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Amazon To Pay Texas Sales Tax

Posted by Soulskill on from the everything's-slightly-more-expensive-in-texas dept.

An anonymous reader writes "The Houston Chronicle is reporting that Amazon.com will soon start collecting sales tax from buyers in state of Texas. 'Seattle-based Amazon, which had $34 billion in sales in 2010, has long opposed collecting taxes. That has drawn fire from state governments facing budget shortfalls and from traditional brick-and-mortar retailers, who say online sellers essentially give customers an automatic discount when they don’t collect taxes. Combs has estimated the state loses $600 million a year from untaxed online sales. However, Amazon has recently begun making deals with a number of states to collect sales tax. Those deals have usually included a one- to three-year window exempting Amazon from sales tax collection.'"

50 of 274 comments (clear)

  1. A red state raising taxes!!??!!!??? by plopez · · Score: 5, Funny

    What! I thought they were all against job killing taxes!

    --
    putting the 'B' in LGBTQ+
    1. Re:A red state raising taxes!!??!!!??? by Dan667 · · Score: 5, Insightful

      it is a tax that is the burden of regular people and they don't really care if taxes are hard on working families.

    2. Re:A red state raising taxes!!??!!!??? by Anonymous Coward · · Score: 5, Insightful

      Phsaw, sales taxes disproportionately affect the poor and middle class. Of course they are in favor of it. I mean, they talk all the time about lowering taxes, but the subtext is always that they want to lower taxes on rich people. Just look at things like the Fair Tax. Does it really take more than about 15 seconds of examination to tell that it is a huge increase in the tax burden on the poor, as well?

    3. Re:A red state raising taxes!!??!!!??? by cpu6502 · · Score: 3, Insightful

      "Bah humbug" on your anti-R slam. Most states make Necessities tax free, so the poor are not hurt. They can still buy the food/clothing/rent they need to survive. It is only the well-off wasting their money on luxury, non-needed goods that pay the sales tax.

      BTW someone below made a good point:

      This tax is ALREADY owed by the citizens. It's called a "use" tax and is applied to out-of-state purchases. Nothing's really changed except that Texas is now forcing delinquent citizens to pay-up. In other words TX and other states are cracking-down on tax dodgers. (Tsk tsk tsk you tax dodgers.)

      --
      My AC stalker: " I personally agree with your posts most of the time, but that won't keep me from modding you troll"
    4. Re:A red state raising taxes!!??!!!??? by Mordok-DestroyerOfWo · · Score: 2

      A few years ago I moved from Texas back to the West Coast. I had already paid sales tax on the goods that I had bought in Texas. I was told by a lawyer-y friend over some beers that technically I had to pay taxes on all of the stuff I brought in from out-of-state. We may be "tax dodgers" but the tax code is hardly fair.

      --
      "Never let your sense of morals prevent you from doing what is right" - Salvor Hardin
    5. Re:A red state raising taxes!!??!!!??? by Bengie · · Score: 2

      Everything about our economy is "luxury". Cell phones are a "luxury", electricity is a "luxury", cars are a "luxury", education is a "luxury", access to health care is a "luxury".
      I'm pretty sure there is quite a bit of stuff we can get by without as we have for the past 100,000 years.

      A nomad life-style is base-line, anything above is a "luxury".

      Income and property tax should be enough

    6. Re:A red state raising taxes!!??!!!??? by fermion · · Score: 2, Insightful
      This is raising tax on the middle class, not those who pay for Rick Perry to be in office. Think how much sales tax, as a percentage of income, that a family that makes $40K a year pays. Now imagine how much Clayton williams pay as a part of income. He can travel to other countries for large purchases, hide money, and use other tricks to minimize overall tax rate. This is what is missing in the current tax debate. Most people of moderate income pay social security on all income, spend most of their money on purchases that are taxed, in addition to any income tax they may pay. Of course, in Texas basic food is not taxed, so the poor are not as screwed by the greedy governor and his friends.

      What disappoints me is that conservatives could restructure the system, end sales tax, and generate income through other means, but they just do the same as always. Not cut costs, but tax more.

      --
      "She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
    7. Re:A red state raising taxes!!??!!!??? by Adrian+Lopez · · Score: 2, Insightful

      Most states make Necessities tax free, so the poor are not hurt. They can still buy the food/clothing/rent they need to survive. It is only the well-off wasting their money on luxury, non-needed goods that pay the sales tax.

      The rich spend less in proportion to what they make than do the poor and the middle class, which is why sales tax is generally considered a regressive tax.

      As for "luxury, non-needed goods", I feel there should be more to life than mere subsistence, and people shouldn't carry a greater tax burden just from wanting to make their lives a little less miserable. Instead of burdening these people with sales taxes, let's raise taxes on those who make their money off the backs of others.

      --
      "In prison you just have to shut your eyes and take it. Here you have to shut your eyes and give it."
    8. Re:A red state raising taxes!!??!!!??? by Moryath · · Score: 4, Insightful

      Indeed.

      Republicans always love regressive taxation. They don't even mind the payroll tax that much since it's highly regressive (capping out means it applies on 100% of the income of the poor and middle class, but 10% or less of the income of the upper class).

      We could fix the tax system by classifying ALL income as income and eliminating the "capital gains" cheating bullshit, and eliminating the payroll tax caps and simply making it apply to all wages. But that'd never fly, because it'd be fair to all instead of the regressive taxation the Republicans want.

      Consider:
      If you ONLY consider income tax, somewhere around 50% of people have "no tax liability." A whole fucking lot of them are the senile delinquent Tea Party followers who no longer work because they're retired; the rest are mostly stay-at-home parents.

      If you add in payroll taxes, it drops to 18%.

      If you add in sales taxes, it drops to around 10%.

      If you add in the various FEES that Republicans like to pass (remember, fees are even MORE regressive as a percentage of income) - stuff like auto registration fees for instance - it's around 5%.

      But the Republicans still insist on ranting about people who "don't pay taxes."

    9. Re:A red state raising taxes!!??!!!??? by the+eric+conspiracy · · Score: 2

      I've lived in several east coast states - MA, CT, NY, NJ etc. Not one of them taxed basic foodstuffs.

      As far as going after entities that are out of state being unconstitutional, here is the story.

      The Commerce Clause prohibits states from restricting interstate commerce. Regulation of interstate commerce is up to the FedGov. The question on this is what constitutes interstate commerce from a sales tax point of view was decided in the Supreme Court in 2011 Quill v. North Carolina which ruled that current law is that a company must have a physical presence before it can be required to collect state sales taxes.

      HOWEVER the same decision also stated that the Commerce Clause gives the Feds power to regulate that; that is allow states to collect sales tax on some other basis.

      Senators Dick Durbin (D-Illinois), Mike Enzi (R-Wyoming) and Lamar Alexander (R-Tennessee) introduced a bill that would allow states to collect sales taxes on internet sales.

      This is why Amazon is going around and cutting deals - they can see the handwriting on the wall. The broad exemption to interstate sales tax in e-commerce is likely to end probably after the 2012 elections.

    10. Re:A red state raising taxes!!??!!!??? by Surt · · Score: 2

      I'm pretty sure they actually intend for the poor to eat used food in the fair tax dystopia.

      --
      "Who is the Journal of Quantum Physics going to believe?" --Stephen Hawking
    11. Re:A red state raising taxes!!??!!!??? by Mordok-DestroyerOfWo · · Score: 2

      The statute does exist, it is never enforced but some legislative twit managed to get it passed. The fact is, it's just another tool that can be used to bludgeon you legally if you piss off the right people.

      --
      "Never let your sense of morals prevent you from doing what is right" - Salvor Hardin
    12. Re:A red state raising taxes!!??!!!??? by rtaylor · · Score: 3, Insightful

      The 2 largest expenses for many areas is police and fire. Without those two services your ability to own property is dubious anyway (any person or group stronger than you would take it or destroy it).

      --
      Rod Taylor
    13. Re:A red state raising taxes!!??!!!??? by Anonymous Coward · · Score: 5, Insightful

      The cost of the IRS is and always has been a red herring. We each pay about $40 yearly to fund the IRS. Not even all of that will go away, as you still have to have somebody make sure taxes are being payed and a bunch of bean counters to manage a prebate. You either have to have each person continue to file yearly or you have to have the manpower to audit an individual business and examine records down to the per-transaction level. Either way, you aren't going to be saving all that much money.

      Meanwhile, rich people spend a tiny fraction of their income on anything that would get touched by a consumption tax. If you think Romney's 14% tax burden is low now, wait until you realize that he probably only spent 10% of his income for the year, giving him an overall tax burden under a Fair Tax system of somewhere in the lower single digits. Now, to go back to raising the some number of tax dollars as before, like you mentioned: if Romney is going to pay less and the total value is going to stay the same, where do you think the money Romney won't be paying will come from? I'll give you a hint: the middle class.

    14. Re:A red state raising taxes!!??!!!??? by mcavic · · Score: 2

      Yeah, that is true. Encouraging saving is good, except when you're talking about the rich who are hoarding cash. Even so, the thing I like about Fair Tax is that it significantly increases compliance, while hopefully decreasing cost somewhat. For example, illegal immigrants pay tax on their purchases, but presumably don't get the prebate.

    15. Re:A red state raising taxes!!??!!!??? by Anonymous Coward · · Score: 3, Insightful

      Less than .3% of our population is here illegally, and they are among the poorest people in the country. Sure, you might get a nice tingle from making sure people aren't dodging their taxes, but the effect will be in the realm of a couple of tens of billions dollars on a budget measured in trillions. It is all a bunch of feel-good nonsense designed to distract from the core objective of anything that remotely resembles a Fair Tax: to pillage the middle class and line the pockets of the rich.

    16. Re:A red state raising taxes!!??!!!??? by Artifakt · · Score: 4, Informative

      Only four states exempt prepared foods from sales tax, and the definition of prepared varies so that for some of them, anything in a grocery store more complex than raw flour, eggs, and milk, such as frozen waffles, counts as prepared. The 4 states with the highest overall sales tax don't exempt prepared foods and two of them don't exempt non-prepared foods either. 13 states have a higher sales tax rate for prepared food than their general sales tax rate.
                18 states tax perscription drugs, and 37 of them tax non-perscription drugs. 41 states tax clothing, but 2 of them admittedly have a set threshold deliberately designed not to tax cheap clothing (either below $100 or $175).
          The reason there is no sales tax on rent is that real estate is by definition taxed by property taxes, not sales taxes. Every one of the states has property taxes paid by renters. Including rent in the your necessities list is thus disingenious at best.

      Sounds like the anti-R slam is totally accurate.

      --
      Who is John Cabal?
    17. Re:A red state raising taxes!!??!!!??? by Sir_Sri · · Score: 4, Interesting

      How does it increase compliance? Unless you force everything to electronic transaction (and watch the privacy advocates on /. have a fit about that). It doesn't increase compliance, it eases it, those are two different things. I'm not an american, but I believe for out purposes I face a similar problem. My income is derived from 3 sources, work, scholarships, and research grants. My work income is obvious enough. Scholarships aren't taxable, again, obvious enough, but they do count towards total family income for certain low income benefits, and different benefits may or may not count them. Research grants are taxable, after expenses, and what is a valid expense can involve dozens of pages of paperwork.

      If they were all just 'income' that would significantly ease my compliance costs, because I don't have to spend 8 or 9 hours every year reading through this years rules and sorting out all of the various ways those rules apply.

      But that doesn't mean it increases compliance. In fact, with higher point of sales taxes it's in my interest to not declare purchases or sales of services to the government, since that could cut down costs for my customers and myself by 20% (if I was in the EU for example), and it would give me a competitive advantage over a big company that can't do that. Which is exactly what happens in Italy and Greece, and is presumably now happening in spain. Those huge masses of 'unemployed' people in spain and greece aren't just sitting around posting on /. all day. They're working under the table so to speak, and of course, unreliably. Cash transactions facilitate this because they aren't traceable.

      Fundamentally the US, Canadian and a few other systems assume tax payers are trying to be honest. That's as flawed an assumption for the "Fair Tax" as it is for the existing income tax structures. Some countries happen to be more honest, or coerced into compliance through the use of credit cards and mobile phone payments etc. (e.g. Japan and Sweden) and some are quite happy to do business in cash under the table, for everything (Italy, Greece, India, Bangladesh). Making it easier for people to comply doesn't mean they will, and the more 'in your face' the tax is, the more likely people are to try and dodge it.

    18. Re:A red state raising taxes!!??!!!??? by Maxo-Texas · · Score: 2

      A true "fair" tax.

      Give everyone one deduction equal to half the national median income. (Currently $26k).

      Then tax everyone at 25% of all income (including investment income) over that deduction.

      It's simple.
      It's very similar to our current progressive tax with a lot less rules.

      --
      She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
    19. Re:A red state raising taxes!!??!!!??? by rohan972 · · Score: 3, Interesting

      It is all a bunch of feel-good nonsense designed to distract from the core objective of anything that remotely resembles a Fair Tax: to pillage the middle class and line the pockets of the rich.

      Are you claiming that now, without a Fair Tax, the middle class are not being pillaged and the pockets of the rich are not being lined? I'm not an American and don't know the merits or otherwise of this tax proposal, but I'm curious what you think is in place now that will prevent the pillaging of the middle class and prevent the pockets of the rich being lined?

      --
      http://marriedmansexlife.com/
    20. Re:A red state raising taxes!!??!!!??? by cforciea · · Score: 2

      And this is why nobody takes Libertarians seriously.

  2. Note to all governments by Pope · · Score: 4, Insightful

    How about stop spending more money than you have?

    --
    It doesn't mean much now, it's built for the future.
    1. Re:Note to all governments by Surt · · Score: 5, Insightful

      Deficit spending is clearly the right strategy some of the time. Particularly if you spend your deficit on infrastructure that grows the economy and results in increased wealth to pay back that debt. The real problem comes when you spend that debt on ephemera like elder health care that gets you nothing but additional expenses.

      --
      "Who is the Journal of Quantum Physics going to believe?" --Stephen Hawking
    2. Re:Note to all governments by riverat1 · · Score: 2

      Government spending as a percentage of GDP is not that different from what it's been since the 1940's.

    3. Re:Note to all governments by teg · · Score: 2

      hey cocksucker, the problem is the spending.

      the revenue is. what. it. is.

      it's the spending that is off the charts.

      It is definitely partially a revenue problem... a big part of the US problem is unfunded "temporary" tax cuts made by George Bush. Given that they were "temporary", they didn't fund them.

      Also, I believe in determining what the government should do first (not all it does today, at least in Norway) and then see how to fund it afterwards. And then go over the list again with an even more critical eye.. But things like education, defense, police, healthcare and public infrastructure need funding at a certain level, and then revenue must match over time - budget deficits in hard times are OK, but that means a budget surplus in good times. Not a permanent deficit.

  3. Texas gov gives huge corp tax breaks by Dan667 · · Score: 3, Insightful

    a tax break for regular people that actually helps the economy? Nope, can't have that.

    1. Re:Texas gov gives huge corp tax breaks by DogDude · · Score: 2

      Not paying sales tax "helps the economy"? What economy? The economy of Amazon.com? It sure as shit doesn't help your local economy.

      --
      I don't respond to AC's.
  4. Location based? by wiedzmin · · Score: 4, Interesting

    So, how does that work? They charge you a tax based on what your billing address, your shipping address, your IP geolocation? I wonder if there is a business opportunity in offering re-shipping services out of states with no Amazon tax for Amazon customers...

    --
    Bow before me, for I am root.
    1. Re:Location based? by Desler · · Score: 2

      So you're gping to pay a middleman and double shipping costs just to save on sales tax? Have fun buying that TV from Amazon and then having to pay your middleman a couple hundred bucks to ship it to you which, along with their fee, will cost more than you would have paid in tax.

    2. Re:Location based? by wiedzmin · · Score: 4, Informative

      Doesn't have to be shipping, if you live close enough to the state border you could drive there to pick it up. Canadians living near the border do this all this time to avoid paying customs fees or to get around stupid shipping restrictions (on Amazon Kindles for example). There are services that offer package pick up in US cities along the border.

      --
      Bow before me, for I am root.
    3. Re:Location based? by dodgerfan · · Score: 5, Informative

      Nope, just the shipping address.

      --
      Work smarter, not harder.
    4. Re:Location based? by Mabhatter · · Score: 2

      I never understand why they don't go after credit card companies and other electronic funds places. Your Credit/Debit card company already has to comply with local state rules anyway (as a business presence) and have your legal postal address. That industry takes an even BIGGER profit from all the people avoiding tax online. They would only have to comply with one address per customer... And adding fees is certainly something they are good at.

      The biggest problem with the sales tax rules is that EVERY BUSINESS could have to support EVERY SALES TAX in the country. That is hundreds of separate amounts based on residence alone and more based on "type of merchandise"... Not to mention they would have to be LICENSED to collect that tax... I don't think even the tax collectors thought through the deluge of paperwork from all the Internet businesses in 49 other states they would have to process.

      Alternately, we could have the Post Office collect the sales tax... They need something to do!

  5. Why? by Black+Parrot · · Score: 3, Insightful

    Doesn't this violate the US Constitution?

    Or are they arguing that Amazon "has a presence" in Texas?

    --
    Sheesh, evil *and* a jerk. -- Jade
    1. Re:Why? by cpu6502 · · Score: 2

      It doesn't violate anything if the corporation Volunteers to collect the use tax. The state government can not force non-residents to comply, but it can politely ask, and apparently amazon said "okay".

      --
      My AC stalker: " I personally agree with your posts most of the time, but that won't keep me from modding you troll"
    2. Re:Why? by doktor-hladnjak · · Score: 2

      These Amazon distribution centers are operated by wholly owned subsidiaries. Amazon claims that it's not their sales business that has a business presence there, but rather the subsidiaries which are technically separate companies that just happen to be owned by Amazon.

    3. Re:Why? by yakovlev · · Score: 2

      Basically, Amazon formed a wholly owned subsidiary to run the shipping business in Texas. They then argued that while the subsidiary had a presence in Texas, Amazon didn't.

      From the way it was reported, it seemed Amazon was fairly clearly in the wrong, but Rick Perry (for better or worse) stepped in when Amazon threatened to close down the distribution center if Texas made them pay sales tax.

      I think Texas and Amazon worked out a deal where Amazon would pay sales tax "after a while" and this is probably that deal coming to fruition.

  6. I'm in Texas and have already gotten charged tax by honestmonkey · · Score: 3, Informative

    It was for a few short stories on Kindle. They cost me $1.07, instead of the $0.99 that was listed. I just assumed they were already charging tax. I haven't gotten charged tax on physical items yet, though.

    --
    Everything you know is wrong, Just forget the words and sing along.
  7. Well, a good reason to use other sites... by gestalt_n_pepper · · Score: 4, Insightful

    is all that is. As for Texas being against taxes, well, the state is about 24.6 billion or so in debt under the ever amusing "conservative" governor Perry. So make no mistake about it. Governor Perry is against taxes, but he seems to be OK with authorizing *spending* whether there's tax revenue to cover it or not.

    --
    Please do not read this sig. Thank you.
    1. Re:Well, a good reason to use other sites... by the+eric+conspiracy · · Score: 4, Informative

      Texas does have one of the lowest per capita state debts, being 45th or so.

      It also has an absolutely rubbish education system (49th in verbal SAT) and the largest percentage of minimum wage workers in the US. These crappy jobs of course don't offer health care coverage as often as better paying jobs. The unemployment rate is right at the national average at 8.2%.

      While it does lead the nation in job growth, it is also leading the nation in population growth.

      And that's despite being wealthy in natural resources like oil.

  8. Re:Lost an amazon customer by Desler · · Score: 3, Insightful

    You would only pay this if you lived in Texas...

  9. Fair? by wisnoskij · · Score: 3, Interesting

    How can they just collect taxes from one online store and leave the other million alone?
    Seems like a unfair advantage and completely illegal to boot.

    --
    Troll is not a replacement for I disagree.
    1. Re:Fair? by tthomas48 · · Score: 3, Insightful

      Walmart, BestBuy, Target, Dell, etc. All pay taxes in Texas. Amazon has been a bit off a scofflaw for many years now.

    2. Re:Fair? by mybecq · · Score: 3, Informative

      How can they just collect taxes from one online store and leave the other million alone?

      Learn about Tax Nexus and you'll have your answer.

    3. Re:Fair? by Grishnakh · · Score: 2

      No, it's not illegal or unfair. Maybe you should go read the Constitution. States aren't allowed to charge taxes to companies that don't operate within their borders (shipping items to citizens inside doesn't count). If a mail-order company has no physical presence within the state, then that state can't force them to charge taxes. Instead, the state needs to go after its own citizens who aren't paying the "use tax" when they buy products from out-of-state.

      Amazon, it seems, has a physical presence there now (some kind of distribution center), so that obligates them to collect the tax. Ma-n-Pa's Online Doodad Shop in Bumblefuck, Maine doesn't have a physical presence there, so they don't have to collect taxes (no do Ma-n-Pa have the resources to calculate sales taxes for the tens of thousands of different jurisdictions across the country, since sales taxes vary by zipcode).

  10. Re:Lost an amazon customer by Anonymous Coward · · Score: 2

    We got ourselves a class A retard here. Did you even read the first sentence? It clearly says 'collecting sales tax from buyers in Texas'. If you live in Texas it is not a 'foreign government'. Secondly, your catch phrase has no legal weight. It is just tat, a catch phrase.

  11. Tax Cuts = Job creation...right!!? by supaneko · · Score: 2

    Don't you remember? When the government cuts taxes for corporations, they (the corporations) create teh jobz!!

    --
    Less-geeky computer repair alternative for Lansing, MI
  12. Re:Good thing I don't live in Texas by JazzHarper · · Score: 3, Informative

    Does Amazon have operations on the ground in Texas?

    Yes, they do.

    Also, California, Florida, Missouri, New Jersey, Virginia and Washington, of course. That's as of four years ago. Probably more, now.

  13. Re:summary by Grishnakh · · Score: 2

    I don't really understand why they're doing this. This deal seems rather short-sighted: charging TX customers sales tax is going to reduce their revenues (and profits), since some customers will switch to other online sellers that don't charge sales tax. Why not stay out of Texas altogether, and build their distribution center in a much smaller state like Oklahoma? Texas is a huge, heavily populated state with tons of potential customers. Oklahoma and Arkansas are much smaller, but right next door, and very centrally located in the country. If they have to charge customers sales tax anywhere (which will mean a hit on the number of customers in that state), why not go to the most unpopulated but strategically-located state?

  14. Re:Good! by spiffmastercow · · Score: 2

    Like the subject says: good! Hopefully, more states will continue to do the same. I'm really tired of seeing of people gleefully dodging sales tax.

    Really? It's the only tax I don't mind people dodging, because it's the only (major) tax that hurts you more the less you make.

  15. Pennsylvania is making them collect next year by danbuter · · Score: 3, Informative

    Starting next year, Amazon will have to collect Pennsylvania state sales tax, as well. The state politicians have been pushing for this for several years, in fact. Amazon was given a reprieve to allow them to set up their system, but it looks like they will have to collect starting next year.