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Amazon Botches Sales Tax, Overcharges NJ
Hodejo1 writes "On July 1 Amazon started to charge sales tax to NJ residents, which is 7% in the state. But something was not right when I attempted to buy a book for my daughter. Just as I was about to finalize the order I noticed the charges were way off. The book cost $8.09. The tax I was to be levied was $0.85. That's a 10.5% tax rate! Why am I being charged 10.5%? It turns out that Amazon is also charging me tax on the $3.99 cost of shipping and handling. That's a problem, because New Jersey does not tax shipping and handling as I confirmed on the state's web site. I then checked a purchase I made from Amazon on October 7th of this year. Guess what? I was taxed on the $13.50 shipping and handling charge for that order. Now it is very possible — probable most likely — that this is nothing more than a coding error on Amazon's site. But it's a whopper! Just consider the hundreds-of-millions of dollars in sales Amazon makes in New Jersey each year. These extra dimes add up very quickly. Has Amazon been overcharging NJ residents' sales tax since July? If so, why haven't they picked it up by now?"
What do you think the "only pay for shippig&handling, nevermind its more than the product" scams are about? just another tax dodge in the land of tax dodgers.
'They do the same for Georgia - unless you get free shipping.
What about this nj law
As of October 1, 2006, the exemption for delivery charges imposed by the seller is repealed for taxable goods and services. For deliveries on and after October 1, 2006, if a shipment includes both taxable and exempt property, the seller should allocate the delivery charge based on either the total sales price or the total weight, and collect tax on the portion of the delivery charge allocated to the taxable goods. In such mixed transactions, if the seller does not allocate the delivery charge, the entire delivery charge is taxable.
I am somewhat confused. I thought only filthy free market capitalists wanted to pay lower taxes. The liberals^W progressives are all forwardlooking and think we don't pay enough tax and see the value of paying more taxes, which is more government, which equals a better world. Why don't we ask Amazon to start charging 100% on everything to everybody? Then governments all across the US, and even the world, will have hundreds of millions or billions of dollars more with which do good.
"But it's a whopper! Just consider the hundreds-of-millions of dollars in sales Amazon makes in New Jersey each year."
Wouldn't that be NJ making it?
How do you know they're aren't dutifully recording it all (Amazon) and handing it over to NJ?
Never allow doubt to tarnish your lust for wealth
It's because S&H is taxable in NJ.
From http://www.state.nj.us/treasury/taxation/emailfaqs.shtml
Are shipping and handling subject to sales tax?
Effective October 1, 2005, the law provides for a new definition of "delivery charges." For transactions occurring on or after October 1, 2005, handling charges are included within the definition of delivery charges, and are therefore exempt from tax whether or not they are separately stated to the purchaser.
Prior to October 1, 2005, a separately stated charge for the transportation (shipping) of tangible personal property from the vendor to the customer was not subject to New Jersey sales tax. Depending on the circumstances, a separately stated “handling” charge could be considered part of the taxable receipt (amount on which sales tax is due) because it occurs prior to actual shipment. However, when “shipping and handling” charges were billed together, both amounts were considered exempt transportation charges for New Jersey sales tax purposes.
As of October 1, 2006, the exemption for delivery charges imposed by the seller is repealed for taxable goods and services. For deliveries on and after October 1, 2006, if a shipment includes both taxable and exempt property, the seller should allocate the delivery charge based on either the total sales price or the total weight, and collect tax on the portion of the delivery charge allocated to the taxable goods. In such mixed transactions, if the seller does not allocate the delivery charge, the entire delivery charge is taxable.
That's peanuts compared to how much more we have to pay in Australia.
As of October 1, 2006, the exemption for delivery charges imposed by the seller is repealed for taxable goods and services. For deliveries on and after October 1, 2006, if a shipment includes both taxable and exempt property, the seller should allocate the delivery charge based on either the total sales price or the total weight, and collect tax on the portion of the delivery charge allocated to the taxable goods. In such mixed transactions, if the seller does not allocate the delivery charge, the entire delivery charge is taxable.
S&H is absolutely taxable in New Jersey, if the shipment contains taxable goods.
Oh, we're trying to do it all here -- income taxes, sales taxes, high corporate taxes, capital gains taxes. And every few years they toy with a VAT to replace most, but not all, of that (in this way, they can slowly start jacking the other rates back up again.)
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
That's because you pay too much.
Posted by timothy
from the insult-to-injury dept.
The insult is that I read another stupid post from timothy.
And the men who hold high places must be the ones who start
To mold a new reality... closer to the heart
If Amazon is overcharging on taxes for deliveries in NJ, who's getting the windfall? Amazon, NJ? All that money has to go somewhere.
Harrison's Postulate - "For every action there is an equal and opposite criticism"
Have you seen New Jersey? 20% may not be enough.
Harrison's Postulate - "For every action there is an equal and opposite criticism"
For not paying sales tax for all these years prior.
You're lucky! Maryland taxes you on rain.
Maryland State Motto: If you can dream it, we can tax it.
All this angry blustering and outrage could have been avoided if the OP had just scrolled a little further down on the NJ state site where it clearly states that the exemption was repealed as of Oct. 1 2006. /thread
Which seems only fair !!
Personal whinging seems to be out of place here on slashdot.
We could fill a whole site with what Telstra Australia gets wrong :)
EMail: 0110001101100010010000000110001101110010 0110000101111010011011100110000101110010 0010111001100011011011110110
Isn't the real problem that NJ state's tax code is so expansive that its own citizens don't even know what they should or should not pay taxes on?
Tax law is one item that Amazon is paying extremely close attention to as of late. They are actually leading the discussion for the national sales tax, because it forces their competition (eBay) to play by the same rules. Amazon is a distribution system masquerading as an online retail store. They have physical nexus and are being required to collect taxes on behalf of customers in at least 16 states.
Between prime and super saver shipping, you might be the only person in New Jersey who has paid for shipping since July...
NJ only gets back about 75 cents on the dollar for the federal taxes it pays. Start there.
Wallmart, Kmart, Sears, CVS, Target, Gamestop, Bestbuy etc. These companies have stores in most states. They have websites where you can buy stuff online. They charge sales tax when you do that. If they can figure out how to do it why can't Amazon. Maybe they should call the Geek Squad. Geek Squad should be able to fix their website. Ha ha
How about ya get Amazon Prime if you buy so much from Amazon that's worth bitching about something you have no clear understanding about. Then shipping is free!
As several people have pointed out Amazon appears to be applying the correct sales tax. The fact that the resident of NJ doesn't understand his own sales tax demonstrates how complex sales tax can be. Every state, county, and city can have their own sales tax laws which have to all be correctly applied based upon arbitrary characteristics. A state can have a tax rate of 4% with an additional 3% for prepared foods and then a city in that state could have a 2% tax on sugary treats. What counts as a prepared food or sugary treat? That will vary just as much and may not even follow common sense, tomatoes have even been legally defined as vegetables for tax reasons.
A national sales tax could make a lot things a lot simpler but would force states to relinquish a lot of power as every business that could use the national sales tax instead of the local taxes would. States with high sales tax would see a large revenue drop while residents of states without a sales tax would be penalized. I could see brick and mortar stores jumping through hoops to selectively use the lower tax rate, if the local tax rate is higher then the national one they'd "order" the item for the customer and then "deliver" it from the backroom.
The best solution I can see is if the federal government runs a sales tax database that every retailer can query. The retailer submits the location, price, item, and some relevant descriptors: "luxury", "food", "service", "book" and the API spits back what the sales tax should be for the item. It's then beholden to the states to keep their relevant data updated. The states would be limited in how creative their sales taxes could be as the software would need to support it but the states wouldn't need to cede power to the federal government.
Here in my state the taxes levied by the state, county and city on tobacco products are included in the price of the product, but you STILL pay sales tax. That's paying tax on taxes!!
You don't do that when you buy gasoline, which has all the various taxes include in the price. Why are tobacco products treated differently? Political correctness, of course. If you even suspect that I have a snus portion in my mouth, you might get cancer! Panic, panic, panic!
You don't pay sales tax on newspapers, but if you buy one from some retailers, you pay sales tax. That's illegal and they still get away with it.
You don't pay sales tax on labor, but you better look at you bill from your local garage before you pay it. Some charge tax on labor and try to get away with it.
What I don't understand is that if you buy something while you're on vacation or while you're working in another state, you pay the local sales tax where you buy the product and your home state doesn't give a rat's ass about it. They would be hard pressed to prove where you bought it. But if you buy online over the "internet", your home state thinks they deserve to tax your purchase.
Don't you think it's about time for the FairTax?
Sounds like a good reason for NJ residents NOT to buy from Amazon.
(or people from any other state that they have a presence in.)
"Huh, it turns out we're taking way too much money from our customers."
"Really? That's unacceptable, we need to fix it right away", said no executive ever.
News at 11. The included link says that yes it's taxable if the item shipped was also taxable.
No sir I dont like it.
just go down to your local book store and order it there.
This is what all of the B&M stores wanted anyways. It looks like it might work.
OH WAIT, it's not as convenient to do this?, then STFU and pay Amazon's price....
The free ride is over, if you don't like it, then GET OFF OF YOUR ASS AND VOTE THE FUCKS OUT OF OFFICE THAT PASS THE LAWS THAT YOU DON"T AGREE WITH.
JFC, how much simpler can this be? INJITS.. Everything has a cost, someone has to pay for it.
STOP listening to WHAT politicians SAY and start WATCHING what politicans DO. You will find that a much more effective way to decide on who to vote for.
NJ has one of the 3 highest tax-rates in the entire US. We've got no one to blame but ourselves.
I bet that incorrectly labelling tax is a felony. You cannot just collect a tax, and then keep it for yourself because you charged more than the government required.
Troll is not a replacement for I disagree.
As of October 1, 2006, the exemption for delivery charges imposed by the seller is repealed for taxable goods and services. For deliveries on and after October 1, 2006, if a shipment includes both taxable and exempt property, the seller should allocate the delivery charge based on either the total sales price or the total weight, and collect tax on the portion of the delivery charge allocated to the taxable goods. In such mixed transactions, if the seller does not allocate the delivery charge, the entire delivery charge is taxable.
---
I don't understand how this made the front page of Slashdot.
Now now, you can't expect Timothy to perform even the most basic of fact checking before publishing something, can you?
There are 6000 different taxing entities in the United States.
Each one of them charges different taxes on different categories of goods.
Each one of them can use a different categorization, each one can charge different taxes on different categories or items, and the tax rate can change at pretty much any time.
And none of them have an obligation to inform anyone about outside the State/County/City about the rate change.
Now go write me some code that works.
What about amazon primes shipping, or free shipping over $35. or all the books that sell for 1 cents plus $3.99 shipping. thar's commerce in that handling.
Some drink at the fountain of knowledge. Others just gargle.
what has the government ever done for me? I was on food stamps and welfare and did anyone hel p me? fuck no!
All items bought via delivery from out of state, should simply be taxed at 10% and have the delivery company collect it. Then allow that company to keep 10% of that collection. Then divide the rest between local, state, and fed.
Regardless, this approach solves the issue of local sales tax disappearing, and allows localities/states to focus on infrastructure. And for companies that ship, a flat 10% makes it easy to avoid dealing with major software issues.
I prefer the "u" in honour as it seems to be missing these days.
And pretty much all states tax S&H.
I noticed the charges were way off. The book cost $8.09. The tax I was to be levied was $0.85. That's a 10.5% tax rate! Why am I being charged 10.5%? It turns out that Amazon is also charging me tax on the $3.99 cost of shipping and handling.
This is why the arguments for a national sales tax to "level the playing field" with B&M retailers are totally bogus.
They always want to tax shipping and handling.
Buyers from B&M retailers do not have to pay for delivery to complete the sale
Therefore, taxing the sale and the delivery at the same rate, doesn't level the playing field It gives B&M retailers an unfair advantage
By the way, this unfair advantage comes from increased usage of the roads and other infrastructure (people driving to stores), and pollution by people's automobiles ---- so the B&M retailers actually create more costs for the government, and it's only fair that the taxes should be greater for the B&M firms.
Who gets the over charge? If Amazon is keeping the extra money sounds like fraud to me. If the state of NJ gets the extra vig it's time to get a new set of politicians in NJ. Sales tax collection on intra state internet purchases is also a mess.
When I buy something online, I'll check the bottom line. If the price is OK, I buy independant of what they charge for. If they opt for splitting up the price, that's their business.
Amazon is just counting on people to not notice it. They're stealing money and they know it.
This is a very common scam that almost nobody gets busted on, mostly because the IRS is too fucking lazy to do its goddamned job.
Still waiting on Serviscope_minor to wake up to fucking reality and realize that Jessica Price isn't going to fuck him.
Which is precisely the problem with taxing internet transactions. There are almost ten thousand different sales tax jurisdictions in the US. It's ridiculous to expect Amazon to keep track of minor variations in sales tax rules for all of them.
Not only is the submitter wrong but scrolling down to the bottom of the article's page reveals an ad for the Kindle Fire!
Pity the unfortunates who live in New Jersey. They not only have to pay a stiff 8% sales tax on what they buy, they're taxed on the expense to get it to them.
What's next.... a sales tax on the tips we give waiters? After all, they're the ones who bring the food to our tables.
How glad I am not to live in NJ, NY, IL or CA. Living in a blue state would make me very blue.
No, sales taxes are the most regressive form of taxation, that is they hit the poor the hardest. Interesting then, that the northeast Blue states all have high sales taxes and other regressive forms of taxation (like all the toll roads and bridges with insanely-high tolls).
Also, NJ is famous for the highest property taxes in the US. The reason for this is racism: every little municipality (there's ~550 of them) has its own separate school district and property tax. They refuse to merge the school districts into county-wide districts like most other states, because no one wants their town's school to be in the same school district as some poorer (mostly black) township or city on the other side of the county. The phrase "home rule" is used a lot here as a euphamism for the real reason no one wants consolidation. Interesting that the northeast liberals are the most racist people in the country.
Anyways, insults aside, sales tax doesn't apply to essentials. If you're poor and buying non-essentials, well, there's the reason why you're poor.
n.b. I am poor.
Don't complain about syntax, grammar, or spelling. There is no.hell like input on android.
Are you an idiot? What kind of conservative complains about regressive taxation?
Sales tax does apply to essentials, it depends on the state. Lots of states tax food, clothing, etc.
If you're poor and buying non-essentials, well, there's the reason why you're poor.
So are you a southwestern conservative prejudiced dick?
With an attitude like that, you sound like the conservative prejudiced dick.
ah, you don't get it. Then again, prejudiced dicks usually don't.
Don't complain about syntax, grammar, or spelling. There is no.hell like input on android.
So it seems that the submitter of this rant was entirely wrong, and sales tax does indeed apply to the delivery costs of taxable goods in NJ.
Will Hodejo1 or Timothy now hold their hands up, admit their mistake and promise to do better in future?
systemd is Roko's Basilisk.
Bed Sore has to pay real money to keep his space ship ponzi scheme afloat and pay for the Washington Times.
Both those are financial black holes, just like his ass.
I'm a Washington state resident, I ordered something through Amazon many years ago;
at the check out I was told there's a chance that a tax may be required on this item
in the future, and if not they'd just keep the spare change (in a round about way).
Then placed a tax to the item price.
Yes Amazon is located in Washington state, and yes they tax in Washington but
they weren't required to at the time, and it wasn't retroactive when they were.
I haven't shopped Amazon since, NewEgg.com all the way, put many computers together
with their help. Amazon.com I read reviews on an items to get two site opinions then
order Newegg.com.
As a side note: every time someone mentions buying something they Mention newegg.com
very rarely Amazon.com I don't see why Amazon.com is always talked about and little about
Newegg.com. Other than Amazon pays for the press.
Chatting while playing games for many years, if someone says damn this sucks I need a new
video card (a common complaint), almost always someone mentions a deal on Newegg.com,
never has Amazon been mentioned. I don't know why, it's just the way it works.
It's unlikely Amazon would be scamming using this method; the fines involved would be horrendous. It would only take one person noticing to trigger an investigation and audit by the state.
From most of the responders to this thread, this is unlikely to also be a mistake. But even if it were, Amazon wouldn't be keeping the money, but would be handing it over to the NJ tax authorities. (That would also probably result in a fine, but not a catastrophic one.)
Will Hodejo1 or Timothy now hold their hands up, admit their mistake and promise to do better in future?
Maybe Hodejo1, but the suggestion that Timothy might deserves a +6 Funny.
Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
What a bunch of clowns.
The number of such states is dwindling rapidly. It won't be long before Amazon has a presence in all states, and there will likely be a national sales tax as well. Oh, and even if Amazon isn't currently charging sales tax in your state, you're supposed to be reporting your purchases to the state yourself.
What's the difference between trash and a girl from New Jersey? Trash gets picked up. Your state is a fucking cesspool.
As someone that lives (and grew up in) NJ, I can only say that you're misattributing the cause of this situation.
Follow the money. In February of 2011, school superintendent salaries were capped (depending on district size) at $125k-$175k, because they were previously in excess of $200k in many instances. These "jobs" are quite awesome. The pay is great (especially compared against other gigs in education). The benefits are great (you get to keep rolling over sick days [because you work from home when you're actually sick], eventually cashing out literally years worth of paid time off when you retire). Many greed-motivated teachers (a minority among teachers) see the position of superintendent as the only way to "win" in their career track. Even now, with the cap in place, the median district superintendent salary is $176,505, with the highest salary being $264,579. This issue was even more ridiculous pre-cap.
But there's only a fixed number of these positions! How terrible! Well, at least there's ~550 of them. Do you think people vying for these truly enviable positions will allow their chances of getting one to be cut? Of course, consolidating districts would mean axing superintendents. While this would be amazing for the education budget in this state, freeing up shitloads of cash to actually, you know, educate kids, there's no way it will happen. There's too many people with a vested interest in having as many districts as possible. You'll see districts being split up even further before you seem them being merged together.
But blame it on racism, in a state where "as of 2011, 56.4% of New Jersey's population younger than age 1 were minorities(note: children born to white hispanics are counted as minority group)", according to Wikipedia. Based on my anecdotal experience, the citizens here have no race-based aversion against merging districts. I'm not sure how being in the same "district" as a poorly performing school (or "blacks", as you suggest) would have any impact on anything. I mean, they're already in the same "state" as these undesirable schools, sometimes in the same "county", and yet things keep chugging along just fine. I'm not sure why people would think that rearranging administrative boundaries would have any actual impact on their own town's schools. If anything, having your district include shittier inner-city schools could be a boon to you, as districts with the poorest-performing schools are the ones that get the lions share of the funding.
Really, you're looking at this from the wrong angle. You're looking at it as an outsider, as a citizen not directly involved in the education industry here. I can tell you that there are only two groups of people that have significant sway when it comes to education-related issues in NJ: the teachers [union], and the old people [that don't want to pay property taxes for education services they don't personally need]. They're the ones that go battle at the polls. They're the ones that actually get policy crafted. They're the reason we spend close to $100M every year on school district superintendents alone. I can assure you, there is no organized racist movement to keep districts from being consolidated.
Chuuch. Preach. Tabernacle.
No, you overgeneralize. The problem is that Amazon charges a flat fee including both shipping and handling. Read the description of the law again. If Amazon charged for the actual shipping cost, separate from handling or item price, the shipping would not be taxed. But since Amazon charges a flat fee -- which is how the penny sales weasels manage to make money, on the $3.99 flat S/H fee -- it is taxed to be on the safe side.
"In such mixed transactions, if the seller does not allocate the delivery charge, the entire delivery charge is taxable."
Amazon sure won't be changing to a more complicated system used by some other retailers where the actual shipping cost is stated in the bill; and it would be difficult to apply where Amazon associates are doing the shipping, instead of Amazon.
They could simplify the whole thing by just not charging tax at all.
Obviously, people in power will do things to keep themselves enriched and in power, but they have to justify it to the voters somehow. Telling them "we need more highly-paid superintendents" isn't going to go over very well. However, telling the people in richer towns that poor kids are going to be bused to their schools, and that their kids are going to be bused to schools in the ghetto town on the other side of the county, WILL cause them to vote against consolidation. It doesn't matter much what the percentage of minorities is: minorities in city A don't get to vote in rich town B's elections because they don't live there. (Moreover, minorities tend not to vote nearly as much anyway.)
I'm not sure how being in the same "district" as a poorly performing school (or "blacks", as you suggest) would have any impact on anything. I mean, they're already in the same "state" as these undesirable schools, sometimes in the same "county", and yet things keep chugging along just fine.
Of course they do, because they're in entirely separate school districts, so it's no different than being in a different state. By having different districts, funding for school(s) in one district have no effect on the funding on school(s) in another district. So rich white people don't have to worry about their property taxes being used to fund minorities in another part of the county or state.
If anything, having your district include shittier inner-city schools could be a boon to you, as districts with the poorest-performing schools are the ones that get the lions share of the funding.
No, they don't. Property taxes only go to fund the school in the district those property taxes come from. So rich neighborhoods, with high property tax revenues (because of the high house values there) keep all their money and pour it into their own schools, while poor neighborhoods in a poor district in the same county have to make-do with much lower funding since the property values in the ghetto are very low and consequently property tax revenues per capita are much lower. It doesn't help that rich people tend to have far fewer kids than poor people, so that's even more funding per child in the rich districts than the poor districts. The poor districts might get some Federal funding to help out, but it's probably still nowhere near the per-capita funding that the rich kids get.
It's not an "organized racist movement", but then again neither is "white flight", it's just richer people working and voting to keep themselves separate from poorer people, and these divisions are usually along racial lines since minorities tend to be much poorer (making it completely impossible to really tell how much racism is involved versus simple classism but it's usually safe to assume a certain level of it).
No, they don't. Property taxes only go to fund the school in the district those property taxes come from. So rich neighborhoods, with high property tax revenues (because of the high house values there) keep all their money and pour it into their own schools, while poor neighborhoods in a poor district in the same county have to make-do with much lower funding since the property values in the ghetto are very low and consequently property tax revenues per capita are much lower.
Right, you'd think that, because it makes sense. But you'd be wrong. While some wealthier areas do in fact spend more per pupil, you'll see that Newark spends 28% more per pupil than the average. In case you haven't been there, Newark isn't exactly a "rich neighborhood". If you look at that map, you'll notice that some of the highest per-pupil spending happens in the urban areas (where, as you might imagine, outcomes are below average).
The fact of the matter is that our worst-performing, poorest districts are the ones that have some of the highest spending per pupil. The federal and state funding that these shithole districts get does in fact rival and in many cases dwarf the per-pupil funding that property taxes generate. This only further shows that while you can simply throw money at the problem, that approach is not guaranteed to produce desirable results.
Chuuch. Preach. Tabernacle.
If Amazon charged for the actual shipping cost, separate from handling or item price, the shipping would not be taxed.
How'd you work that out?
For transactions occurring on or after October 1, 2005, handling charges are included within the definition of delivery charges
For deliveries on and after October 1, 2006, if a shipment includes both taxable and exempt property, the seller should allocate the delivery charge based on either the total sales price or the total weight, and collect tax on the portion of the delivery charge allocated to the taxable goods. In such mixed transactions, if the seller does not allocate the delivery charge, the entire delivery charge is taxable.
systemd is Roko's Basilisk.