her209
No Lifer
- Oct 11, 2000
- 56,336
- 11
- 0
Drako
Lifer
- Jun 9, 2007
- 10,697
- 161
- 106
werepossum
Elite Member
- Jul 10, 2006
- 29,873
- 463
- 126
Sure looks like it to me.
I'm in Tennessee, and we use sales tax as our primary state revenue source. So I'm happy to pay sales tax because it helps stave off a state income tax. This is one of the reasons I preferentially buy from NewEgg over Amazon even when the latter is lower. Now however Amazon is building warehouses in Tennessee, so I assume they will start collecting Tennessee sales tax - although it's possible that Amazon negotiated a sales tax exemption with the state to lure them here.
Personally I pretty much come down on California's side, since an online retailer does rely on roads and other infrastructure provided by the state. Why should B&M retailers subsidize their online competition? I can however see the extreme difficulty for an online retailer to comply with the changing sales tax rates and rules for fifty states and various territories, not to mention the multiplicity of individual counties and cities with differing rates. It's a nightmare, I'm sure.
Thump553
Lifer
- Jun 2, 2000
- 12,839
- 2,625
- 136
Amazon is doing the exact same thing, for the exact same reason, right now in CT. And, if I'm not mistaken they have also done this in NY and quite a few other states.
Much as I love Amazon as a consumer, we are at least a decade beyond the time when we had to incubate internet sellers by essentially exempting them from sales tax (yeah I know the tired old argument that consumers are supposed to report use taxes on their own, but we all know how well that works). Internet sellers are now killing off all kinds of mom and pop retailers-try opening a camping goods store, sneaker store, etc. these days-you are essentially used as an unpaid showroom for people pricing the goods on the internet.
We are sorely in need of comprehensive FEDERAL legislation imposing local sales taxes on all internet sales in the US. This would take both parties dropping doctrinaire positions (GOP against all "new" taxes, the Dems as it would short term hurt middle class consumers) but it would go a long way towards rebuilding new jobs in the US.
And perhaps it's time for a consumer blacklash boycotting Amazon for their bullying tactics.
Much as I love Amazon as a consumer, we are at least a decade beyond the time when we had to incubate internet sellers by essentially exempting them from sales tax (yeah I know the tired old argument that consumers are supposed to report use taxes on their own, but we all know how well that works). Internet sellers are now killing off all kinds of mom and pop retailers-try opening a camping goods store, sneaker store, etc. these days-you are essentially used as an unpaid showroom for people pricing the goods on the internet.
We are sorely in need of comprehensive FEDERAL legislation imposing local sales taxes on all internet sales in the US. This would take both parties dropping doctrinaire positions (GOP against all "new" taxes, the Dems as it would short term hurt middle class consumers) but it would go a long way towards rebuilding new jobs in the US.
And perhaps it's time for a consumer blacklash boycotting Amazon for their bullying tactics.
wait, i was told here that lowering corporate taxes does nothing for job creation.
was i lied to?
if retailers with B&M stores in multiple states like best buy, walmart, target, etc. do it all the time, i don't see why it would be any more difficult for an online retailer.
theeedude
Lifer
- Feb 5, 2006
- 35,787
- 6,197
- 126
Yep, red states are a bunch of leeches and welfare queens. Everyone but the red staters know this.
Brainonska511
Lifer
- Dec 10, 2005
- 29,317
- 14,773
- 136
They don't have to do it on their own. Services exist (which national B&M chains already utilize) to figure out the sales tax laws.
As for the sales tax exemption (if it was that way in TN), that's bogus. Amazon isn't the entity paying it, it's the purchasers that pay it, Amazon would merely be the collecting and remitting agent.
As for the 'affilliates' don't constitute a presence nonsense - that's just a semantics game. In Texas, they had a wholly owned subsidiary warehouse; according to Amazon, that's an affiliate and doesn't constitute an nexus
. Or they're paying people in states to work as advertising agents - those are 'affiliates' according to Amazon and not 'employees' or a nexus.... Even with the sales tax (which you're legally supposed to pay anyway), it's almost always cheaper to buy online. Oh no! I have to pay some taxes! The HORROR. Government services are not free.
Make up your mind Spidey: if you want small Federal government, your state will pick up more of the slack. You may want less "government" (what a nebulous concept), but I'd wager that most don't want Anarchist420's vision of society.
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sactoking
Diamond Member
- Sep 24, 2007
- 7,650
- 2,925
- 136
As I said in a similar thread:
Let's be honest here. While states like California, Texas, Illinois, and North Carolina may be playing heavy-handed, it's not like Amazon is without fault. They purposely use the "affiliate" model as an excuse to avoid collecting legally-owed taxes. What do I mean?
Take Nevada. Amazon has no physical presence in Nevada so there is no sales tax collected. Yet just outside Reno there is a GIGANTIC Amazon warehouse. There is a ton of merchandise shipped all over the west coast daily from Reno. The warehouse hires hundreds of seasonal workers every October-December. The warehouse is branded "Amazon". Seasonal employees are hired by "Amazon". Billboards advertise it as "Amazon". Yet somehow Amazon has no 'physical presence' and no nexus in Nevada?
Amazon has classified the warehouse as an "affiliate warehouse". The company claims that even though it's branded as theirs, employees are theirs, advertisements are theirs, etc. that none of the merchandise is theirs so technically the warehouse isn't theirs. It's a complete bullshit argument. It's also counter to the argument posited in California. In California, affiliates just provide referrals, but in Nevada affiliates have a 300,000 sq ft warehouse full of merchandise?
Liar liar, pants on fire.
No, it won't. The SC ruling that Jeff Bezos loves to cite states that States cannot tax internet sales without "nexus". There are two ways around this:
1. More clearly define "nexus". Nexus hasn't been adequately defined legislatively. Through case law it has come to mean "physical presence", but even that is ambiguous (see above). If "nexus" were given a targeted definition it could be moulded to allow more state collection.
2. The ruling does not prevent the Federal gov't from collecting internet sales tax as interstate commerce. Traditionally the Fed has not wanted to bother b/c state tax rates vary widely within the state. However (as I've pointed out many times in related threads), Congress and the Fed have promised that if enough states sign the Uniform Sales and Use Tax Compact, which would equalize sales tax rates throughout a state, the Fed will step in and collect the taxes and disseminate them to the states for a small fee. As of a few months ago more than half the states had signed or committed to signing the Compact, including CA, TX, and NY.
Let's be honest here. While states like California, Texas, Illinois, and North Carolina may be playing heavy-handed, it's not like Amazon is without fault. They purposely use the "affiliate" model as an excuse to avoid collecting legally-owed taxes. What do I mean?
Take Nevada. Amazon has no physical presence in Nevada so there is no sales tax collected. Yet just outside Reno there is a GIGANTIC Amazon warehouse. There is a ton of merchandise shipped all over the west coast daily from Reno. The warehouse hires hundreds of seasonal workers every October-December. The warehouse is branded "Amazon". Seasonal employees are hired by "Amazon". Billboards advertise it as "Amazon". Yet somehow Amazon has no 'physical presence' and no nexus in Nevada?
Amazon has classified the warehouse as an "affiliate warehouse". The company claims that even though it's branded as theirs, employees are theirs, advertisements are theirs, etc. that none of the merchandise is theirs so technically the warehouse isn't theirs. It's a complete bullshit argument. It's also counter to the argument posited in California. In California, affiliates just provide referrals, but in Nevada affiliates have a 300,000 sq ft warehouse full of merchandise?
Liar liar, pants on fire.
No, it won't. The SC ruling that Jeff Bezos loves to cite states that States cannot tax internet sales without "nexus". There are two ways around this:
1. More clearly define "nexus". Nexus hasn't been adequately defined legislatively. Through case law it has come to mean "physical presence", but even that is ambiguous (see above). If "nexus" were given a targeted definition it could be moulded to allow more state collection.
2. The ruling does not prevent the Federal gov't from collecting internet sales tax as interstate commerce. Traditionally the Fed has not wanted to bother b/c state tax rates vary widely within the state. However (as I've pointed out many times in related threads), Congress and the Fed have promised that if enough states sign the Uniform Sales and Use Tax Compact, which would equalize sales tax rates throughout a state, the Fed will step in and collect the taxes and disseminate them to the states for a small fee. As of a few months ago more than half the states had signed or committed to signing the Compact, including CA, TX, and NY.
werepossum
Elite Member
- Jul 10, 2006
- 29,873
- 463
- 126
Yes.
B&M retailers have a few stores; even Wally World doesn't exceed perhaps one store per 25,000 consumers. Online retailers would have to comply with every county and city sales tax into which they might deliver - effectively every jurisdiction in the state. However, you make a good point. Online retailers paying only the state portion of the sales tax would probably make a decent compromise. If they must slightly raise prices to cover the costs, it is as you say, no different from Target or Best Buy or other national businesses.
One thing though - those saying California is boning itself is probably correct. Amazon is breaking its business relationships with all California-based advertising agencies in order to avoid collecting sales tax. That means those companies will either no longer earn that revenue, or will relocate outside of California. In either case, the corporate income tax that would have been paid will be lost, as will the taxes that would have been paid as that money made its way through California, and more people will be without jobs. The net result to California will most likely be negative.
ok, how about chain grocery stores, supermarkets, fast food joints?
there's one of those in every town. over here, i probably have 3 shop rites within a 10 mile radius.
so what you're saying is if we lower taxes, it makes it more attractive for businesses to set up shop there, which in turn creates more jobs and generates more tax revenue and stimulates economic growth?
why haven't those elected to office thought of this yet? in fact, why do i hear more cry to raise corporate taxes?
does the opposite hold true? e.g. raise taxes, forces businesses to close/move, jobs lost, tax revenue decreased?
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Mr. Lennon
Diamond Member
- Jul 2, 2004
- 3,492
- 1
- 81
Depends. Without knowing how they set that up, it might be "Amazon AWS Inc." which then leases server space to "amazon.com inc." which technically means no, they don't have physical nexus. Whether that is true/ethical/gaming the system I have no idea.
her209
No Lifer
- Oct 11, 2000
- 56,336
- 11
- 0
lord_emperor
Golden Member
- Nov 4, 2009
- 1,380
- 1
- 0
I think so too, but it is not going to happen TODAY. Moreover, people will continue to not pay Use tax on their 1040s nor will their non-compliance be enforced TODAY, which will ultimately hurt CA's effort to grow jobs and derive more revenue TODAY. So net net, it is a loss to CA and Amazon and everyone else knows this.
How does the state know how much you spenton Amazon and every other internet retailer to know what use tax you owe? What percent of taxpayers pay the use tax?
ProfJohn
Lifer
- Jul 28, 2006
- 18,161
- 7
- 0
They are suppose to be.
If you bought something on-line and didn't send your state the sales tax you are breaking the law.
Right, and as we already covered, basically no one does this. In effect the overwhelming majority of internet purchases are not subject to sales tax.
Yes, it's not easy to do such a boycott, but it seems like a good idea. I'm considering doing it now - I've already sent a message to their management on the issue.
But probably a legislative solution of some sort might be more effective. Luckily, there's a lobby to help with that - the B&M stores.
What is your plan to address a 98% non-compliance rate with the law the the government can't tell is being broken?
You show them your receipt. Not any different than when you claim charity donations.
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