Slashdot Mirror
Impending CA Sales Tax Sparks Amazon Buying Frenzy
New submitter payola writes "On September 15, Amazon will begin adding in sales tax for purchases made in California. This is sparking a buying frenzy among California residents who are rushing to buy consumer electronics and other expensive items on the site before the deadline. Of course, consumers are supposed to pay sales taxes on their online purchases anyway, but few actually do. 'Amazon is not the only Internet merchant affected by the new law. But as the nation's largest online retailer, it has been the main target. More than 200 other out-of-state companies with major business in California may also be on the hook to collect sales taxes on items shipped to the state. The tax revenue from these online sales is being lauded as a win for the debt-ridden state, which estimates it will see an additional $317 million annually as a result; more than $83 million of that is expected to come from Amazon alone.'"
Am I really the only person in the country who doesn't evade taxes?
which estimates it will see an additional $317 million annually as a result
And will be instantly pissed away on corruption and bullshit and the bond payments for the initial funding for that idiotic "high speed" train which is really just a welfare project for high paid political cronies to sit around on boards and committees.
I avoid paying anything to the state of California, whenever possible. They only waste the money on pork and stuff nobody needs.
They also apparently haven't been paying attention to how all of this is going to shake out. Two towns in California are going to get huge amazon warehouses, and those two towns are getting the balance of the sales tax revenue, and they're giving most of it back to Amazon.
So California, amazon and those two towns will spend millions to collect next to nothing.
And I'll be buying from someone other than amazon from now on, unless amazon lowers their prices by 9% to suit.
So that means Cali is still over 15 billion over budget. Well lets see if all of the progressive voters there will vote themselves another tax hike in November.
And I'm buying like KRAZY!!!
Do the government officials in California truly believe that the larger retailers (Amazon) won't find a way to circumvent this legislation, just as they avoid paying federal taxes? Microsoft pays a very small fraction of the state taxes they technically should owe the state of Washington, for example, as Apple does in California. Granted, they aren't retailers in the same sense as Amazon et al, but they do have a good percentage of online retail income.
There are states that do not have sales tax. I believe that Alaska is one of them. So what would happen if someone in Alaska would purchase an item and than give that item to someone in a state that did have a sales tax? With automobiles it is easy since that automobile must be registered in the state of residency the sales tax is collected when registering that automobile. I recently purchased a used car and I had to pay sales tax on it. I payed $10,000 for a car that was sold for $16,000 so the state received $960 from the original owner plus $600 from me. Depending on how many times the car is sold the state could get more from taxes than the original sales price. Now with items that are not registered, if someone would purchase a expensive television who lived in Alaska and had it shipped to someone in Michigan, that someone would not have to pay the 6% sales tax in Michigan. So someone could establish in Alaska to purchase expensive items in Alaska and have them shipped to an address in Michigan and charge 2% and both would profit from it. What is needed is a common sales tax for every state.
how many millions has California spent (in manpower, in legal bills, etc) to 'win' this money? how many years of this will it take to break even?
and now that things will cost more, how much less will California consumers spend (both with Amazon and from local stores)
Is that $317 million before or after all the court costs, the lawyer, the cost of dealing with out of state tax collection, the cost of trying to collect from companies that refuse, etc, etc?
Seems like after all that you'd barely be left with a profit on a state-wide level...
Amazon response to grt is http://www.businessweek.com/articles/2012-08-10/ebay-and-amazon-eye-same-day-delivery
It may not change much. If Amazon is opening more warehouses in California, it can offset the negative perception from taxes by making it easier to get free or at least fast shipping. In the former case, it cuts Amazon's shipping costs so they can offer up more things for free. In the latter case, people are very happy to get things next- or second-day when they paid for longer delivery times. This was originally a major reason for me to start buying from NewEgg as a lot of the Southern California area gets items the next day from the warehouse in Industry, near Los Angeles.
You can never go home again... but I guess you can shop there.
And the reason why those avoidance strategies for the rich are "legal" is because some rich contingent paid off a lobbyist who in turn wrote some ridiculous exclusion into the tax code who then handed that pre-written "law" to a politician who was given a piece of the lobbyist's cut to attach that "law" as a ridiculous addendum to a an unrelated bill that got passed by other corrupt politicians who also sipped from the same money well. But sure, it's legal.
I was thinking a similar thing. You can get standard shipping free normally, but maybe offer a free Amazon Prime-like account to states that demand the sales tax with free two day shipping.
On the other hand, I tend to get things from Amazon in a couple days even with standard free ("super saver") shipping anyway.
Every tax-free online store is now going to advertise this fact.
They get out of collecting taxes for the Federal and State governments. Why should retailers be forced to take the scorn over the tax system?
Business pays no tax, ever. They collect it. Those good at not collecting it somehow are guilty of something, not sure what.
It is called indirect taxation and if Americans truly understood how much that really costs them those jerks in government, the true one percents, would be out of a job.
Instead they are masters of misdirection, vilifying businesses for not collecting taxes on their behalf. Be up front and honest about, take the true cost of government from every citizen just so they know how badly they are getting soaked.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
There are two entirely different types of tax that can be assigned to products sold to end-users: sales tax, and use tax.
Use tax is supposed to be self-enforced, as in the consumers are responsible for monitoring and remitting their tax; however, it is at the selling companies behest if they wish to act as the middle man, collect use tax on the sale, and then remit said tax to the collecting state (thereby removing the customer's requirement to self-remit).
Sales tax, on the other hand, is imposed on the selling business and is a requirement for any business with a nexus (physical presence) in the state to collect and remit. Internet companies have been legally avoiding sales tax by claiming no nexus and having their company located in one of the five states that collects no sales tax (Oregon, Delaware, et al.).
Where I am confused is, what scenario is specifically at play here? Is Amazon now remitting CA tax because they established nexus in CA via the two warehouses, or have they decided to voluntarily remit use tax on behalf of the customer, or are they doing the unprecedented and remitting sales tax that they are not obligated to collect whatsoever? To me this is the key part of the story but is not expanded upon in the article or summary.
how many millions has California spent (in manpower, in legal bills, etc) to 'win' this money? how many years of this will it take to break even?
and now that things will cost more, how much less will California consumers spend (both with Amazon and from local stores)
Ding Ding Ding, we have another winnar!
They'll get almost nothing. Most of it will go to two towns where amazon is building warehouses, and those towns are giving amazon most of the money to get them to build there.
So we the people will have a lot of their tax money spent collecting and redistributing the tax income, but very little of that will actually go to the state level. So they spent all of that (our) money getting next to nothing, and amazon and those two towns are smarter than Jerry and the CA legislation. Of course, the latter don't really care, as long as money is pouring over the sides of the ship and they can spend like drunken sailors.
Hey, the boom economy never ended here in CA. Ask our politicians, who have steadily increased spending on more and more stupid things as the economy has sagged.
Honestly, when VA starts collecting sales tax from Amazon it will have zero impact on my buying decisions from them.
I buy from Amazon because it is easy and convenient. With Prime, things are delivered right to the door within a day or two. When same day shipping is there, there will be virtually no where else I'll need to shop.
Sales tax? BFD.
When the government passes a law that says, "you must hit yourself in the head until you get a good headache", and the people don't obey, don't blame the people.
I'm not a radical libertarian who believes the government should just curl up and die; but there's smart government and there's stupid government. Requiring customers to tax themselves after the point of sale, and expecting anything other than massive non-compliance is stupid government par excellance.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
Blanket "Internet Sales Taxes" are ILLEGAL under the US Constitution because they attempt to tax articles exported from one state to another.
US Constitution, Section 9, Paragraph 5:
"No Tax or Duty shall be laid on Articles exported from any State."
Notice that the prohibition is not limited to any particular KIND of tax. No matter what they call the tax ( "use" tax, "sales" tax, "luxury" tax, "sin" tax, etc...), it cannot be applied to any article shipped across state lines. Period. And anything short of a Constitutional Amendment simply cannot change this.
Amazon is leaving itself vulnerable to lawsuits and criminal charges by illegally imposing taxes on items shipped across state lines.
This is the beginning of the end for sales-tax evading commerce of all kinds, e-commerce, telephone ordering, and order by mail. It is the beginning of the end for the small and mid size non-store commerce businesses.
As every state, county, and other municipalities pile on to demanding these non-store merchants collect their sales taxes, the merchants are going to be faced with a very difficult task: keeping track of the tax rate where the purchase is delivered, and then remitting those funds to the appropriate government agency. Consider a city dwelling consumer, who is liable for city, county, and state sales taxes. The merchant must know how much to collect from each customer based on the delivery address, and will need to maintain separate accounting for every district that they must remit the collected taxes to.
This is going to be very expensive, and guess who pays? Mr. Customer. It will also be very damaging to small and medium size non-store retailers, who will not be able to afford the systems to administer collecting for tens of thousands of different tax regions.
There needs to be a better solution, one that can scale, one that is acceptable to both the merchants and the tax-collecting government.
there are 3 kinds of people:
* those who can count
* those who can't
Here's the thing: if you live in California and purchase something for which there is no sales tax charged to you, you still must pay Use Tax on your yearly tax return.
At any time the California FTB could go after Amazon's sales record for California customers and take all the customers to court for unpaid Use Taxes.
https://en.wikipedia.org/wiki/Use_tax
And that is where I will be shipping large Amazon purchases after September 15th...
It frustrates me seeing legislators attempting to further sales tax even though it does more harm than good, as far as I can tell. It hurts those with little money by giving them less buying power, especially in those states where food is subject to sales tax, though even past that it makes things harder.
Sure it rewards you for saving (though, I thought we were trying to encourage consumerism to keep the economy healthy, but that's something else...), but those that can afford to save can afford to pay a little more taxes, so it's a bit of a non sequitur as far as I can tell.
It's not that I don't want to pay taxes.. I'm perfectly fine with paying income tax, and having to pay based on my ability, it's that sales tax messes that up, such that the poor, who have no option to spend most or all of their income (assuming they want to eat and stay healthy, anyway), end up being taxed more than is helpful or fair.
Can anyone provide a legitimate reasoning for the existence of general sales tax?
Last time I checked (about 4 months ago) J & R electronics (http://www.jr.com/) didn't charge sales tax. No free shipping, but in my neck of the californian woods I pay almost 10% in sales tax. I'd much rather have my money go to FedEx and UPS than uncle Jerry and his cronies.
What will the result be?
Amazon will fade as all those consumers move to sites where they don't have to pay California's already ridiculous sales tax. Eventually the rest of the states will demand amazon pay up... and they will fade into obscurity. At least, up until now, they were collecting taxes from amazons earnings. In the end California will collect NOTHING as the company people place their orders with will be in Canada, Mexico, or somewhere else.
giant pudding-filled swimming pools
That sounds really cool. I would definately vote for that!
by buying out of state - and free shipping
I buy a bit of stuff online because here in ALABAMA the items are not available from any B&M stores.
NOT AVAILABLE in the state. So where is the fairness when the item is not available,
and I would have to drive to a more modern state to get the goods? ( transportation costs pay
taxes also )?
And WTF is the state doing taxing a transaction? Taxing the goods seems OK since there are
costs to maintain roads, etc. But a transaction? No state costs there. Should be no taxes then.
Let them apply the taxes to ALL transactions, including their own bribes - oops, I meant
campaign donations......... and bribes.
Let them set up a real budget, with real priorities ( not subject to the insane lobbyists ) and maybe
I'll reconsider my position.
Most of it will go to two towns where amazon is building warehouses
How do you figure? California base sales tax is 7.25% and that goes to the state. Local government adds on to that, but that base rate always goes directly to the state government.
...and being LIBERTARIAN is a noble, just and right thing to be. Richpukelicans and Democommiecrats care about themselves and NOT you. Government doesn't function, cannot be trusted and therefore deserves NONE of my money. In addition, if you think I care about other people, I tell you...people would steal, rob, or otherwise harm me and family if given the opportunity. I tell them to go to hell, not my problem. SELF-INTEREST ABOVE ALL! OTHERWISE YOU WILL BE RUN OVER BY LOSERS AND SCUMBAGS WHO BELIEVE SELF-INTEREST ABOVE ALL! >:-O
EFFICIENTCY IS KINGand if Schools can’t or won’t do that, they MUST get NO MONEY UNTIL THEY DO.and trust me, money is a GREAT MOTIVATOR FOR CHANGE! Trust me, either do it cheap or don’t do it? Cappice? Schools MUST adopt business methods, otherwise they will fold. By the way, I have NO KIDS, don’t care if they are educated or notbuild MORE ROBOT-BASED PRISONS.Less money to operate!actually, make them stupid so they DON’T COMPETE FOR MY JOBs! Same goes for GovernmentTAKE everything Politicians say and assume the EXACT OPPOSITIVE AUTOMATICALLY.assume lies until TRUTH ACTIONS OCCUR! LIBERTARIAN FOREVER! SALES TAX BAD! Screw em’!
Well somebody has to pay for all of these illegal immigrants.