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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.
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.
Never happen. They'll just add the sales taxes on top of the other taxes.
And in a few years, they'll try to set things up so you have to pay sales taxes in both your state of residence and the state you bought something in. They won't succeed for a while, but they'll keep at it till they do.
"I do not agree with what you say, but I will defend to the death your right to say it"
Amazon also agreed to join with brick & mortar stores to begin lobbying Washington for a national internet sales tax. Think about that.
My guess is that they have a better plan up their sleeve.
Presumably they're thinking Congress will do something before the 1 year wait is over.
upon the advice of my lawyer, i have no sig at this time
Sales tax is the most regressive form of taxation in the United States. If sales tax is 30%, that means the poorest of the poor are paying an effective tax rate of 30%, because they need to spend every penny they make in order to survive. Meanwhile, if you look at someone who makes $30 million a year, spends $2 million on taxable goods, and invests or saves the other $28 million, they end up paying an effective 2% tax rate.
It's obviously not "fair" to tax each person the same dollar amount. Why do people think it's "fair" to tax each person the same percentage? I'd call it most fair to impose the same financial burden on each person through taxes, which means that we're able to take a much, much larger percentage of a very rich person's income before they're seriously inconvenienced by it.
Only if the purchase of securities/other investments was exempt from sales tax. Otherwise, it's simply a flat 30% tax.
Your ad here. Ask me how!
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
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
My guess is that they have a better plan up their sleeve.
Presumably they're thinking Congress will do something before the 1 year wait is over.
Yea, congress is going to effectively increase taxes in an election year. Sure thing.
I don't know, but it works for me.
Why do you care, are they too big to fail? If their business model is flawed, or based on their ability to exploit a legal loophole, they deserve to disappear.
Cheap storage VM.
Sales tax does not work for securities and investments.
If securities were taxed at 30% when you purchased it, it would mean that you have to get a 30% return on your money to break even. Stock traders would not exists because they would have to pay taxes every time the purchase something, even if they lose money. Commodity markets will fail for similar reasoning. If you are a middle man who can add 10% value to a product and resale it, you would still lose money.
Income tax is much more appropriate in these scenarios because you only are taxed on the money you gains. If you buy something at $100 and sell it at $110, you are only taxed on 10 dollars of income. With a sales tax, you make $10 in income but have to pay $30 in taxes resulting in a net loss of $20.
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 this case, apparently laws passed by the California state legislation can be brought up to a referendum of the voters of the state to see if they stay or go, and the state legislation is trying to repass the law the originally passed in a new form that would remove the right of the voters of California of putting the law to a referendum so the voters, and not the PAC-bought legislators, could decide this crucial state issue.
I do not know if the voters in California have the same ability to pass laws directly as in Oregon. If not, then what the legislation is doing will prevent the voters, and as we know government's must be under incredible pressures to ever reduce tax income (absolute income, i.e. they may reduce the tax rate in good times as the economic growth will still result in an increase in the money they can spend). This is why state governments like to diversify the ways they collect taxes, death by a thousand nibbles instead of one big gulp, and the tax payer becomes the frog being heated slowly in a beaker.
It depends on the state you live in. My state levies a sales tax on food items, so I have to pay the bastards an extra 9% just for the privilege of staying alive.
"It is a denial of justice not to stretch out a helping hand to the fallen; that is the common right of humanity."
Collection of income taxes actually violates your rights, which area also explicitly stated in the 4th and 5th amendments. There is nothing right at all about income tax, actually the first time an income tax was introduced (and fiat money by the way), was during the Civil War, which should never have been fought in the first place. So many Americans died in it, more than in either WWI or WWII. The slavery was a secondary issue, which only came about by the 2nd or 3rd year of the war, as the French started showing signs that they were about to intervene. Slavery was abolished in the rest of the world without wars - slaves were bought out and freed, so it wasn't about that, it was about power of federal government to enforce its will upon States.
Once government found a way to tax income and to counterfeit currency it grew immensely (because obviously when they print, they don't have anything backing the stuff, though Constitutionally gold and silver is money, not paper, and the Coinage act defines the amounts of gold/silver). Government became a system of growing government power for government officials and closely tied in businesses, not a system of providing liberties for people by people. It's basically a completely distorted version of what US was about. The income tax and fiat money were introduced in the same year - it's not a coincidence, it's because you can't really tax labor related transactions that are done in real money. But more importantly it was the time when things could be rammed through.
The 18th amendment is very closely tied to the 16th amendment, that's because the income of federal government was coming out of excise taxes, but 50% of income was coming from saloon taxes - alcohol sales.
Think about that. Basically once the 18 amendment was abolished, the 16th should have been abolished automatically.
Anyway, we'll see what happens soon, will people wake up to the fact that they are being robbed and prevented from working for themselves and enjoying fruits of their own labor, we'll see.
You can't handle the truth.
You'll drive it down a bit by removing regulation, but not enough.
- really? Just look at that proposal. Collecting information for IRS on your babysitter. Having to pay State minimum wage. Having to give 10 minute and 30 minute breaks, during which the babysitter is not responsible for what happens to the kid - (this alone means you need 2 babysitters, or what?) Having all sorts of minimums and maximums on hours, and even a proposal for paid vacation leave, some weird stuff on 'meal time', etc.etc. You think this will not create unemployment?
How about the mothers who'll stay home instead, because now they just can't hire babysitter? How about restaurants/theaters who'll see reduction of business, because people just can't go outside? I am certain that this regulation was written not without significant 'help' from some lobbyist working for an 'institutional' day care provider or something of that type.
It's insane nonsense and it's pervasive throughout the entire system, and you don't think this creates unemployment? In a country with over 20% unemployment/underemployment? Well, if you can't get passed your conditioning on the "social justice" (or whatever it is) in this case, then I guess you are right - who cares about those folks, all of them, those who need babysitters and those who need that income.
You can't handle the truth.