Amazon To Pay Texas Sales Tax

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.'"

Comments

A red state raising taxes!!??!!!???

[plopez]

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

Re:A red state raising taxes!!??!!!???

[Dan667]

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

Re:A red state raising taxes!!??!!!???

[Anonymous Coward]

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?

Re:A red state raising taxes!!??!!!???

[cpu6502]

"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.)

Re:A red state raising taxes!!??!!!???

[Moryath]

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."

Re:A red state raising taxes!!??!!!???

[rtaylor]

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).

Re:A red state raising taxes!!??!!!???

[Anonymous Coward]

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.

Re:A red state raising taxes!!??!!!???

[Anonymous Coward]

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.

Re:A red state raising taxes!!??!!!???

[Artifakt]

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.

Re:A red state raising taxes!!??!!!???

[Sir_Sri]

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.

Re:A red state raising taxes!!??!!!???

[rohan972]

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?

Note to all governments

[Pope]

How about stop spending more money than you have?

Re:Note to all governments

[Surt]

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.

Texas gov gives huge corp tax breaks

[Dan667]

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

Location based?

[wiedzmin]

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...

Re:Location based?

[wiedzmin]

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.

Re:Location based?

[dodgerfan]

Nope, just the shipping address.

Why?

[Black Parrot]

Doesn't this violate the US Constitution?

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

I'm in Texas and have already gotten charged tax

[honestmonkey]

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.

Well, a good reason to use other sites...

[gestalt_n_pepper]

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.

Re:Well, a good reason to use other sites...

[the eric conspiracy]

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.

Re:Lost an amazon customer

[Desler]

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

Fair?

[wisnoskij]

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.

Re:Fair?

[tthomas48]

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

Re:Fair?

[mybecq]

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.

Re:Good thing I don't live in Texas

[JazzHarper]

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.

Pennsylvania is making them collect next year

[danbuter]

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.