Why SHOULD Amazon have to pay sales taxes in states they don't operate?

[fskimospy]

Sales taxes exist, but it's an issue between the state and the people. The people are supposed to report and pay applicable taxes. Some states are trying to put the onus on the vendor to collect taxes for that state, even though the vendor has no nexus in that state and as such is not responsible for collecting those taxes.

And we all know that it is de facto unenforceable, that's why the tax law needs to get changed.

Not sure what is so tough about this.

 

[soulcougher73]

Collecting a sales tax will effectively increase Amazon's prices by over 8%, this going to greatly decrease the amount of business Amazon does and hence lowering their revenue & profits.

Oh well. Your a business you gotta collect taxes. Its just the way it needs to be.

 

[soulcougher73]

Huh? Am I missing something? Amazon doesn't pay sales tax to any state. Some states want them to collect sales taxes for them, and Amazon has correctly told them to get lost. If they don't have a real presence in the state they shouldn't have to collect anything, the state needs to collect it from their people.

Also, if you go to another state and buy something, you'd still have to pay sales taxes in your own state (use taxes). It's just rarely done because there's no easy enforcement mechanism.

Then Amazon needs to stop doing business it states it doesnt have a physical pressence in to make this a fair fight. Just because you are internet based should not give you any special priviledges.

 

[PokerGuy]

They can collect the tax for whatever state the buyer is from.

No, that's not what the law says. They don't have to collect for states if they don't have a legal presence there. Why would amazon want to keep track of and collect for sales taxes for every frickin' jurisdiction in the US that has different rates on different kinds of items? It's a nightmare trying to keep up with thousands of tax rates and codes.

It's up to the state to collect the taxes from the buyers. The buyers breaking the law when they don't report their purchases from out of state and pay use tax on them.

 

[matt0611]

It's still a hell of a lot cheaper to buy most things online than it is at B&M stores. Online retailers can cut a TON of overhead.

Well yes that's also true. But not paying an 8% sales tax is quite a nice bonus as well.

 

[xj0hnx]

No, that's not what the law says. They don't have to collect for states if they don't have a legal presence there. Why would amazon want to keep track of and collect for sales taxes for every frickin' jurisdiction in the US that has different rates on different kinds of items? It's a nightmare trying to keep up with thousands of tax rates and codes.

It's up to the state to collect the taxes from the buyers. The buyers breaking the law when they don't report their purchases from out of state and pay use tax on them.

Most business software has this built in.

 

[PokerGuy]

Then Amazon needs to stop doing business it states it doesnt have a physical pressence in to make this a fair fight. Just because you are internet based should not give you any special priviledges.

That's fine and dandy as an opinion, but again, that's not what the law says.

Besides, it makes no sense. See my earlier post. Are you going to have every internet vendor, no matter how small or large try to figure out and keep up with every tax rate in every county/city/municipality/township across the country? With different rates applying to different products, some products being exempt in some states etc etc etc? What about vendors based outside the US? You think they should also keep track of all those different kinds of taxes? Again, makes no sense. The state should collect from their citizens.

 

[xj0hnx]

Well yes that's also true. But not paying an 8% sales tax is quite a nice bonus as well.

It's a great bonus, but the reason I don't buy a motherboard at my local computer shop versus Newegg isn't the taxes, it's the fact that they charge $250 for a $150 motherboard. Their margins are a lot thinner.

 

[Linflas]

Because they are providing a service that anyone in any state can use. You buy something you pay taxes. Its just that simple. They can collect the tax for whatever state the buyer is from.

Why should they be treated any differently than any B&M store when it comes to this? That is the whole idea behind the requirement for them to have a physical business presence in a state before they can be required to collect a sales tax. It is really no different than me driving to a neighboring state that does not have a sales tax and purchasing an item. Most states expect their citizens to voluntarily report such transactions at the end of the year and we all know just how many actually do that. If Amazon can be forced to act as a tax collector with all the accompanying overhead for any state regardless of whether they actually operate in that state or not then what is to stop the next logical step of requiring any B&M retailer from identifying and collecting sales tax from customer based on their state of residence?

 

[soulcougher73]

No, that's not what the law says. They don't have to collect for states if they don't have a legal presence there. Why would amazon want to keep track of and collect for sales taxes for every frickin' jurisdiction in the US that has different rates on different kinds of items? It's a nightmare trying to keep up with thousands of tax rates and codes.

It's up to the state to collect the taxes from the buyers. The buyers breaking the law when they don't report their purchases from out of state and pay use tax on them.

Maybe we can create a new law that internet based businesses that sell items can have whatever the national average tax rate is. Would make it easier on them if that is the problem. I just looked over the numbers for each state and id guess the average is 5% off the top of my head.

 

[fskimospy]

That's fine and dandy as an opinion, but again, that's not what the law says.

Besides, it makes no sense. See my earlier post. Are you going to have every internet vendor, no matter how small or large try to figure out and keep up with every tax rate in every county/city/municipality/township across the country? With different rates applying to different products, some products being exempt in some states etc etc etc? What about vendors based outside the US? You think they should also keep track of all those different kinds of taxes? Again, makes no sense. The state should collect from their citizens.

And how is the state possibly supposed to keep track of all this? It makes no sense.

 

[PokerGuy]

Most business software has this built in.

Doubtful that it has everything for every jurisdiction, and you're assuming that every vendor on the internet uses such software. What about small mom-and-pop online vendors? You're thinking on the scale of Amazon, but what about small shops?

 

[PokerGuy]

And how is the state possibly supposed to keep track of all this? It makes no sense.

You don't think the state can keep track of their own tax rates?? WFT?

 

[fskimospy]

Maybe we can create a new law and internet based businesses that sell items can have whatever the national average tax rate is. Would make it easier on them if that is the problem. I just looked over the numbers for each state and id guess the average is 5% off the top of my head.

This is an obvious and good solution, and therefore it will be ignored.

 

[xj0hnx]

Doubtful that it has everything for every jurisdiction, and you're assuming that every vendor on the internet uses such software. What about small mom-and-pop online vendors? You're thinking on the scale of Amazon, but what about small shops?

We have six employees and ours does it, updates itself and everything.

 

[fskimospy]

You don't think the state can keep track of their own tax rates?? WFT?

I don't think the state can keep track of every purchase made within its borders, as evidenced by the fact that states are incapable of enforcing this tax already.

 

[soulcougher73]

That's fine and dandy as an opinion, but again, that's not what the law says.

Besides, it makes no sense. See my earlier post. Are you going to have every internet vendor, no matter how small or large try to figure out and keep up with every tax rate in every county/city/municipality/township across the country? With different rates applying to different products, some products being exempt in some states etc etc etc? What about vendors based outside the US? You think they should also keep track of all those different kinds of taxes? Again, makes no sense. The state should collect from their citizens.

I would assume there is software for this. But if there is not than something needs to be done. What you are proposing with the states should collect the money is even less probable than Amazon having software to automatically do this. And i dont think we are arguing the actual law. We are arguing what the law should be. Obviously we all realize the current law is lame.

 

[her209]

The claim that Amazon has no physical presence in a state is bogus and based on loopholes in corporate tax code and structure. If Amazon truly doesn't have a presence in a state, then its fine that they don't collect sales tax.

 

[PokerGuy]

if a vendor operates in a particular state (ie, not just mail a package to that state, but actually operate in it), there is a fair expectation that the vendor know and abide by the local laws and tax rates. You can't expect every vendor on the internet to be able to keep track of all the thousands of codes and regs from around the country.

Lets not forget international vendors. You think they're going to collect taxes for US states? Not a chance.

 

[etrigan420]

And how is the state possibly supposed to keep track of all this? It makes no sense.

Especially if we're "cutting Gub'ment spending". :sneaky:

An across the board "Internet Sales Tax" seems to be the only solution.

 

[PokerGuy]

We have six employees and ours does it, updates itself and everything.

That's great for you, but irrelevant. The onus should not be on the vendor to be the tax collector for a state where the vendor has no presence. That's the law.

 

[xj0hnx]

if a vendor operates in a particular state (ie, not just mail a package to that state, but actually operate in it), there is a fair expectation that the vendor know and abide by the local laws and tax rates. You can't expect every vendor on the internet to be able to keep track of all the thousands of codes and regs from around the country.

Lets not forget international vendors. You think they're going to collect taxes for US states? Not a chance.

Why do you keep saying "thousands"? Most counties, and cities have the same sales tax as their state.

 

[PokerGuy]

I don't think the state can keep track of every purchase made within its borders, as evidenced by the fact that states are incapable of enforcing this tax already.

And how is that the problem of some internet vendor? Collecting revenue that the state is due is the state's problem.

 

[ProfJohn]

The claim that Amazon has no physical presence in a state is bogus and based on loopholes in corporate tax code and structure. If Amazon truly doesn't have a presence in a state, then its fine that they don't collect sales tax.

How so?

If they don't have any buildings and no employees in a state then they have no presence. Does Amazon operate in all 50 states?

 

[xj0hnx]

That's great for you, but irrelevant. The onus should not be on the vendor to be the tax collector for a state where the vendor has no presence. That's the law.

So you say it's not possible for a small business to keep up with these "thousands" of rates, I say that the software can, and already does it, and now it's irrelevant? Talk about moving the goal post.