Slashdot Mirror

← Back to Stories (view on slashdot.org)

Amazon Charges Sales Tax On "Shipping and Handling"

Posted by timothy on from the not-just-shipping-mind-you dept.

You may have noticed that retailers like Amazon are charging tax, in compliance with state laws, on not just the price of goods, but on the "shipping and handling" fees they charge. An anonymous reader writes "By coincidence I noticed this myself the other night, and ended up ordering something from a supplier in Arizona, rather than Amazon, to avoid the sales tax. Now here is an article about it in the Los Angeles Times."

7 of 330 comments (clear)

  1. Buy Amazon Prime. by Anonymous Coward · · Score: 5, Informative

    Problem solved.

    1. Re:Buy Amazon Prime. by Prosthetic_Lips · · Score: 5, Informative

      False. The sales tax laws are very specifically worded, anything collected (even if in excess of what you were supposed to collect) is required to go to the states. Unless the rules are different since Amazon is out-of-state? I have looked into Florida laws, and even if I were to collect double what I was supposed to, I couldn't keep a penny (legally).

    2. Re:Buy Amazon Prime. by Anonymous Coward · · Score: 4, Informative

      Further, ALL collected sales taxes, whether lawfully, legally collected or not, or even ifthey are collected in error, MUST be remitted to the state.
      Shipping and handling is exempt from sales tax in California but if it is collected, it MUST be sent to California. If they don't, it is tax fraud and they could face stiff penalties, and lose their reseller's permit, preventing them from selling to California addresses.

      A lot of businesses collect sales tax for all sales, including tax-exempt sales. Do they remit those taxes? Probably not.

    3. Re:Buy Amazon Prime. by Sentrion · · Score: 4, Informative

      In many states, companies that collect sales tax are allowed to keep a portion of the tax collected. In fact, they HAVE to keep a portion of the tax collected to remain compliant with most state laws. It's just a fraction, but it is meant to "reimburse" the company for going through the trouble to collect the tax in the first place. If tax is collected when it wasn't due, then the retailer is supposed to refund that money back to the customer. If you buy from a retailer that doesn't charge you sales tax then it is presumed to be your duty to files a state sales tax return to "voluntarily" pay the sales tax yourself directly. Technically you could save a fraction of a fraction by setting up yourself or your company as "self pay" for sales tax. You'll typically need a certificate and a statement, then you can buy tax free and file your own state sales tax return. I've known a few companies that do this, as it can make sense both to save a small portion (the amount the retailer would get to keep) and to keep your company compliant when so many retailers do not collect sales tax or charge the right amount. Staying on top of what percent tax is for each and every zip code and for each and every type of product for each and every state and territory can get even big online retailers bogged down.

  2. Bad Summary by doug141 · · Score: 4, Informative

    Summary should have summarized it's the law. "According to California's sales tax collection agency, the Board of Equalization, sales tax should be collected when a seller "makes a combined charge for 'shipping and handling' or 'postage and handling,' " if the invoice does not show the actual cost of the individual delivery."

  3. Re:Is shipping by nedlohs · · Score: 4, Informative

    You are a special kind of stupid.

  4. Then pay for faster shipping by Sycraft-fu · · Score: 4, Informative

    Their shipping rates are competitive with other online companies. You seem to be complaining that they won't both comp you shipping and do it quickly. Well given that I don't know anyone else that does that, it seems reasonable they don't. Amazon just offers lots of options:

    1) Free shipping that is slow. They note it can take a number of days. However, you don't have to pay anything extra for it.

    2) Per shipment faster paid shipping. They have all the regular options, up to next day. You pay based on size and weight, like with most retailers, and get your shipment in the specified time.

    3) Prime. Yo pay a yearly fee to get two day shipping on all items (even pretty large and heavy ones) and have the option to upgrade any item to one day for $4/item. Often even the 2 day items arrive in one day, though they don't guarantee it.

    Sounds damn reasonable to me.