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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 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As of October 1, 2006, the exemption for delivery charges imposed by the seller is repealed for taxable goods and services.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.
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.
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
NJ does tax S&H. Amazon is doing it correctly. The submitter is a moron. The reference provided in the summary to "prove" that NJ does not charge tax, actually says exactly the opposite: since 2006 they tax S&H.
"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 didn't actually read much of that page, until I saw your post. Then, I did a search for "shipping" on the page, and read everything that got highlighted. You're right - reading helps people to avoid making idiot posts!!
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I am somewhat confused. I thought only filthy free market capitalists wanted to pay lower taxes.
As a fithy free market capitalist (FFMC), let me chime in. We FFMCs do indeed believe in lower taxes, but we also believe in sensible taxes. Taxes should be simple, fair, difficult to avoid, and should not inhibit economic growth and prosperity. So taxes on income and labor and the worst, taxes on revenue are better, taxes on property or consumption are better still, and taxes on things you want to discourage are the best of all. If you look at the things we tax in America, it would be difficult to design a dumber tax system. Most taxes are on production or profits (income tax and payroll tax), and we have some of the lowest consumption taxes in the developed world. So we end up with millions unemployed at the same time we run up trillions in deficits because we don't produce enough to satisfy our consumption levels. That is a symptom of a broken system. Unfortunately, sensible tax reform isn't even on the political horizon.
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?
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