Every Day's a Tax Holiday At Amazon 377
theodp writes "With Black Friday here, Slate's Farhad Manjoo reminds readers of how Amazon.com undersells Best Buy, the Apple store, and almost everybody else. Read his lips: no sales taxes. Unless you live in KS, KY, NY, ND, or WA, you'll pay no sales tax on many purchases from Amazon, giving Amazon a huge — and largely hidden — price advantage over most other national retailers. Amazon CEO Jeff Bezos is certainly no fan of taxes — he explored founding Amazon on an Indian reservation, and recently ponied up $100,000 to defeat a proposed WA state income tax, a good investment for someone who's cashed in close to $800,000,000 in Amazon stock this year alone. So, is Amazon's tax-free status unfair? Of course it is, says Manjoo. Amazon has physical operations in 17 states in which the company and its employees enjoy the fruits of local taxes — police and fire protection, roads, hospitals, and other infrastructure that make its operations possible. Yet Amazon skirts tax collection in most of these places through clever legal tricks."
There is always (Score:5, Interesting)
I live in a state that requires me to report anything I bought outside the state or online via a USE tax. I'm waiting for someone to buy something but never use it and let the state prosecute. them. I bet that stupid voluntary use tax would be dropped post haste.
Re:Shipping Costs, Etc. (Score:5, Interesting)
The sales tax is a whole different matter, it does create an unfair advantage because Amazon just shifts responsibility for the tax to the end customer. It has to be payed anyway they just don't because, supposedly, it's a hassle to figure out to who... It's tax-evasion and the larger the company the more accepted it is... It has come to the point that the largest companies with the greatest income pay the least amount of tax (percentage that is), that is the underlying unfair advantage that will eventually result in monopolies.
Smaller companies pay more tax => Unfair advantage for the big companies => Monopolies in the long run => The bill for the customer (whether in money, service or quality)...
Re:Go after those who purchase from Amazon instead (Score:1, Interesting)
Or, Amazon can pay sales takes. It has the ability to do so. This is just another example of a massive corp walking on everyone.
I personally don't give a shit what state Amazon is in, if they want to sell everywhere, they can act like it and pay taxes.
Of course, no one intelligent buys from Amazon anymore ... mostly because it would appear that they don't sell shit, their affiliates do. Amazon has basically become a middle man squeezing every drop out of everyone. There business is unstainable long term. Well, thats not entirely true, there will be a continuous stream of idiots to continue to buy from them, but I suspect that is a much smaller number than they currently enjoy.
Re:Go after those who purchase from Amazon instead (Score:1, Interesting)
I find amazon very convenient.
Also : amazon has no duty to states that it's customers happen to live in.
Pay your own damn taxes, don't expect others to do it for you.
Unfair Advantage? (Score:3, Interesting)
Re:Technically true, does it explain pricing? (Score:4, Interesting)
I live in New Jersey where I "enjoy" a 7% sales tax on NewEgg orders for the last 5 years or so since they built the Edisson warehouse.... they're still cheaper than anywhere else. You're completely right that it's not a factor. On top of that, most of my orders arrive NEXT DAY, even when I take the free shipping options that are supposed to be 3-5 days and NewEgg's support has always been nice to me for close to 10 years now. That is the reason I keep coming back.
Re:Shipping Costs, Etc. (Score:4, Interesting)
It has to be payed anyway they just don't because, supposedly, it's a hassle to figure out to who... It's tax-evasion and the larger the company the more accepted it is...
No, it is called the interstate commerce clause. You know, that clause of the constitution that usually causes people to pay more in taxes and deal with more government intrusion. It turns out that in this particular case it makes sales taxes on items purchased in other states illegal, which is why you don't have to pay tax on purchases across state lines.
Now, states do try to charge a "use tax" on items purchased in other states. This is of course flagrantly in violation of the constitution since it is just another name for a sales tax, and you have to pay it even if you never use the purchased item. However, courts have upheld it, and so you could potentially be punished for not paying this unconstitutional tax, assuming somebody manages to figure out how to bill you for it and survives the backlash.
Re:Bait and switch (Score:5, Interesting)
Oddly enough, it's not that simple. For the US Federal Government, Treasury Notes are still one of the safest forms of debt to own, even though the US is obviously holding a huge debt. The reason has more to do with the risk of the US defaulting versus their ability to tax and/or grow their way out of debt. Meanwhile, a state like California has suffered from junk bond status on its debt because US states can default on their debt and California has anal laws when it comes to raising taxes yet trivial laws for increasing spending; ironically enough, California like most states has to balance its budget (ie, have no net debt*) every year (or few years, I'm not entirely sure which) so it'd seem to be much safer in the short term.
Yea, that'd be the fault of voters. People say "cut spending", elect politicians on a vague platform to deal with the budget (since specifics would leave you unelectable), then turn around and vote out anyone who would actually make the tough choices and cuts spending (since it only takes a few percent of people to swing the vote and people selfishly vote on their own interests). And of course, cutting taxes** is great to get you reelected but it has nothing to do with solving a debt crisis generally.
Two things. One, the Laffer Curve clearly indicates that in fact there's a range of tax rates that increasing the tax rate will result in greater tax revenue until a point; after that, tax revenue does go down. The evidence would seem to indicate the effective tax rate where tax revenue drops off is close to 50%. Two, I don't think anyone believes government should intrinsically work to maximize tax revenue; it just happens that voters keep electing for spending and that inherently requires more tax revenue to pay off.
Perhaps in part, yes. However, the standard nd cost of living in the US (and hence the inherent minimum wage) is larger than many other countries regardless of taxes, regulation, etc; hence if the product can be shipped and shipping is cheap, then businesses will sanely offshore as much as they can. Meanwhile, sufficient demand for goods eventually raises the standard and cost of living in offshored-work countries (presuming they're capitalistic) and the value of US goods to trade (or more precisely US currency which represents the ability to buy US goods) lowers in value resulting in US goods being more attractive to produce and export.
Of course, we have various regulations for a reason (for example, we don't like China-quality air in our cities) and people and businesses are often unwilling to move given the risks, hardship, and general dislike to leave what they view as home; besides businesses and effectively be in multiple countries at once. Let's not forget that California, even with its repetitive debt crisis, frequently mocked heavy-handed regulation, etc has the 8th largest economy of the world and represents 13% of US GDP and has about ~12.3% of the US population. So, it has slightly more GDP than one would expect for its population size and it has a large percentage of the US population even though it is trivial to move in the
Re:indirect taxes are important (Score:4, Interesting)
"You get less choice when you buy stuff online" Whaaaaat?
The internet will trend toward monopoly. Even though it seems like the perfect 'entry-level' system, large companies can negotiate with suppliers to achieve prices that a smaller company cannot match. The smaller company will operate on smaller margins until the larger company can match or beat those margins (Automation, etc).
Even things with no tangible products are susceptible. Think of something like facebook. The market share is so large that it becomes the market. You can't really compete with these companies unless you offer a substantially better product and almost rise to popularity overnight.
Our current system HAS competition, but I don't see anything really preventing the competition from evaporating as time passes. All trends seem to point toward monopoly. (Except home run at-cost ventures for things like email or basic services)
... and why is there free shipping? (Score:3, Interesting)
Amazon refused to charge us the (so far) totally optional advertising tax that the all the other retailers in the article are charging us for. I don't know if Amazon has changed there (low/no) advertising policy since then but I don't remember ever being inundated with Amazon ads. IMO advertising is an unnecessary evil. For me, getting free shipping and fewer ads is a win-win.
Re:Taxation without representation (Score:4, Interesting)
That isn't the issue here. If you read the article summary, the issue is Amazon not collecting sales takes in states where they actually operate and have employees.
They're doing that via some ridiculous loopholes, which I'm surprised actually stand up to scrutiny. The main one is that they claim many of their warehouses aren't actually "Amazon" warehouses, and the employees aren't "Amazon" employees, because they're owned and operated by subsidiaries. Their Texas operations, for example, are owned and operated by Amazon.com.kydc, Inc., which they assure you is not the same business as Amazon.com, Inc., so they don't collect Texas sales taxes.