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Amazon Charges Sales Tax On "Shipping and Handling"
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."
Problem solved.
not a sale for a service?
I pay sales tax when I get my oil changed for both the oil and the labor.
in some states you even have to pay sales tax on the full $649 price of a smart phone
sales tax is on GOODS AND SERVICES
are slashdotters really that dumb not to realize this?
This is the correct behavior (in most states). Hate it? Me too. Bitch at your local government person.
How are sites slashdotted when nobody reads TFAs?
After all the outrage in the Apple tax thread, everyone should stand for paying their fair share of sales taxes, not dodging them by ordering out of state from somebody they normally wouldn't.
Certain items aren't taxable in certain states. For example, clothes aren't taxable in New Jersey, where Amazon will start collecting tax in 2013.
If Amazon is collecting tax inappropriately, then it should have passed the money on to the state. It would be up to the customer to request a refund on his/her state return. The inappropriate tax could offset tax that wasn't collected, but should have been.
The answer is generally yes, you pay sales tax on shipping & handling. Check your local state's department of revenue, though in general if a state can charge a tax it will.
I wonder if you also have to pay tax on Prime? It's main function is to cover shipping & handling for all orders, I cannot see why it would not count. But since it's not part of any one order, perhaps it does not..
"There is more worth loving than we have strength to love." - Brian Jay Stanley
I can tell you that's exactly how it's supposed to happen, in every state I've done the paperwork in.
If you doubt, pick up the phone, order pizza delivery, and check out the receipt.
California doesn't tax for shipping if it's the actual/pass-through shipping cost (and you keep records). "shipping and handling" is taxable, though. Fairly stupid, but then again Amazon has free shipping with a $25 order which is about what the world's small violin costs.
Do you even lift?
These aren't the 'roids you're looking for.
Was the handling charge really for handling or is it a euphemism for our markup after costs? In other words is part of the price being hidden/embedded in the handling charge? *If* so there may be some justification for including handling in the taxable portion of the bill.
If you live in a state where services are taxed, yes. You received the service, which was sending you a box.
I haven't had a need to do this, but suppose I buy a TV from some online place using my CC.
It's shipped, and I've paid sales tax on the shipping. Okay, I return it for some reason,
for a CC refund.
Do I receive a refund for the sales tax paid for its original shipping, or is that lost forever?
You returned the TV, but you didn't return the shipping. You "consumed" it.
(return shipping is not the same as returning the shipping)
I see even classic Slashdot is now pretty much unusable on dial up anymore.
North Carolina does. So why not. Vote Higher Taxes 2012.
where do they bill you for labor on a oil change? The dealer??
The lube places have a flat fee or do they brake it down in to labor and oil cost??
Here in Georgia, shipping on an item sold to another is taxable. I found that out when I ordered some toner for a copier from my local supplier but didn't have time to go pick it up. I called them and they pointed me toward the Georgia law laying it out.
Fairly stupid, but then again Amazon has free shipping with a $25 order which is about what the world's small violin costs.
No, you are wrong.
It is actually only $9.98 ... http://www.amazon.com/Worlds-Smallest-Violin-Akira-Wing/dp/B002IYDTTK
morcego
You ship directly to the purchaser by common carrier, contract carrier, or US Mail
Your invoice clearly lists delivery, shipping, freight, or postage as a separate charge
The charge is not greater than your actual cost for delivery to customer
The first item is basically a distinction between bringing the product to the customer yourself and using a service (like USPS, UPS, FedEx, etc.). Amazon isn't delivering the item itself, so this doesn't apply to them.
The second item is making a distinction between including the cost of shipping in the cost of the item and breaking it out as a line item. Since Amazon does list shipping separately, this doesn't apply to them.
The third item makes a distinction between simply charging the customer for the cost of the shipping and making a profit on the shipping cost. Amazon is charging you more than UPS/USPS/etc charges them to ship the item, therefore they are making a profit off the shipping costs. And that is why the BOE is requiring them to collect sales tax on the charge. They're selling you something extra, they're making a profit off of it, and as a result you as the consumer have to pay tax on their profit. The fact that the extra cost is controlled by them and of no use to you is immaterial. The state treats it like Amazon raised the price of the item but tried to make it look cheaper by including a portion of the cost in with the shipping.
By doing this, the state is ensuring it gets everything it's entitled to, and making consumers aware that when they buy from Amazon, they are paying an Amazon tax, and a sales tax on the Amazon tax.
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."
J&R is based in NYC, website www.jr.com. No tax, several items have free shipping. I've been buying from them for decades with no problem. Amazon sometimes has a lower price, but now that they charge sales tax (almost 10% here in CA) it's worth it to switch.
I don't work for J&R, nor am I paid to shill for them. Just doing my best to keep Uncle Jerry from getting more money.
A few years ago I was trying to find a gameboy advance cartridge that was fairly uncommon.
Sam Goody's carried it for 16 dollars, so I ordered it immediately. They charged me 17 dollars and change for "shipping and handling".
When the package arrived it was the size of a deck of cards and had $1.60 in postage on it, sent via regular post - not even first class.
Talk about thieves.
You may have forgotten the days when Amazon made no profit on the books that it sold and made all its profit on shipping and handling charges. The profit for one quarter from shipping and handling was around $35 million as recall. Don't ask me for a citation; other than Wikipedia, I wouldn't know where to look.
If I used a sig over again, would anyone notice?
not stupid at all (free stuff for sale just pay shipping and handling)
Snowden and Manning are heroes.
Have a look at this FAQ entry on the California Board of Equalization website:
http://www.boe.ca.gov/sutax/faqpurch.htm#10
Ken
It's nice that you found a way to not pay "your fair share" to the state you live in.
Ken
Remember when everyone was upset that Amazon threatened to pull their warehouses out of CA to avoid collecting sales taxes? Now everyone is upset because Amazon is collecting sales taxes in CA according to CA state law...
Ken
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.
Cross border shopping is worse... if i bring my purchases home into Canada, and the border guy is bored enough, I pay 13% taxes on the cost of the item, the state taxes, and shipping and handling costs.
Usually they don't bother now until it's around $200. If I stay in the US, after 24 hours i have a $200 exemption (but $201 makes the whole thing fair game). After 48 hours I have an exemption on the first $800.
U.S.P.S. postage is not taxable by any state. Nor is freight for goods shipped across state lines. Interstate commerce is federal jurisdiction, not state. States are simply not allowed under federal law to impose their own taxes in a federal jurisdiction.
Amazon have had UK sales totalling over £7bn during the past three years, but have paid £0 in tax.
http://www.independent.co.uk/news/uk/home-news/amazon-investigated-by-uk-authorities-over-tax-avoidance-7622019.html
To do something right, you often have to roll up your sleeves and get busy.
Some states do require tax on shipping fees. I know PA does.
Wuddooeyeno? IITYWYBMAD? Like nuts? eclecticallyincorrect.com
I think the LA Times article misconstrued the collecting of sales taxes on combined shipping and handling as to helping Amazon's bottom line. If they collect the tax, they have to pay it all to the state. They can not breakout shipping from handling and only pay the sales tax on the handling.
Now any handling fees above the actual shipping costs do help the bottom line.
BTW, I am glad that Internet sales are finally being charged sales tax. It helps to level the playing field between the Internet and brick and mortar stores. It also guarantees that the sales tax that we should be declaring on our state income forms actually gets collected. Sales taxes are badly needed by our local governments and schools to pay for the valuable local services they provide.
You returned the TV, but you didn't return the shipping. You "consumed" it.
Makes for an interesting loophole when dealing with those online merchants that sell everything for $0.99, but charge an order of magnitude more for shipping and handling.
... says a discarded seasonal worker.
Learn the rules so you know how to break them properly.
www.teslabox.com
brEAk please. brAke is what you do to slow down a vehicle.
Trying to become famous by taking photos. Visit my homepage please.
Congratulations, you're a douche. You are intentionally avoiding paying your fair share and I'll bet my bottom dollar that you still think you're entitled to of your states services.
To follow that up, just because the vendor doesn't collect taxes from you doesn't mean you don't owe them. You are still liable for the proper tax amount and by not paying it you are committing tax evasion.
Stop being such a freeloading fuck and pay your fair share or stop taking advantage of government funded services like roads, schools, health inspectors to keep you from dying from the food you ate at Waffle House last week.
I really can't stand free loading assholes like you.
Persistent Volume manager for Kubernetes - https://github.com/dwimsey/openshift-pvmanager
In the US you get a lot of items from prime next day because they ship from a warehouse near you. However, sometimes the item isn't at one of those, and has to cross the country. That either takes a bit of time, or costs quite a lot of money if you want it done next day.
Amazon is unwilling to pay the next day air prices, so they will only guarantee second day. Nobody is unhappy if it gets there a day sooner, and they don't get reamed on shipping charges.
It's the law? Shouldn't that be enough?
If you don't like it, your only option is to either go into politics yourself to get the law changed or vote for someone else whom wants it changed.
(I'm not OP btw, just another AC)
At the rate of how things are going, my last breath will probably be a pathetic gurgling death-rattle and the words "I got the memo". Shortly after my body slumps across my keyboard and ergonomically correct mouse pad, the rest of the office staff will be celebrating a birthday/anniversary/baby shower two cubicles over with cake and punch.
The average Slashdotter is all for taxation-- "with taxes, I buy civilization"-- until they have to pay for it.
Gamingmuseum.com: Give your 3D accelerator a rest.
In California, "handling" is taxed but not "shipping". If the two are bundled into a single charge, it is taxed. That is the law in California. At least, we do not have a value added tax, which would include "shipping" even if it were separately charged.
I see class action suits arising across the country and world!!
My karma is bad. Don't get too close!!!