 10000s of people lost their jobs, and I am out of a favourite place to explore books. All this occurred because customers flock to Amazon like buzzards to a carcass so they can buy merchandise without having to pay tax (outside of WA).
It is hard to feel sympathy for large companies that fail to keep pace with new technology. If you were lamenting the failure of small, family-owned, local bookstores, you would have more of a point.
And there is nothing wrong with paying taxes. It buys civilization. I pay $40K in taxes out of my salary each year. Do your fair share.
Amazon does pay taxes. The problem is that California wants to get taxes from a business that operates out of Washington. The tax should be managed at the federal level -- you know, the part of the government that the interstate commerce clause applies to? If you are curious, see Quill v. North Dakota.
Palm trees and 8
Leveling the playing field would require local retailers to find out in which city, county and state each customer lives, and then charging them the appropriate sales tax. I'm sure the local donut shop would appreciate having to keep track of hundreds or thousands of different tax rates and applying and distributing them all correctly every time someone buys a donut.
All this occurred because customers flock to Amazon like buzzards to a carcass so they can buy merchandise without having to pay tax (outside of WA).
I don't buy books from Amazon because I avoid taxes, I buy from them for the convince of wanting something and having it two days later without having to waste an hour to go get it. I like local bookstores for when I don't know what I want, and just want to browse... Borders did not deliver well on either use case.
Thus is Borders dilemma - why would I support them over Amazon? You get none of the happy feeling of supporting a small local bookstore. Yet you get none of the vastly larger selection that Amazon has. Borders were huge, but what was really in there? I always found a better selection either at a small local bookstore or as I said Amazon, and that was what really killed them.. there is no room in the middle for something inherently specialized where small local businesses can do a better job addressing regional tastes in books than a large chain.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
The only states without sale taxes lack the kind of big city environs that Border's thrived in and/or you're too far from them? Unless you claim to live in Deleware, which everyone knows is a lie.
Your ad here. Ask me how!
But I don't like your definition of civilization.
Either a subsidiary does establish a physcial presence in the state for the parent company or it does not.
If it does then amazon should be collecting sales taxes for CA sales under the current system.
If it does not then CA passing law saying that it does it irrelevant since it is a Federal issue.
But clearly Amazon's lawyers know more than me about this. So can CA pass a law saying that "all companies who sell things to CA residents are now classified as having a physcial persence in CA"???
In case anyone forgot, the US gov't - and by extension the states - aren't automagically entitled to a piece of everything.
Property taxes are generally to provide for local services, police, fire, streets, education.
Income taxes are generally meant to fund the operation of government, and its (allegedly) limited functions.
Gas taxes are essentially a user fee, to fund use of the highway system (and ironically to help fund the poor struggling oil companies through tax breaks).
Sales taxes are likewise LOCAL in function - they're justified by the 'infrastructure' that allows commerce to happen.
So why should internet retailers pay local or state sales tax? Everything's already been paid for at least once.
In terms of the bandwidth needed to secure the transaction and the shopper, both the shopper (through his internet fees) and the vendor (through his bandwidth charges, etc) are already paying for the hardware - wires, property easements, hefty communication taxes. In terms of shipping the goods from the vendor to the customer, someone on one end or the other is paying postage that supposedly already covers this. The seller, through the price of his goods, covers his business costs, property taxes (and the concomitant services already covered therein), etc.
About the only thing that isn't explicitly or implicitly paid for in an internet sale is the bureaucracy involved in administering, levying, and collecting the tax. Put another way: without internet sales existing, government operates, and provides a certain level of services to the public. This should be covered by tax revenues. Now add internet sales to the picture. What specific service is the state providing that it didn't provide before? I can't think of a one. Sure, the police have started branching out their pedo squads to the interwebs, and the state Attorneys General have some more fraud cases to investigate, but I doubt either of those functions have been a net increase in manpower or services - rather, they've drawn resources from other functions already performed to add these to the mix.
Yes, cue the Liberal Left posters who cheerfully want to pay more taxes. I invite them to do so. But the fact is that the US and State governments are not entitled by their very existence to a piece of every transaction that takes place in this country.
We the people need to fund our government adequately, and we do so through a varied panoply of taxes. But a bewildering array of taxes doesn't mean that we need to sit back passively and let ourselves be double-dipped just because legislators have built too confusing a structure to figure out.
-Styopa
What a load of crap. Make every other company have to pay FedEx, UPS, or whomever a shipping/handling fee that Amazon pays for our "free" shipping.
Bullshit. I don't know anyone who is going to buy Amazon books over a brick and mortar over what would be a couple of dimes in sales tax. If that were true, then B&N would be out of business as well. Borders is out of business because their executives made poor business decisions, end of story.
The world moves for love. It kneels before it in awe.
The 10% savings on sales tax is a nice bonus but the real reason is Amazon offers the same items for 1/3 less than retail stores. How is that my problem? Makes a difference when a hardcover reference book is $99 at Borders plus sales tax when Amazon can sell the same thing for $66 without taxes and free shipping. Don't get me started on their $25 DVDs and $19 CDs that Walmart sells for way less...
Only the State obtains its revenue by coercion. - Murray Rothbard
You still need to waste an hour to go to the post office and get it when there's nobody home to sign for the delivery. Compared to picking up a book at a Barnes & Noble store, it's more or less a wash.
The Borders brick and mortar bookstore chain is dead, 10000s of people lost their jobs, and I am out of a favourite place to explore books .... because customers flock to Amazon ... so they can buy merchandise without having to pay tax (outside of WA).
Bullshit. I'm so tired of hearing this nonsense over and over again. Sales tax is a drop in the bucket. Retail stores have higher overhead that has to be paid for with a higher markup. I shop at Amazon because I am 50 miles away from the nearest bookstore, AND that Books-A-Million usually doesn't have what I want, AND even if it does, I'll end up paying more there (before taxes) than I would at Amazon, AND Amazon will deliver it to my doorstep within a couple of days.
To summarize, Amazon has a wider selection, at a lower retail price, and delivers to my door. Brick and mortar stores CANNOT COMPETE with that. If Amazon collects sales tax, I will still preferentially shop there. And so will many, many other people. Sales tax will not save brick and mortar stores.
> to repeal an online sales tax in exchange for a one-year moratorium on collecting the tax
Wait, who folded? If the tax isn't being collected, it sounds like California folded to me.
Up until a week ago I lived in Concord, NH, which has a going-out-of-business Borders in it at this very moment. I visited it every month or two but rarely bought anything, because their prices were too high. Everything I wanted was cheaper or available in better formats on Amazon.
All this occurred because customers flock to Amazon like buzzards to a carcass so they can buy merchandise without having to pay tax (outside of WA).
Actually all this occurred because I can buy shit on Amazon that I can't find in my local Borders bookstore. Couple that with the fact that I don't have to drive ten minutes to the Amazon store, I don't have to wait in line 10 minutes to checkout like I do at Borders, and I don't have to wander around a large, semi-organized floorspace to find the one book/author I want and Amazon becomes a much more pleasant shopping experience than Borders. Everyone I know that shops online does it purely for the convenience, and they typically aren't even aware that the are dodging sales taxes.
So, yeah, I don't think you can blame tax weaseling for online retailers kicking seven shades of shit out of the profit margins of brick and mortar stores.
Motorcycles, Robots, Space Gossip and More!
This legislature law is very poor, I agree with what a lot of people have already said in this thread.
http://www.salespider.com
The only thing Amazon did that helped kill Borders is the Kindle - and it's hardly Amazon's fault that Borders couldn't keep up. I'd be astonished if sales tax made any appreciable impact on Borders' death.
I've placed Amazon orders from inside a Best Buy to get the better price*, but it's not worth the delay on books - certainly not over a dollar. On the rare occasion I found something of interest in dead tree form in any bookstore, I'd just buy it on the spot unless the Amazon price was very significantly lower. More often than not the difference was fifty cents or so. Big freaking deal.
* Because Amazon's price was lower, not because of sales tax. I did this many times while living in sales-tax-free NH. However, I have had big-ticket items shipped to my NH address while living in CA to avoid their absurdly high taxes. If the CA government was in any way remotely competent I'd agree with the "taxes buy civilization" idea, but that's just not the case here. Actually - scratch that. If any part of the government in this country was competent, I'd agree. Eliminate the waste, corruption, pensions, nepotism, and bullshit and we'll talk (I can deal with having someone I disagree with politically in office - it's not like they get anything done regardless. So long as "government contract" is always preceded by "lucrative", they can fuck right off)
How are sites slashdotted when nobody reads TFAs?
You think Borders died because people didn't want to pay taxes?!
I think you missed the boat.
The reason people flock to Amazon is because they provide an excellent storefront, with lots of options (not just books), and it's easy to do. For most folks, it has nothing to do with not paying taxes - it has to do with what is the best option.
The problem they are running into is that technology has changed the way it is done.
In the past, company A was in NY and sold to person A in LA. If company A had a warehouse in LA then they had to collect sales tax. If everything was in NY then they only collected sales tax for the items sold to people in NY.
Enter the computer age. Company A is in NY but has web servers in data centers around the US. These servers are strategically placed to make sure that everyone in the US can get to there web page.
When an item is purchased by Person A in LA it is keyed in at there computer. A web server in LA processes the request and submits the Credit card info to a system in VA. The approval is returned to NY where it is processed into a shipping order and sent to the main warehouse in Tx for Shipping.
So, where was the sale at?
Was the sale made in LA where it was keyed?
Was the sale made in VA where the Credit Card was Processed?
Was it in NY where the company and there order processing systems are?
Was it made in Tx where the order was processed and the sale finalized?
Do they need to collect sales tax from people in La, Va, Ny, and/or Tx?
Do you think they should collect sales tax for every state some processing is done in?
If you agree with the last one then you are looking at La=4%, Va=5% , Ny=4%, Tx=6.25% so on a 100$ purchase you will have $19.25 in sales tax + Shipping. Where the same item from a store in La would only have 4$ in tax.
This puts internet based businesses at a major disadvantage over brick and motor local stores. IMHO it could cause a bigger dip in the economy as there are BILLIONS spent online every year.
The Borders brick and mortar bookstore chain is dead, 10000s of people lost their jobs, and I am out of a favourite place to explore books. All this occurred because customers flock to Amazon like buzzards to a carcass so they can buy merchandise without having to pay tax (outside of WA).
Please. Amazon's prices for books were much less than those of Borders, even without taxes. In fact, you could purchase books on Amazon cheaper than the clearance prices at Borders. Why pay $25 for a book when Amazon has it for $18? Same with music. I could buy a CD at Target for $14 or get it from Amazon for $10. Tax just isn't that high that I care to shop to avoid taxes.
I don't know, but it works for me.
Far from it - Borders did everything they could to avoid stocking sellable coffee shop items. Some friend of a High-Up pulled a deal to put a third rate food supply there. If I recall you couldn't even buy a coke or pepsi - it was all strange off-brands of expensive yuppy drinks.
Note to Self - go see what Barnes & Noble does for refreshments.
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
TAX is a way the government becomes an evil profiteer, stop the tax. Amazon just gave into the man.
Amazon does not require signatures for most purchases. I don't know what the dollar limit is, but unless you're buying a thick stack of books, my experience is that Amazon is going to have UPS just leave the stuff at your door.
Nobody in this nation gives a shit anymore about paying their taxes. Not the people, and definitely not the corporations.
like Portland, OR? Probably more square footage of bookstore per capita than anywhere in the US.
Even with Powell's, Borders and Barnes & Noble to browse, more often than not I bought from Amazon, 'cuz, new or used, they were cheaper, even with shipping.
Karma: It's not just a good idea. It's the law.
I hope they just pull out of California entirely, lock stock and barrel.. And offer incentives to their current partners in California to relocate to other states.
That might just wake up the legislators to some inkling of the modern world.. But probably not, most of them think digital watches are high tech.
Oh, California. What laws can't you pass with your crazy politics?
Proposed California Babysitter Law Could Give Workers More Benefits but Sparks Outrage
If you have never been an employer in America, you are welcome to try it out and find out what labor regulations are really all about and how this will affect your decision to be a 'job creator'.
You are going to find out rather quickly that you don't want the hassle of hiring anybody.
Just look at a TINY portion of this SHIT. You have to collect their data to provide it to IRS. You have to give them 10 minute breaks per hour and 30 minute 'meal time', at all these times they are NOT responsible for your kid. You can't leave them with the kid for more than some 5 or so hours, I can't even parse the entire thing, it's fucking insane.
In case of anything that you do, that violates any of this insanity, you are liable for money, for being sued, etc.etc.etc.
WHO in their right mind wants to employ people in USA? This is just for BABYSITTING. Imagine what the regulations look like for anything else!
And I mean it, this is just a very small part of the entire bill. Oh, how do you like having to provide your babysitter with vacation time and having to give them a 21 day notice before they can be "let go"?
CHAPTER 2. DOMESTIC WORK EMPLOYEE RIGHTS
1455. (a) A domestic work employee who is required to be on duty ........ ....
for 24 consecutive hours or more shall have a minimum of eight
consecutive hours for uninterrupted sleep, except in an emergency.
(d) A domestic work employer shall pay a sum of fifty dollars
($50) to the domestic work employee for each day that the domestic
employer violates this section.
(c) A domestic work employer shall pay a sum of fifty dollars ...... ..... ....
($50) to the domestic work employee for each day that the domestic
work employer violates this section.
1458. (a) If a domestic work employee is required to report for
work and does so report but is not put to work or is furnished less
than half of his or her usual or scheduled day's work, the domestic
work employee shall be paid for half the usual or scheduled day's
work, but in no event for less than two hours nor more than four
hours, at the domestic work employee's regular rate of pay, which
shall not be less than the minimum wage.
(b) If a domestic work employee is required to report for work a
second time in any one workday and is furnished less than two hours
of work on the second time he or she reports for work, the domestic
work employee shall be paid for two hours at the domestic work
employee's regular rate of pay, which shall not be less than the
minimum wage.
1459. (a) A domestic work employee shall earn a wage increase
each year on the same day of the employee's original date of hire.
The increase shall be in a percentage amount corresponding to the
prior year's percentage increase, if any, in the Consumer Price Index
for urban wage earners and clerical workers for California as
computed by the Division of Labor Statistics and Research within the
department.
(b) In any action brought to recover unpaid annual cost of living
pay increases pursuant to Section 1453, a domestic work employee
shall be entitled to recover liquidated damages in an amount equal to
the wages unlawfully unpaid and interest thereon.
1460. (a) A domestic work employer shall not employ a domestic
work employee for a work period of more than five hours per day
without a meal period of not less than
You can't handle the truth.
People are going way too overboard with their borders bashing. The company did what they had to do.
http://www.salespider.com
You still need to waste an hour to go to the post office and get it when there's nobody home to sign for the delivery.
Why would I do any of those things?
First of all, Amazon uses UPS, not USPS. So you could leave a signature for the next day, up to three attempts.
But that would be if they required a signature, which they don't. No book I have ever ordered from anyone required a signature. Even most larger stuff does not - PS3? No signature. 3TB HD, no signature.
The problem with going to B&N or Borders is that it's not a wash at all, because there was in the end a very huge danger they did not have what I wanted EVEN if online it said that book was in stock at that store. I went to each of those a few times for examples looking for specific travel books, they didn't have what I wanted or anything really that good. I ended up getting what I wanted at a local travel store because they knew what books and maps were really good for travel. B&N just knew what books were cheapest to get...
In the end I think that's really what killed them, they tried to go on the cheap, when Amazon is where you go for cheap. When I shop locally, I'm shopping for quality or expertise, not discount.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Right, because Portland, OR isn't a "big city", eh? Heh.
I disagree with that. Did you ever go to a Borders and try to buy something? Honestly? Their prices where higher than other retailers, including B&N. Amazon is a successful model that's grown out of books into all facets of life. I do think however that Congress should end the sales tax holiday for the Internet. It's matured and there are ways of managing it for businesses who sell on the Internet. That way they would be on somewhat even footing with local retailers, somewhat in that at least they're collecting taxes. The model of a local store however is getting awfully grayed out because if Amazon sells it, they usually are lower priced (including shipping) than a local retailer. While this is great for consumers, those same consumers have to work somewhere and retail is drying up. Yes, retail where those kids who are going to school can at least get a job to pay for said school. I went to a local Fry's Electronics to buy a couple of tablets and they have an Internet Price Match so at least they're trying to stay competitive and it saved me $200..
Harrison's Postulate - "For every action there is an equal and opposite criticism"
First of all, Amazon uses UPS, not USPS.
My last delivery from Amazon (a couple cartooning books) ended up delivered through USPS and required a signature.
Best Buy just started an associate program. Amazon ended it's associate program in CA over the sales tax issue which amounted to them holding their breath as long as they could. Best Buy hoped to poach the associates that Amazon dropped.
I thought CA had decided that by having amazon "affiliates" in the state that Amazon itself had a business presence in the state? Amazon dumped all its affiliates in CA so that it couldn't be required to collect tax. But that doesn't seem to be what this agreement is about
-- your Web browser is Ronald Reagan
I used to study at that Borders with my then-boyfriend. At Panera too. Sad day.
The Borders brick and mortar bookstore chain is dead, 10000s of people lost their jobs, and I am out of a favourite place to explore books. All this occurred because customers flock to Amazon like buzzards to a carcass so they can buy merchandise without having to pay tax (outside of WA).
No. They flocked to Amazon because it had a wider selection, was more convenient, and often had lower prices. I live in Oregon; no sales tax. Nobody in Oregon saves a penny in taxes by ordering from Amazon, yet they still do it.
In what city do you live in you have to drive an hour to get.to the.post office?
I'm a cheapskate. I don't have a car. I use a bike or a bus.
Considering all the crap fees you get on your credit cards, the most used payment medium, adding even more taxes seems a little bit hypocritical.
I know of no state that has even thought about levying use tax in any state but the one the order is mailed to. (either through a self-reported use tax or a sales tax.) Where on earth are you getting the idea this is a problem?
If tax was levied this way, virtually any credit card transaction or any transaction involving a business with locations in multiple states would have had issues for decades, internet or not.
Every single state with a sales tax would say that sale was made in LA, and any sales taxes levied (or self-reported) are going to be paid at LA rates. Period. End of story.
The debate is on what constitutes a "substantial presence" requiring the collection of tax for orders shipped to that state. Nobody has even thought of collecting a "chain" of sales taxes on a single order. Your "$19.25" scenario is a complete fiction.
Brick and mortar stores CANNOT COMPETE with that.
Oh, I think they can, but Borders certainly didn't. Barnes & Noble is competing with it.
I have a good new business plan. Why don't I open a corporation in a state that doesn't have corporate taxes, and just 'cooperate' with my local store. When customers come into the store, they are just ordering things from my out-of-state corporation, which instantly buys the items from the store and at the same times uses the store as a delivery service for the 10m or so from the place where the item is stored to the counter. There you go - my corporation is not required to collect sales tax since the customers are from another state, and the same goes for the store.
And I live in Oregon with no sales tax. Every Borders in the state is going out of business, and it's not because of sales tax. It's because their prices were effing ridiculous! Everything was sold (or rather NOT sold) at OR ABOVE MSRP! Even if you had one of their member 40% off coupons, the prices were STILL higher than Amazon. Hell, even Barnes & Noble has better prices in store than Borders did. It's like they were catering to the wealthy snobs who don't care to check prices.
The only party to blame for Borders' death is Borders. Just as it would've been B&N's blame if they, too, went under. Fortunately for them, they practiced adapt and overcome. Borders didn't do either.
I rather enjoyed avoiding sales tax through Amazon and I'll miss it. Twas a bit of tax relief that I could rely on (sort of the cherry on top).
Folks, if Microsoft were to fold who would you blame? Consumers? The government? Apple?
Since when does the law care about "actual practice"? Lawyers base entire cases on the letter of the law, and not the practice. If the actual practice mattered, then the spirit of the law in question would matter, and not the actual wording.
All this occurred because customers flock to Amazon like buzzards to a carcass so they can buy merchandise without having to pay tax (outside of WA).
No, I buy my books at Amazon because
Yes, I know buyers are supposed to pay an Internet use tax, but the reality does not match the theory.
And there is nothing wrong with paying taxes. It buys civilization. I pay $40K in taxes out of my salary each year. Do your fair share.
Sorry but there is no such thing. Individual states may have passed their own version of a "use" tax to try and get around the Commerce Clause, but that is not some National tax.
Do your fair share.
I am doing my fair share. It just doesn't happen to be the same as what you think my fair share should be. In fact, when someone else wants to tell me what my "fair share" is, that's a red flag right there and I have to question their motives.
'The tyrant will always find pretext for his tyranny.' - Aesop's Fables
There are times I like the NY Times, and times I really can't stand them. This is one of the latter. Sales tax is not a reason that B&M retailers are having problems competing with online retailers. Price and service are.
Almost always, I can order something for half the price online. What do I get for doubling my cost if I go locally? Horrible customer service and having to drive to the store (even more money) instead of having it come to my door. Plus, my service experience with Amazon is better than just about any retail store. This lack of service basically rules out me buying electronics in any local store. And the price is usually cheaper online even with sales tax.
So when do I buy locally? When it's something I need that day, or is very small, or when the extra service (from a good store) is important. Local stores need to stop whining about sales tax and start offering better service. Who does this work for? Costco for example. I routinely pay more to buy from them (and pay sales tax!) because of their customer service and their return policies.
Why do people not pay use tax? Because it's a mess to figure out exactly how much you owe. Same for internet stores. Some municipalities have insane taxation rules where certain things are taxed, but not if they cost more than $x, or less than $y, or 20 other rules.
If states want to get paid salex taxes, simplify things. For example, all catalog/internet purchases are charged a 5% sales tax regardless of what you're buying. Even if each state set its own, one sales tax on all products linked to each state is simple to deal with. Particularly for smaller stores, setup a national processor (paid for by the taxes) that each store can simply send its collected taxes to with a state-by-state break down.
That's how you collect taxes on online purchases, not by whining.
are you seriously implying that the Portland metropolis is not a 'big city environ' ?!?!?!?
I lived in WA for seven years and bought from Amazon regularly, and wouldn't bother to spit at a Borders. Borders, Barnes & Noble, Walden, etc., are all the same soulless suburban megamall-culture shit, but with worse prices and less selection than Amazon. If I buy books in person, it's from small local used book stores.
Borders does have an online store (http://www.borders.com) and it does have an ebook reader (Kobo). As far as I know, it is only closing its brick & mortar stores.
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I buy things from Amazon because I can do it at 11PM from my couch and have it in two days. I can also have it shipped directly to out-of-state relatives for no shipping costs. The last time I bought my neice a toy in a physical store and shipped it, I ended up spending more on the shipping than the toy. And the internet will give me all of their competitors pricing, reviews, recalls, etc right there so I don't have to stand in the store wondering if whatever product really is worth purchasing. Oh, and if I buy a case of diapers from the grocery store it costs me $40, whereas Amazon charges me $26.
Amazon has a heck of a lot more than 'no sales tax' going for them. Borders is dead because they had a bad buisness model. When the times change you either keep up or go under. Every industry has large swings and you don't prop up the companies that miss the boat. When IBM missed the PC boat, they suffered and no one cried for them. IBM picked up the peices and figured out how to be competive in the new age. Netflix changed the movie rental game and no one is crying for Blockbuster. Barnes and Nobel found a way to compete with Amazon. Borders failed because they were unable to remain competetive. Don't blame the store who did their job better than them.
Unless something has changed in the last couple of years, Borders online store is run by Amazon.
The truth is that all men having power ought to be mistrusted. James Madison
Fine. I live in a state with a sales tax, which Amazon also collects on all my purchases - and I still preferentially buy from Amazon. Explain me away, please.
I read "Amazon folds" and thought Amazon was going bankrupt. Anybody else misread it similarly?
I strongly believe that the "use tax" is an unconstitutional dodge to enact a sales tax on imported items, something that states were expressly forbidden to do. The Supreme Court found, despite logic, that if use tax is equal to the sales tax and therefore not "unfair" to imports compared to B&M stores, then it is ok, I believe that is a wrong decision. Nowhere in the Constitution does it say that the states are not allowed to impose *unfair* duties on imports. They are not allowed to impose *taxes* on imports, period, full stop. That ability is left to the Federal Government.
The logic employed by states purports that it's not a tax on imports because technically it is levied on everything, except if you already paid sales tax (which is only local fare) then you can skip "use tax".
By the same logic, it should not be discriminatory to say that a store does not allow anyone to enter, except if you are not a minority, you can come in.
'Cept Amazon has a business presence in California (and a number of other states). They also collect sales taxes for a number of other non-Washington states.
The revolution will be mocked
This issue isn't really Amazon's or California's fault. California wants to tax online purchases (especially Amazon's) because it is a profitable income source they have not been tapping into. Amazon wants to avoid it because they profit of off their customers preferentially buying online to avoid state taxes.
I think what this really highlights is the difference of opinion between American citizens and the state governments on sales taxes. People feel that they already pay an income tax and don't want to get taxed again when they buy things. The cash-strapped (and mismanaged) government doesn't want to lose that income source.
Personally, I am disappointed that Amazon is caving. I was hoping for their referendum to make it to a vote to see the actually CA public opinion on this issue. But then again, I never think it is a good idea to give more money to any organization (private, state or federal) that cannot balance its current budget.
In 1997 a textbook that went for around $100 everywhere else was at Amazon for $55.
I've been a loyal customer ever since.
that is because it benefits the wealth few. Amazon not collecting sales tax benefits regular people so regular people need to be taxed more. Got it.
You'd almost have to be a FOOL to locate a business in that state. I've had many friends & relatives LEAVE that state, because of the stupidity of their "laid back" lifestyle, and overburden tax rates. Free health care for ILLEGAL aliens, free this, free that. Sorry there isn't anything free! Too many taking from the producers and giving to BUMS and CRIMINALS (illegal aliens are criminals). I could care less who comes to this country, as long as you do so LEGALLY, speak ENGLISH, live by the laws of the United States, not whatever h*ll hole you came from.
"All this occurred because customers flock to Amazon like buzzards to a carcass so they can buy merchandise without having to pay tax (outside of WA)."
No, because outside of a very small selection of goods the closest stores are an hour's drive (one-way) away.
Crappy local selection vs. Amazon and two-day (or 1 day at $4 per item)? I'll take Amazon. I generally don't even compare prices as the crappy local selection is still a 15 minute drive one-way (which becomes 45 minutes, go there, come back, go back and buy it). I even pay for Amazon Prime, so it's not like I'm worried about a dollar or two difference from taxes.
If you lose money, does the military not need to defend your country? Do the regulators no longer need to audit your bank's books? Does the space shuttle fly for free? Do the teachers and companies who build your roads and schools do that for free? Do prisons, police departments, fire departments, and the like no longer need to exist?
Does your real estate or stock broker give you transaction commission free if you're under water? Fuck no.
Every transaction should taxed - no deductions, no exclusions, no loopholes. You want fair? Get rid of all the ways around taxes. If you think somebody deserves money for being special, send them a government check - but don't hide it in the tax code. Corporate loopholes and "incentives," and negative personal tax brackets, are hiding much of the "spending" we do in Federal Government.
Is it just my observation, or are there way too many stupid people in the world?
Amazon complaining about being so confused as to which taxes apply where is silly. Amazon has provided the e-commerce front-end for Target for many years, and they don't have any problem figuring it out for them... Now, for BillyBob's Discount Pez Dispensers, yeah, it's a real problem, and the reason Federal legislation is desperately needed, instead of these constant battles, legal patchwork, and lost state revenue. I imagine the way it will end up working is there will be a single rate for each state and the business will have to fill out a form with one blank for each state. Some central processor, or maybe the IRS, will divy up the single check to the appropriate states. An alternative would be a rate lookup by ZIP code which is rather trivial to automate for any business with a computer (or access to one.) Of course that would involve electronic submission too...
About the CC processing question: No. That does not constitute a substantial presence, unless we are talking some capital equipment and/or employees in that state. As long as it's the bank's equipment that is doing the processing, the merchant is off the hook. The big question with Amazon is if affiliates count. Many states have decided they do.
OTOH, Amazon has been doing some scummy stuff too... they have Distribution Centers in some states that levy sales tax, yet STILL don't pay it. They make the DC an "independent company" (e.g. something like "Texas AM Distribution") and then tell the state that they have no presence, despite the huge warehouse and workforce in the hundreds.
Amazon, or a third party seller... I have had third party sellers send things USPS, though I've not had a signature for those. It's very rare and why would they pay to require a signature for a book?
"There is more worth loving than we have strength to love." - Brian Jay Stanley
This whole conversation is silly. The Federal government needs to step in and settle this. Amazon and every internet retailer should have to collect taxes and remit them to the state. Amazon has a "presence" in every single state that has internet connected computers. Right now they are exploiting loopholes in laws that have not caught up to the internet age.
I do not understand people who can in good conscience defend what Amazon is doing. Corporate charters are granted to companies with the understanding that the companies will act in the best interests of the country. In theory (and this never happens), if a corporation does not act in the best interests of the state, the charter can be revoked. Those limitations on corporations have been largely eroded, but that is the way our Founding Fathers intended for corporations to be limited.
http://reclaimdemocracy.org/corporate_accountability/history_corporations_us.html
Amazon is basically saying "fuck you" to America. They are saying "fuck you" to the states who depend partially on sales tax to fund their operations. How much sales tax revenue do you think the state of California has lost since the year 2000? How many businesses have gone under and not been replaced because of the internet?
I am not a fan of big government by any means, but this is getting ridiculous. In case you guys have not figured this out yet, the corporations are not here to benefit us. They are here to extract as much labor from the people of the United States as possible, and provide the least amount of compensation to those people as allowed by law. The government and our ability to elect our representatives is the only tool we have to defend ourselves from the corporations. Beyond that, we can starve them of income by refusing to buy their products.
On one level I get it. A bunch of you guys are cheap bastards. You do not want to pay sales tax and believe you can spend the money better elsewhere. Fine. Stay off of the public roads, do not use electricity, water or any other necessity that is partially funded by government subsidies, never call the police or the fire department, take your kids out of school, and basically go the fuck into the cave that you want to live in. You obviously do not want to be a productive, CONTRIBUTING member of society.
I used to study at that Borders with my then-boyfriend. At Panera too. Sad day.
A girl! On Slashdot?
(Washington State)
I purchased a mouse from them years ago
and was required to pay tax on it.
I've spend many thousands of dollars at
www.newegg.com. Only bought a mouse at Amazon.com
because of it.
Tax cheat? No just looking for the best price.
Arguing with him is completely pointless because he's completely oblivious to reality. I've tried before.
Reality has a well-known liberal bias.
Always claiming that 2+2=4 when Fox News clearly tells us 2+2=5!
It might not even have been "Signature Required". If the mailman tries to a large parcel, and he knocks and no one's home, he puts one of those "We Re-Deliver for You" flyers in the mailbox. I'd take a photo of the postage label, but it was months ago and I've long since recycled the box.
Why is it not the responsibilty of the buyers who reside in CA to pay the use tax on their purchases? Are they a state full of criminals? We file detailed and thorough use tax filings every quarter.
The states (not to mention the counties and cities are starving for revenues.) This is a step onto the slippery slope of making all retailers file and pay sales tax in all jurisdictions where they have sales regardless of nexus. When the revenue from this grab isn't enough it will be interesting to see how the states go after retailers selling from abroad (particularly digital sales.)
Suppose you were an idiot. And suppose you were a member of congress. But then I repeat myself. -- Mark Twain
Taxes *could* buy civilization. At this point taxes are paying to keep those in power in power. We're paying more and getting less. Don't bullshit me about buying civilization. That line played about circa 1975.
IANAL, but I believe you are correct on all points.
However, your out-of-state corporation must report the sales tax it should have paid for purchasing items in the state of your local store, and then pay that. So, you're flipping the obligation to report/pay, but other than that....
Your ad here. Ask me how!
It's online store is run by Amazon, essentially Amazon bought (long-term leased?) the name. The Kobo was a far too late addition... same release year as the Nook Color and Kindle 3. And it was a rebrand of a 3rd party product.
And Borders is bankrupt. The online store will continue as Amazon IP, I suppose.
Your ad here. Ask me how!
The question is very simple. Why should Amazon pay sales tax to California? What does California give to them?
The traditional Brick and Mortar store receives (in theory) police protection from local and state police, fire protection from fire fighters, sidewalks, paved roads for it's customers to travel on, schools to educate it's employees, etc. etc. etc. All paid by taxes that it pays to local and state governments. It receives services so it should pay taxes.
So what about Amazon. Does it get any of these things from California?
The answer is NO. It receives nothing from California because it's offices and warehouses and such are all located in other states where it pays other localities.
In what way is Amazon failing to pay it's "Fair Share"? It owes no share to California, any more than the catalog stores did for the many years they did catalog sales and never charged state and local taxes on catalog sales.
(Yes the shippers like UPS and FedEx get those things, but they pay the taxes because they DO have warehouses and presences in those jurisdictions.)
IF a company receives no benefits from a jurisdiction and has no property or legal presence in the jurisdiction why should it pay sales tax or any other squeeze to a jurisdiction?
Here's another thought. Everyone cites Amazon in these debates, now talk to me about the Mom and Pop Honey Farm in Outer Nowhere, Delaware that sells maybe ten jars in the whole state of California. Are they supposed to keep track of the over 1000 sales taxing jurisdictions across the country? Some of which do tax their product, some of which don't and some of which might or might not depending on if Honey is a foodstuff or a luxury good? How do they know? And lets not even mention the leather goods store in some not American country, or private sales between individuals or the hundreds of thousands of small vendor in non California jurisdictions that would have to be able to cope.
Internet sales are international in scope and the vendors are not all Amazons. The laws are far from uniform, have varying terms and conditions and can change from year to year or even more often then that given city and town sales taxes passed by local government councils on a whim. Who tracks these. Who produces a master list? Who (among the small businesses trying to get going on the web) is going to have the time to read through all the maze to determine what taxes may or may not apply to their product. (One small example. Here in my native Maryland Food is generally not taxable, except for "Snack" foods in certain jurisdictions. Unless it's in a plastic container, in which case it might be. Get the idea?) Does a small vendor even know which jurisdiction a purchaser is even in? Some streets here one side is in Baltimore City and subject to their taxes, the other side is in Baltimore County and isn't. Yet every address will give a Baltimore for name of City and a zip that probably doesn't follow city county jurisdiction lines.
Amazon just might be big enough to be able to sort this out, but can anyone smaller than them? And even Amazon, which sells practically everything, may have problem figuring our which tax rate or law applies to which product and under what rules.
No there is a very good reason why the law says you can only tax the businesses who are in your jurisdiction. If Amazon or any other e-tailor doesn't have a presence they shouldn't have to pay taxes period.
Larry
Charge tax at the point the customer takes possession of the merchandise. UPS delivers your box of goodies to california you pay tax to california. The online retailer collects the tax to the shipping point the goods are sent to (if you want a mailbox out of state that's fair, you pay the gas).
Allowing out of state companies to compete against local ones without paying any taxes gives them an unfair advantage- meaning the local companies go broke. That means fewer local jobs and lower local tax revenue to help the unemployed. Allowing amazon to do business without paying taxes is like letting china sell cars in the USA tax/tarif/quota free. If you care about your quality of life you won't allow this.
The Canadian version of Amazon.com has nearly identical pricing, and they ship to the USA too.
I live in Thailand, and ever since Amazon.com started pre-collecting foreign "import duty" (which is not regularly collected here anyway), I dropped them for Amazon.ca and Amazon.co.uk.
This is very disappointing. What I am wondering is whether other online retailers will have to charge sales tax. It seems that this assault is leveled at Amazon only, and while I make many purchases there, I also shop at other sites that do not charge me sales tax. I do not see Amazon having an unfair advantage. I'm not happy with the prospect of feeding a government that is so uncivilized that it allows its citizens to do without health care, and horribly mismanages tax dollars. I suppose it is good that I will spend less money, because it is a fact that I will do just that. Hopefully California sales tax won't extend to food, but I suppose Amazon will still give consumers the advantage by offering lower prices. I already regularly buy certain groceries there. I was kind of excited about Amazon's upcoming version of the iPad, but I won't buy it at all if I have to pay sales tax.
I used to study at that Borders with my then-boyfriend. At Panera too. Sad day.
A girl! On Slashdot?
I don't think anyone said that...
For a site about things like basic rights, Slashdot users sure do like to censor "dissent".
I'm out of here (California). California sucks more taxes overall than most anywhere in the country now. I pay through the nose to be here. The party is over. And no, you don't owe a huge hung of your income to government goons and you especially don't owe them collecting their taxes for them.
The rebate will make up for any taxes paid by that family on the low end of the wage scale.
Differing opinions are fine, but let's have a reality-based debate. No state is attempting to unilaterally tax Amazon unless it has buildings and employees in the state. The corporation has real facilities you can walk into in 19 states. It collects sales tax in just five of these (two are in states without statewide sales tax). See http://www.amiba.net/resources/news-archive/amazon-nexus-subsidiaries for the list and documentation.
For most folks, it has nothing to do with not paying taxes - it has to do with what is the most convenient option.
FTFY.
Borders... Panera... and from his posting history I gather he's an iFanboy and thinks we should use Tau instead of Pi.
Wal-Mart took in $431 billion last year and made a profit of $15 billion. That's only 3% profit. Why?
Because Wal-Mart employs over two million people, Wal-Mart has thousands of stores needing to be built and maintained, Wal-Mart has to pay for that merchandise it sells. There's not much of a margin for Wal-Mart. Just a 2% gross receipts tax would slash its profit by over half.
Then look at Microsoft, $70 billion revenue, $23 billion profit. That's 33% profit! Why?
Because Microsoft has a fraction of the employees, relatively little infrastructure to maintain, and has to pay very little for the merchandise it sells. Most of the revenue is simply contracts, not physical goods purchased, shipped, stored, stocked and sold. A 2% gross receipts tax would barely touch Microsoft's profit at 4%.
You have thought up a most unfair system that basically discriminates based on industry. Any company that is labor or capital intensive is going to get screwed.
Now that's a regressive tax, hit all Wal-Mart customers with a couple percent price increase. That means hitting most of the lowest-income people in the country.
That doesn't even count that most of the companies selling through Wal-Mart will be tacking on their own gross receipts tax.
I wonder what the final extra tax hitting the consumer would be.
it's just dumb.