looks like amazon changed their mind about online taxes

[ultimatebob]

I agree. At this point online shopping is so mainstream, that the lack of taxation is causing non-online shops to suffer.

I like this exception:

"Retailers that take in less than $500,000 in total remote sales each year would be exempt."

That still allows small online businesses a chance to succeed, which otherwise would not exist as a brick and morter store.

I do theorize that if this passes, we will quickly see a surge in pyramid/mlm online businesses as a loophole. Although that's a plus if it gets people employed.

Heh... I wonder how many big companies will create spinoff LLC's to take advantage of that sub 500,000 tax loophole.

 

[TheTony]

Agreed. This should have happened ten years ago, and is easy to implement. Just track on billing address--I could create a piece of software capable of tracking that.

Not saying this is undoable. However, it's far from simple. Many counties/municipalities have their own fractional tax surcharge, and many states have exempt items that are tax-free (clothing is one example). Additionally, with all of these fractional rates on top of the state rate, in many cases there is no easy way (ie a state-level clearinghouse) for retailers to direct those payments to. As I understand it, this stipulation is part of the current legislation that Amazon has agreed to support, in addition to keeping the rate structure simple (but not 100% locale accurate).

Even after this legislation passes, if it does, retailers will not need to collect the tax unless the state that is requesting it has met the requirements of the federal legislation.

I am a little amused at the quotes I've seen from this debate that suggest that small business will be better equipped to compete because of this. There is certainly a fairness issue to consider, but that isn't part of it. It's large B&M retailers with ubiquitious retail presence that have the most to gain from this (as well as the states with increased revenues). Small businesses already can expand their reach greatly online (whether they choose to or not) and also compete with the same large B&M retailers who have likely more immediate impact on them locally. In fact, one way to do that would be to be an affiliate of a larger online retailer like Amazon. This makes me wonder how affiliates will be treated legally, under this leglislation (do they pay because they're affiliated to a retailer who is subject?).

 

[PokerGuy]

Time to stop shopping Amazon I guess, there are plenty of retailers that won't do this.

 

[DrPizza]

What happened to the counterargument about use taxes being unconstitutional to begin with? I haven't been following this much, but that was the last take-home message for me..

I used to think that, and wish I remembered the explanation. But no, they're not unconstitutional.