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Federal Court Tosses Colorado's Amazon Tax
suraj.sun writes, quoting the Denver Post: "A federal court has thrown out a 2010 Colorado law, which had already been temporarily blocked in federal court last year, meant to spur online retailers like Amazon to collect state sales tax. 'I conclude that the veil provided by the words of the act and the regulations is too thin to support the conclusion that the act and the regulations regulate in-state and out-of-state retailers even-handedly,' U.S. District Judge Robert Blackburn wrote in his opinion. The law and the rules to carry it out 'impose an undue burden on interstate commerce' and are unconstitutional, the judge wrote. The tax mainly affected online sales of out-of-state companies that have in-state affiliates, usually generating sales through links on their websites."
I wonder what this means for the plethora of similar bills in other states. Will Amazon continue to call for a national Internet sales tax if they are all struck down?
These laws are unconstitutional. The states are free to try to amend the constitution, but as it stands today, their inability to tax purchases like this is one of the most non-vague areas of our constitution.
Finally, a ruling that deals with the commerce clause as it was actually intended to be used, rather than the current "the federal government can do anything it wants at any time simply by saying the word 'commerce'" interpretation.
Logically, any sales tax levied should be the state you purchased the item from, not where you live. If I drive to a neighboring state and buy something, I pay that state's sales tax, not my home state's sales tax. By extension if I buy something online, the state where the "store" is located should be the one collecting sales tax. When ordering online from a store with multiple locations in different states, it should probably be the state where of the warehouse it ships from since that's essentially the last point at which it was in the seller's possession. Some might argue that the tax should be collected in the state in which the sale occurred but a single online sale can occur in 2 states simultaneously. Ordering online can be likened to having an designated agent go to another state to purchase something for you and bring it back to you.
Sure, if you want to just make shit up and blindly ignore the facts. Amazon has consistently lobbied for a federal internet sales tax.
If you think having to collect tax is a significant reason to the demise of Best Buy, clearly you haven't shopped at one in a long time.
Here's an idea to clear up this mess nicely: get rid of all sales taxes. They're extremely regressive and complicate and impede commerce. Increase income, property, and capital gains taxes to compensate.
Ceci n'est pas une sig.
The Republicans want to repeal the bill because it IS bad. It may have one part that is good in there but mostly it just benefits really big banks or companies, and imposes WAY too many regulations on businesses (that again benefit larger companies because they have staff that can handle stupid overhead like that).
I mean, if you are all for benefitting large companies that is fine, but most people would like to see government support for them reduced and Dodd/Frank are KINGS of supporting large companies through government graft.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Sales taxes are regressive, they discourage commerce, and they incentivize cities to put up big-box stores, while property taxes encourage cities to make land-use decisions that bolster property values.
With so many advantages of property taxes over sales taxes, the sales tax just doesn't make much sense. Conveniently, eliminating the sales tax would also solve the problem of collecting it over the Internet.
Any sufficiently unpopular but cohesive argument is indistinguishable from trolling.
Amazon has no presence in the state, so why should they have to pay sales tax? G.
The thing you, and many other people, don't realize is that no retailer, ANYWHERE, pays sales taxes on purchases you make....ever.....never ever.....never, never ever. The retailers merely COLLECT the tax from YOU on behalf of the the government. YOU are the one paying the taxes. And, no, this is not some weird "retailers pass the cost on" kind of thing. Sales taxes are paid by the consumer. That's why states have things called Use Tax, which is to cover things like mail-order and online. You are supposed to claim those purchases on your income tax forms at the state level, and then pay the appropriate tax. No one does it though, and that's why states are trying to find ways to get their lost revenue.
This benefits customers, because they get items cheaper. Amazon has no presence in the state, so why should they have to pay sales tax? Gas tax already covers any usage of the roads etc by shipping and delivery companies. And it's not a big hit for local businesses because for the extra $0.50 a customer gets to have the product now.
In short, the only ones who "lose" are Colorado politicians. And if there was a federal sales tax, Colorado wouldn't get a cut, anyway.
Amazon would not be paying state sales taxes. They would be collecting state sales taxes, like any other company doing business located in the state and remitting those taxes to the state on behalf of the purchaser. It is the purchaser, who benefits from the state sales tax as it is used to fund state services.
Where Colorado messed up is that they tried to levy sales tax on out of state purchases from a company that did not have a presence int he state. This has long ago been decided. What Colorado should have done is passed a bill that out of state companies, doing more than $X business in the state, must collect use tax on behalf of the state. Since use taxes are already deemed constitutional, having the vendor collecting them should not be a problem.
For the billionth time, it isn't "giving Amazon a pass" it's recognition of the fact that the reality is you can't tax purchases that occur over the internet or the telephone. The first problem is whose tax rules should apply... the source? Nice and easy, but that results in double taxation as the destination jurisdiction demands a "use tax" payment - and if the destination is a different country, an entire treaty is needed just to prevent it being taxed twice. The destination rules might work, but what about where the tax should be collected? You could collect it at the source, but then you have the problem of retailers outside of your jurisdiction - you can't apply laws to them (DealExtreme for example would be unlikely to charge and remit the tax. Besides, Europe already tried this and got told to get bent by the USA, so it'd be pretty hypocritical to try it). Collect at the destination instead? Could work - but you either have to do it on the honour system, rely on retailers to hand your local authority their entire sales receipts so they can comb through looking for transactions that need tax collected (not going to happen) or apply it at the border - which doesn't really work in places like the USA where goods don't pass through customs agents getting from A to B.
For a site about things like basic rights, Slashdot users sure do like to censor "dissent".
Like gasoline, the price of asphalt has gone up since the 70s, too.
You seem to have a lack of understanding about percentages. That's ok, the government likes people who don't understand percentages. That way, they can claim that they need to raise the tax rate to make more money, when in fact, mathematics says that if 3% tax on 1970's income was enough to get by, then 3% tax on 2012 income (about 5.4 times as high) should also be plenty.
Amazon has no presence in the state, so why should they have to pay sales tax? G.
The thing you, and many other people, don't realize is that no retailer, ANYWHERE, pays sales taxes on purchases you make....ever.....never ever.....never, never ever. The retailers merely COLLECT the tax from YOU on behalf of the the government. YOU are the one paying the taxes. And, no, this is not some weird "retailers pass the cost on" kind of thing. Sales taxes are paid by the consumer. That's why states have things called Use Tax, which is to cover things like mail-order and online. You are supposed to claim those purchases on your income tax forms at the state level, and then pay the appropriate tax. No one does it though, and that's why states are trying to find ways to get their lost revenue.
Not entirely true. You are correct that this is the way it is supposed to work, but in practice many small businesses find it less costly to pay the taxes than to collect them. I run one, and we do.
For our online sales, we do not collect taxes -they are too damn complicated, and the software packages available to calculate them are prone to errors that really piss customers off. It is simpler for our accountants to calculate the tax after the fact, on all sales that are applicable, and cut a check for the amount due. For our direct sales website, we do collect taxes, but for sales through affiliates, and channels (ebay, amazon, etc) we do not. The cost of getting it to work correctly is higher than the cost of paying the taxes ourselves, and it keeps our customers happier.
To put this post back on topic... I have received demand letters from the state of Colorado under this law - and after a quick reading, declined to pay them as it was obviously an extra-jurisdictional attempt to squeeze money out of us.
"You want to know how to help your kids? Leave them the fuck alone." -George Carlin
That may be true somewhere, but it isn't true in Illinois. Quoting the Illinois Department of Revenue: "Sales tax is a combination of “occupation” taxes that are imposed on sellers’ receipts and “use” taxes that are imposed on amounts paid by purchasers. Sellers owe the occupation tax to the department; they reimburse themselves for this liability by collecting use tax from the buyers."
And, 35 ILCS 120/2 "A tax is imposed upon persons engaged in the business of selling at retail tangible personal property ...".
In Illinois, at least, sales tax is quite clearly imposed upon the retailer, and not the retail purchaser. On a related note, when I was running a small business in Illinois I contacted the DOR and asked if I was obliged to collect sales tax from my customers. They advised me that I was under no obligation to collect sales tax, my only obligation was to pay it.
I'm sorry, but you still aren't paying the tax. You increased the price of the product to include the tax, and then make it transparent to the consumer. You are remitting the tax on behalf of the consumer in the same way as if you were to tack it on to the end.
WRONG.
Our prices are set by price matching other sellers in the various markets we sell in. There is no increase in price to hide the tax. Any additions would make our products non-competitive.
Of course it is possible that we are price matching competitors who have built in a buffer to cover their tax liabilities, but its not relevant either from our standpoint or from our customers.
"You want to know how to help your kids? Leave them the fuck alone." -George Carlin