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Amazon Pulling Out of Texas Over $269 Million Tax Bill 811

Posted by Soulskill
from the not-a-reliable-method dept.
ralphart writes with this excerpt from the Dallas Morning News: "As a result of an ongoing tax dispute with Texas, Amazon.com has decided to take its ball and go home. The online retailer said Thursday that it would shutter its Irving distribution facility April 12 and cancel plans to hire as many as 1,000 additional workers rather than pay Texas what the state says is owed in uncollected sales tax. Texas wants $269 million from Seattle-based Amazon in past-due sales tax. It sent the bill to the company last October." We've discussed the online retailer's tax battles with other states in the past.
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Amazon Pulling Out of Texas Over $269 Million Tax Bill

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  • Texas Budget Deficit (Score:5, Interesting)

    by eldavojohn (898314) * <eldavojohn AT gmail DOT com> on Friday February 11, 2011 @12:28PM (#35176544) Journal
    While they're by no means the only state with budget problems, it is kind of coincidental that we're seeing this from Texas in the midst of a budget deficit [kwtx.com]. With $10 billion in lost revenue, they're starting to get creative [bloomberg.com] like demanding university offer a $10k bachelors degree. Oh the abuse of the educational system, both lower and higher education. It's probably going to come down to just cuts across the board [digitaljournal.com]. My friends from Texas have often bragged about it but Texas doesn't have income tax so it's sort of asking a lot to do all this on 6.25% sales tax. You can make promises like "no new taxes" and "more tax cuts" but it looks like they'll run Amazon out of town on this one. Well, they were right that taxes hurt businesses! Bye bye Amazon!
    • by tthomas48 (180798)

      Meh. This isn't an onerous business tax. Pretty much all states have this tax. You have a physical presence in the state you pay sales tax. Dell does it. I have no clue why Amazon thought they could skirt it.

      • by FtDFtM (873257) * on Friday February 11, 2011 @12:59PM (#35177094)
        Texas is after sales taxes from before Amazon came to the state.
      • by swfranklin (578324) on Friday February 11, 2011 @01:03PM (#35177178) Journal

        Companies don't PAY sales tax, they COLLECT it. The people in Texas that order from Internet retailers like Amazon are the ones who pay, or don't pay, sales tax. Amazon just collects the tax from the customer, and then pays it to Texas.

        One difficulty is that if a Texas consumer wants to buy an item online, and they pay sales tax when ordering it from Amazon.com but not tax if ordering from (e.g.) buy.com, then Amazon will lose business. So it's in Amazon's best interests to NOT collect sales tax from Texas customers if they can avoid it.

        There is no clear answer here. On the one hand, you have the Streamlined Sales Tax movement (http://www.streamlinedsalestax.org/) that is trying to enact legislation in as many states as possible requiring retailers to collect tax from customers, regardless of whether the retailer has a presence in that state. The intent is to "level the playing field" and close the no-tax loophole of ordering from out of state - allowing in-state merchants to compete fairly with out-of-state merchants. If this were enacted, Amazon would collect the tax and so would everyone else - so no one would be at an advantage or disadvantage in that regard.

        That sounds well and fine, but the difficulty is the mechanics involved. Sure, Amazon and Wal-Mart and other big companies can code their web sites & shopping carts to figure out where the customer lives, and collect sales tax appropriately. The problem is that setting up a web site to do this is expensive - there are data subscriptions and a lot of coding involved. Over hundreds of thousands or millions of transactions, the cost is minimal. But the effort required by Amazon is really not much different from the effort required from doggiechewtoys.com or any other mom-n-pop operation - except that the little guys don't have the transaction volume to dilute the up-front costs. So it is VERY hard on small businesses to make this kind of change.

        What to do? Beats me.

        • by c6gunner (950153)

          The problem is that setting up a web site to do this is expensive - there are data subscriptions and a lot of coding involved. ...
          What to do? Beats me.

          Create a (federal) government run site to manage sales-tax related data, and offer an API that can easily integrate with all major services. The coding required for individual vendors would be minimal - when the user clicks the "checkout" button, create a connection to the API requesting the most recent applicable tax rates for the customers address, and apply them to the total. Even a script kiddie could slap together the required code in about 5 minutes. Larger sites could store a local cache of the en

          • by JoshRosenbaum (841551) on Friday February 11, 2011 @02:20PM (#35178648) Homepage

            This sounds easy on the outside, but in reality it is not if you are doing it right. (FYI: I have experience adding a third party sales tax vendor (similar to the API you write about) into ecommerce websites.) It definitely does not take 5 minutes and I wouldn't suggest that any script kiddie do it. (You are dealing with real money here.) In the real world, you have to deal with all sorts of things like:
            *) Taxes that vary depending on the type of item being bought. (Meaning you have to make sure your items have the various classifications for all the various laws.)
            *) Need to then deal with crediting taxes on order cancels/returns/changes, which can be even more fun when you are doing it for a split quantity returned.
            *) Error handling when remote API goes down
            *) Validating user inputted address matches up with a valid tax address.
            *) Shipping is taxable for some areas and others not. So again, you get to deal with this headache every time there is an order return or other order changes.

            It's definitely doable, just not near 5 minutes doable and is definitely a cost to be considered by smaller sites.

          • by david_thornley (598059) on Friday February 11, 2011 @02:48PM (#35179130)

            A general site is going to be very complicated, and knowing the sales tax is only part of the problem.

            Sales taxes are not necessarily X% on every sale. Different localities have different rules on what gets taxed and what doesn't, or can vary the taxes depending on the type of merchandise. These taxes can also vary from day to day, as some localities have holidays for particular things. It would be necessary to create a taxonomy of merchandise based on the laws of every state, county, city, metro area, school district, or mosquito control district that collects sales taxes. The job of matching address to taxing entities is also large, but that can be handled at the federal website level, with the caveat that shipments to post office boxes are best effort guess for municipality.

            Once joesobscuremerchandise.com has calculated the taxes, and billed appropriately, Joe owes various entities the taxes he has collected. The paperwork on that alone could be prohibitive for a small site.

            The only thing that would make collecting sales tax feasible for the small business is a massive reform effort to make sales taxes uniform, and that will face a lot of opposition.

    • by Maxo-Texas (864189) on Friday February 11, 2011 @12:45PM (#35176824)

      The tax rate is 8.25% for many of the residents.

      Plus property taxes are about $1,000 per $50,000 home value.

      Our problem is the Perry sucks as governor in the same way Bush did.

      Instead of being a true conservative, he was a spendthrift.

      Dan Patrick (who is too socially conservative for my tastes) *may* be a true fiscal conservative which would be nice.

      • by eap (91469) on Friday February 11, 2011 @02:17PM (#35178600) Journal

        The tax rate is 8.25% for many of the residents.

        Plus property taxes are about $1,000 per $50,000 home value.

        Our problem is the Perry sucks as governor in the same way Bush did.

        Instead of being a true conservative, he was a spendthrift.

        Dan Patrick (who is too socially conservative for my tastes) *may* be a true fiscal conservative which would be nice.

        True, the myth of lower taxes in Texas is false. I moved from Texas to Colorado (generally assumed to be a less conservative place), bought a more expensive house, and make more money, but my overall taxes somehow went down. The services I receive have improved too.

    • by nido (102070) <nido56&yahoo,com> on Friday February 11, 2011 @12:52PM (#35176952) Homepage

      The only state that's NOT having budget problems is North Dakota. Ellen Brown [webofdebt.com] says North Dakota is sitting pretty because they own the Bank of North Dakota [wikipedia.org].

      See How the Nation’s Only State-Owned Bank Became the Envy of Wall Street [motherjones.com].

      All the other states are slaves to their financiers on Wall Street. For example, the City of Phoenix (Arizona) borrowed a billion dollars over the past 5 years to build out the water system. Now the water department wants to raise an extra $24million a year by raising water fees... 'Cause the usury always gets paid first.

      I calculate that the interest charge on a billion dollars a year (at 5%) is $50million. If Arizona owned a bank like North Dakota, the Bank of Arizona would have financed the Phoenix water expansion (at, say, 3%). Most of the $50million the city is now bleeding out to Wall Street would instead be flowing into the state's treasury.

      The financial crisis is easily fixable, with the right solutions. Money and the Crisis of Civilization [realitysandwich.com], and ... Richard Clark's A Bailout for the People [richardccook.com] are also on my recommended reading list.

      • The only state that's NOT having budget problems is North Dakota. Ellen Brown says North Dakota is sitting pretty because they own the Bank of North Dakota.

        And who is Ellen Brown and why should we believe her? (And I note you link not to her - but to an article that lays North Dakota's solvency on an entirely different cause.)
         

        All the other states are slaves to their financiers on Wall Street. For example, the City of Phoenix (Arizona) borrowed a billion dollars over the past 5 years to build out the water system. Now the water department wants to raise an extra $24million a year by raising water fees... 'Cause the usury always gets paid first.

        What does raising more money have to do with having borrowed money? (I.E. correlation is not causation.) That could be just as easily explained by unexpected costs (as is the case with my local water department, heavier than normal winter storms caused damage), or by poor planning (as I've also seen with my local water department).
         

        I calculate that the interest charge on a billion dollars a year (at 5%) is $50million. If Arizona owned a bank like North Dakota, the Bank of Arizona would have financed the Phoenix water expansion (at, say, 3%). Most of the $50million the city is now bleeding out to Wall Street would instead be flowing into the state's treasury.

        Maybe they could have, maybe they couldn't have - interest rates are a function of the cost of the money the bank loans to the water dept, not a function of numbers you've pulled out of your ass.
         

        The financial crisis is easily fixable, with the right solutions. Money and the Crisis of Civilization, and ... Richard Clark's A Bailout for the People are also on my recommended reading list.

        The only interesting thing there is that you didn't link to a gold bug site as well.

    • by Technician (215283) on Friday February 11, 2011 @01:32PM (#35177736)

      Oregon does not have sales tax. They do have an inventory tax. The inventory tax is not only on your product, but on your furnishings and equipment. States to provide incentives to attract businesses. A couple of the largest businesses in the state are Nike and Intel. Nike distributes shoes mostly made overseas. Their inventory is relatively low and their inventory value is relatively low.

      On the other hand, Intel does manufacturing in Oregon as well as a good portion of R & D. If Intel was taxed at the same rate for inventory as Nike, they would not be in Oregon at all. The equipment for manufacturing IC's is several million dollars each. Intel negotiates with Oregon for a break on the inventory tax and brings to the table the rates they pay on other locations such as New Mexico, Ireland, Israel, etc. Oregon is well aware if they didn't offer this incentive, Intel would no longer be in Oregon.

      http://www.oregonlive.com/opinion/index.ssf/2010/10/oregon_intel_inside.html [oregonlive.com]

      Oregon is well aware that Intel contributes way more to the state of Oregon than Nike. Trying to "Tax them fairly" will result in the loss of Intel in Oregon. Intel is by no means getting no taxes. Intel contributes heavily to the local infrastructure and education.

      It sounds to me like Texas has attracted Amazon with a temporary deal and it has expired. Amazon has not been able to extend the deal. Now the party is over.

      Amazon may owe Texas a quarter billion dollars, but this is the last year. They are not remaining as Texas expected them to.
      Texas expected they were too big to fail. Surprise..

    • by I8TheWorm (645702) *

      I remember hearing about this a while back though, and I believe it all actually started before the budget crisis.

      That said, I live in Texas, and am pretty incensed that my state is trying to do the same thing a few other states have to companies that do business on the internet. The end result is they've cost quite a few jobs, meaning they've actually eliminated some tax revenue (no state income tax, but jobless people buy fewer things, so less sales tax). Also, that when I buy something from Amazon it's

    • by AK Marc (707885) on Friday February 11, 2011 @01:41PM (#35177876)
      Rick Perry has been "in power" for more than 10 years now, and this is part of a budget shortfall that requires massive cuts. My question is, why hasn't there been cutting the last 9 years?

      Personally, I think there is a class of Republicans who hate government enough to get in power, purposefully screw up, and force things like this because of the damage they deliberately inflict and then blame on "big government" which they created in the first place. He runs up a bill for billions, then cuts education and social programs left and right, leaving in subsidies for the rich. It wasn't an accident, it wasn't an unforeseen shortfall, it was deliberate sabotage in order to force hard choices while they are in power to remake it in their image.

      Why did Bush push through NCLB? Because he knew that unfunded federal mandates over state matters was the core of the big-government Republican image. He knows that NCLB will shackle school districts, increasing cost and wasting resources. He knows NCLB will harm children all over the country. And he's happy to hurt the children. Why? Because when the education system comes crashing down, the vouchers he really wants will then look like a good idea.

      Not that I'm trying to imply the Democrats are any better. I'm just pointing out the "capitalist" Republicans are massively supporting socialism. Take from everyone and give to the needy businesses (and every business is needy). And the small government Republicans are passing massive sweeping legislation to take away states rights and purposefully harm children to further push taxing everyone to pay for religious schools with direct government funding of religious organizations (as nearly all private schools are religious).

      And for anyone wondering, I was born in TX and lived there under GWB (and a few before him) and left just after (but not because) Rick got the job.
  • Enough of this (Score:5, Insightful)

    by schnikies79 (788746) on Friday February 11, 2011 @12:34PM (#35176636)

    I can't blame Amazon at all for this.

    This whole tax from the state it comes from/tax from the state you live in needs to be decided (federally) and set in stone once and for all. Same goes for who collects it and when.

    • Re:Enough of this (Score:5, Interesting)

      by natehoy (1608657) on Friday February 11, 2011 @12:53PM (#35176980) Journal

      IANAL, but I've done a lot of tax programming for major retailers over the years.

      While I agree that sales taxes are ridiculous and hard and all that, I feel it's important to point out that Amazon actually has a presence in Texas, and therefore when they sell product to Texans they actually do need to be collecting sales tax and remitting it to the State of Texas. This is commonly known as "nexus" in sales/use tax circles. This is what Texas is asking for - sales/use tax from sales to Texans from Amazon (who has a presence in Texas and is therefore subject to the laws of Texas with regards to their sales in Texas).

      If Amazon was being told they needed to collect on behalf of, for example, Maine, they have the absolute right to tell Maine's comptroller to go straight to hell. In fact, as a citizen of Maine, I'd love to be able to listen to that conversation. I'll never be able to tell our comptroller to go to hell, so it'd be great to be able to hear someone else say it.

      Amazon has no presence here in Maine, therefore they have no obligation to follow Maine's regulations surrounding sales/use taxes, which are intrastate law, not interstate. The sales/use tax on things I buy from Amazon is my responsibility to track as a Mainer doing business with a company outside the state, and I owe that money to Maine at the end of the year (and we have a system called "Alternative Use Tax" where I pay a small stipend based on income tax to cover any incidental out-of-state purchases I happen to make if I don't want to track them all, which I use).

      But Amazon has a presence in Texas. In the same way that the company I currently work for has to start collecting and remitting State sales taxes every time we open our first store in each State (or call center, or warehouse, or business office, or whatever), Amazon really does owe that sales tax to the State of Texas, whether they have been collecting it from their customers or not.

      Now, they can certainly choose to pull out of Texas in order to avoid having to collect taxes there, that's within their rights. But they still owe the State of Texas $269 million (plus whatever other sales they make before they finish the pullout), because they were supposed to be collecting that money from their customers who live in Texas for the entire time they've had a presence there.

      Note to Amazon: Please come to Maine. We could use the jobs. I'll happily pay sales tax on purchases made from you.

      • Re:Enough of this (Score:5, Interesting)

        by painandgreed (692585) on Friday February 11, 2011 @02:05PM (#35178352)

        While I agree that sales taxes are ridiculous and hard and all that, I feel it's important to point out that Amazon actually has a presence in Texas, and therefore when they sell product to Texans they actually do need to be collecting sales tax and remitting it to the State of Texas.

        The main issue seems to be that the states are changing the definition of "presence", sometimes seemingly retroactively. It used to be if your headquarters was situated in the state, then people buying from you needed to pay income tax. Then it was if it was shipped from that state. Then if the company had any offices whatsoever, so even if Amazon had some offices serving only internal customers, then they would have to collect tax on everything bought by the state. Now, states like NY and Texas are saying that if any company they are "partners" with are in the state, then the partner company has to collect tax. Amazon hires a company in NY to do some coding, then Amazon has to collect taxes on stuff bought by New Yorkers.

        Really, this is all just mail order and things should have been settled and stabalized with Sears back in the days of the wild west. However, states are looking for more money and changing the agreements and telling companies to pray they don't change them any more.

    • by billcopc (196330)

      The crux of this argument is that Texas is demanding taxes which were never collected. Amazon cannot go back in time and collect 6.5% from every item shipped to a Texan over the years, so the state is effectively asking for a handout.

      Ultimately this plays into the greater debate about sales tax being a regressive tax, which then plays into an even greater debate over the fact that government is just a collection agency for the obscenely wealthy.

      • Re: (Score:3, Interesting)

        by Mr Z (6791)

        Failure to collect taxes doesn't absolve you from the liability of paying for them. I live in Texas, and I occasionally sell products to Texans. I collect sales tax for those purchases. But even if I didn't, I'd still owe just as much to the state based on the total amount I sold to Texans, pure and simple.

        Just because Amazon did the wrong thing doesn't mean Texas is "asking for a handout."

        Imagine if your employer didn't withhold federal income tax from your paycheck. Now it's tax time, and you owe all t

        • Re:Enough of this (Score:4, Insightful)

          by sessamoid (165542) on Friday February 11, 2011 @02:09PM (#35178420)

          I collect sales tax for those purchases. But even if I didn't, I'd still owe just as much to the state based on the total amount I sold to Texans, pure and simple.

          Just because Amazon did the wrong thing doesn't mean Texas is "asking for a handout."

          From what I understand, Texas is asking for $250M in taxes from before Amazon had a presence in the state, during which time they were absolved of being required to collect them. In that case, it's just like any other mail order business where the purchaser is required to report those taxes and pay the taxes himself. So, no. It's not the same thing.

  • Normally (Score:4, Insightful)

    by phantomfive (622387) on Friday February 11, 2011 @12:34PM (#35176640) Journal
    Good. Sales tax is a regressive tax, meaning poor people pay more than rich people. Even if you want to stick it to Amazon, in a very real way, sale tax is passed on to the consumer. The sooner we can get rid of that awful tax and move to a more equitable tax system, the better.

    (Note: it is true you can soften the blow of a sales tax somewhat by exempting things like food, things that poor people buy; but then it's a hump tax, where the middle ends up paying the highest percentage. That's not equitable either).
    • the middle class always gets humped, sans lube.

      • Re: (Score:3, Funny)

        by Dunbal (464142) *
        The middle class deserve to be humped. They're rich enough to consider themselves "better" than the poor, and not rich enough to realize that they're not.
    • >> hump tax

      Called such because the middle class is getting fucked.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Good. Sales tax is a regressive tax, meaning poor people pay more than rich people.

      Yeah, cause the poor buy SO much more than the rich...

      • Re:Normally (Score:4, Interesting)

        by somersault (912633) on Friday February 11, 2011 @12:48PM (#35176866) Homepage Journal

        They might. When I buy a £100 pair of trail running shoes, they last until the sole wears through - but cheaper shoes I've had in the past have sometimes only lasted a few weeks. I'm sure this applies to more than just shoes. When you can afford quality products, you don't have to buy stuff so often. Being rich means you can buy stuff more often if you wish to of course, but then again, I'm sure some rich people are now rich because they have saved, then invested wisely.

      • Re:Normally (Score:5, Insightful)

        by Nadaka (224565) on Friday February 11, 2011 @01:00PM (#35177106)

        Yes actually. the poor spend near 100% of their income on basic goods and necessities and outnumber the wealthy 10 to 1.

        A wealthy person only buys so much crap. A hypothetical 10% sales tax takes ~10% of a poor persons income while the same 10% sales tax may take 0.01% of a wealthy persons income.

        The only way for sales tax to be close to "flat" is if you charged it on the purchase of financial instruments like stock.

      • As a percentage of their incomes? Yes, yes they do.

    • Re: (Score:3, Insightful)

      by Skarecrow77 (1714214)

      Good. Sales tax is a regressive tax, meaning poor people pay more than rich people. Even if you want to stick it to Amazon, in a very real way, sale tax is passed on to the consumer. The sooner we can get rid of that awful tax and move to a more equitable tax system, the better..

      I assume you're speaking as a relative percentage of entire income, because if you mean that in absolute terms, it's a pretty silly statement. I think it's a pretty safe bet that "rich" people purchase a good bit more than "poor" people do, and thus pay significantly more money in sales tax. In the unlikely event that such a statement isn't true, and that rich people aren't buying more than poor people... well maybe that's why the poor people are poor, maybe they should spend less?

      I know, I know, rich man k

      • Re:Normally (Score:4, Interesting)

        by lgw (121541) on Friday February 11, 2011 @01:14PM (#35177406) Journal

        I know is that I've met many "poor" people in my life who when they get that income tax refund or birthday gift of cash etc, go out and buy a couch or a tv instead of paying their credit card bill.

        Like Hell they do - they get an income tax loan in January with a 30% effective interest rate, and buy a new big screen or pair of running shoes long before that refund check arrives!

        It's amazing how financially ignorant people can be - my younger self definitely included. There's just no educational system to teach better ways: if you don't learn from family, you're stuck learning the hard way.

        • Most people don't understand debt. they don't know what "17% APR" actually means. They don't understand that compound interest works against them if they owe money just as strongly as it works for them if they invest money. It's easier to blame "the man" than learn simple math. Really this stuff is based on like 7th grade math.

          I got my first credit card at age 33, solely because I needed to build a credit rating in order to purchase a house. I had a "0" credit score until age 32. Apparently the idea that "I

    • Re: (Score:3, Interesting)

      All taxes are regressive. The lie of the left is taxes can be progressive at all. Everyone pays all the taxes. Hiding taxes among the 'rich' doesn't help people realize this, as the taxes just get hidden, and passed down to the little guy in the form of higher prices, lower wages and so on.

      But this suits the "progressives" because it creates class warfare upon which to win elections. And when you pit the 'rich' against the 'poor' the people in the middle get screwed the most. If everyone were to realize how

      • Re:Normally (Score:4, Interesting)

        by phantomfive (622387) on Friday February 11, 2011 @01:10PM (#35177332) Journal
        I see the problem with your logic. I'm not even going to address your ideology (so don't assume you understand my position), I'm going to just address your logic.

        You can see this with Cigarettes. Legal, taxed to death, and we don't have nearly the problem with second hand smoke as we used to.

        As opposed to when cigarettes were illegal? Except they weren't. In your theory, the higher the taxes, the lower the smoking, but this is just another form of punishment. Empirically, if your theory were correct, European countries with high taxes on cigarettes would have low smoking rates, and yet they don't.

        If everyone were to realize how much of what they buy is "tax" they throw a fit and toss all the bums out of the legislature and executive branches of government.

        Ultimately around 20% of the GDP goes to the federal government in taxes. I'm paying around 30% of my income, that means someone else is not paying their fair share.

        Hiding taxes among the 'rich' doesn't help people realize this, as the taxes just get hidden, and passed down to the little guy in the form of higher prices, lower wages and so on.

        It's a fallacy to think that 100% of a tax gets passed down. If that were true, in 1946, when the top tax rate was 94%, then the government would have gotten around 94% of the money. And yet, it only got 20% of GDP or so. Check it out, these figures are easily available on the web.

        Vote on things you don't want society to promote, make it legal and tax those things. Legalize drugs, tax them. Legalize Prostitution, tax it. Legalize whatever you think is a "victimless crime" and tax the activity. You'll end up with far more revenue, far less crime (by definition) and the problems of society become controlled.

        This is an interesting idea, but if you think it would close the federal budget deficit, it's probably because you don't understand the magnitude of the problem. Start here [wikipedia.org], look at the numbers until you understand them, figure out how much your proposals would save/generate in income, and then come back to me. In fact I wish everyone who has a method for fixing the budget would do that. There are far too many dumb ideas out there that don't take reality into consideration. In short, the problem with your logic isn't a logic problem at all: it's that you spend too much time thinking and not enough time gathering data.

        • by 517714 (762276)
          30% of your income has a very tenuous connection with 20% of the GDP, but I would conclude you are paying significantly less than your fair share if that is your net tax rate. Unless you can provide a much better connection between these numbers, I conclude that both your logic and math are incorrect. You do not demonstrate any understanding of the data, you simply say the problem is too complex and accuse your opponent of not understanding the data. You are relying on bullying rather than logic to promot
      • All taxes are regressive. The lie of the left is taxes can be progressive at all. Everyone pays all the taxes. Hiding taxes among the 'rich' doesn't help people realize this, as the taxes just get hidden, and passed down to the little guy in the form of higher prices, lower wages and so on.

        And this is the lie of the rich: conflating "rich" with "businesses." We know what happens when taxes on the rich (not businesses, just the rich) go down: they save more. In President Bush's first term, the highest tax bracket went from 39.6% to 35%. The percentage of income the rich put into savings in the same time from went from 2.2% to 7.6%.

        You want my solution to taxes, spending, and so on? It is simple. Vote on things you don't want society to promote, make it legal and tax those things. Legalize drugs, tax them. Legalize Prostitution, tax it. Legalize whatever you think is a "victimless crime" and tax the activity. You'll end up with far more revenue, far less crime (by definition) and the problems of society become controlled.

        You can see this with Cigarettes. Legal, taxed to death, and we don't have nearly the problem with second hand smoke as we used to.

        Now sin taxes, I fully agree with. I have no problem helping out the poor with more progressive mandatory taxes, but if they want to waste their extra money on en

  • by MDillenbeck (1739920) on Friday February 11, 2011 @12:34PM (#35176648)

    All I know is my state's law (Wisconsin) - basically, with most online sales it is the burden of the purchaser to report the purchases/sales taxes of items bought on the internet at the end of the year with your state income tax filing. However, I believe if you maintain a brick & mortar business in the state then it becomes the burden of the business to file the taxes (probably because they already must pay in their state taxes).

    Unfortunately, there is no good solution with state sales taxes. If you put the burden on the purchaser, then the state will have to scrutinize every citizen (which is not practical/possible) - but this problem doesn't go away if you require businesses to collect them. There are thousands of small retailers who would have to file forms with every state they sold in, and the individual states would have to scrutinize every online business for sales (also not practical/possible).

    Hmmm... maybe if we did away with a sales tax and made it a disposal tax....

    • by bk2204 (310841)

      Technically, Texas has a use tax as well which is identical to the sales tax. Unlike other states, though, we don't have an income tax, and the state constitution makes it practically impossible to impose one. So most Texans don't end up paying the use tax because we have no paperwork to file for income tax, which is how most states collect it.

      Texas sales tax is also tricky because the state collects a 6.25% sales tax, and other governmental entities (such as the City of Houston and METRO, the Houston-are

  • by Stumbles (602007) on Friday February 11, 2011 @12:35PM (#35176658)
    Amazon just out of the blue did not decide to start operations in Texas. No, they had incentives, you know like tax cuts and the like. This is not an uncommon thing. The point here is this; many states have decided to suck the dicks of companies just so they will bring "tons-o-jobs" to their area. Companies have gotten used to this notion. The fault falls squarely on the states shoulders by allowing companies to expect no taxes.
    • by MickyTheIdiot (1032226) on Friday February 11, 2011 @12:52PM (#35176956) Homepage Journal

      These tax breaks are the great folly of our time. They can bring in a large-looking number of jobs to an area and make a politician look good for a limited amount of time, then the companies bail and often the taxpayers got very little for their money.

      It's amazing that everyone thinks that big business is what drives jobs. That's a joke. The real job growth comes with small business. Big businesses will soon just be only the elite people at the top ordering all their stock from the 3rd world sweatshops. They aren't going to save the economy of the U.S. Why aren't we spending our money to support these small businesses that actually care about their communities instead of giving these huge breaks to companies that will leave at the drop of a hat. My guess it all has to do with who have the most lobbyists.

  • Other States (Score:5, Informative)

    by dunezone (899268) on Friday February 11, 2011 @12:35PM (#35176664) Journal
    Amazon thinks Texas is bad? Illinois is trying to get about 6 years back-taxes from online shoppers They want everyone who purchased goods in the past 6 years online to pay back-sales-taxes on those goods. How that is considered legal is amazing.

    http://archive.chicagobreakingnews.com/2010/12/state-to-offer-sales-tax-amnesty-for-online-shoppers.html [chicagobreakingnews.com]
  • The article doesn't say what the nature of the dispute is -- is Texas asking for use-tax owed by all Texas purchasers that were shipped from that warehouse? Tax for all Texas purchasers shipped from any warehouse? Tax for all purchases from that warehouse?

    If they are asking for taxes owed by all Texas purchasers, I think Texas has a point -- Amazon has a presence in their state, so probably should be collecting sales tax. Though I'm sure Amazon feels differently. I thought Amazon only put distribution cente

  • Typical (Score:5, Insightful)

    by Beelzebud (1361137) on Friday February 11, 2011 @12:37PM (#35176696)
    Another corporation that doesn't want to pay its share...
    • by Dunbal (464142) *
      Er, those sales taxes are passed on to you, the consumer. Amazon doesn't get to keep sales taxes you know. How about "another corporation that is trying to avoid the ocean of red tape involved in collecting sales taxes for the government in exchange for, well, absolutely nothing at all except audits and more red tape".
  • by dkleinsc (563838) on Friday February 11, 2011 @12:37PM (#35176698) Homepage

    Last I checked, that makes Amazon tax evaders. They broke the law, and are now fugitives from justice. So I assume the state of Washington will be aggressively tracking them down and extraditing them to Texas for trial. Or maybe the state of New York will seize their assets on Wall St to pay the bill. Or maybe the feds will be getting involved and garnishing their profits.

    Oh, wait. Sorry. That would be if a real person didn't pay a $269,000 tax bill. This is a corporation not paying a $269,000,000 tax bill, so they might get a slap on the wrist.

  • With millions being added to the US debt in minutes now I wonder how long it will take for foreign countries to stop extending credit. Will it be when the debt to gdp ratio reaches over 100% (it's currently 97%) meaning we have about as much debt as product. US governments at all levels are currently bankrupt and it's companies like Amazon, Google and others that are the only thing that's left of the US, they can basically foreclose and take over the US government unpunished.

    • by dkleinsc (563838)

      We actually went up to 120% back during WWII.

      As to who's fault it is that we're inching back up to those kind of levels, I'll refer you to this graph [wikipedia.org].

  • by LWATCDR (28044) on Friday February 11, 2011 @12:57PM (#35177042) Homepage Journal

    They way that sales taxes are collected are really a pain for any online business.
    The sales tax varies not just state by state but even county by county. And for an online order where to you charge from? I work in one county and live in another. I if I buy something online at my office do they charge the sales tax of the place where I order or where it is delivered to?
    What about when I use my cell phone and I am on vacation and I buy an app or a song?
    Should it use the GPS and decide?
    If I buy a gift for my mother in law from Amazon should I pay Florida or Texas sales tax?
    Sales tax and online sales just don't work well. And if it is a pain for someone like Amazon which probably could deal with it but a nightmare for any small company trying to do business on the internet.

  • by MaWeiTao (908546) on Friday February 11, 2011 @01:19PM (#35177510)

    And States do what they can to attract corporations not merely because of whatever tax revenue they can bring in but all the other things they bring. Corporations draw in an educated labor pool. That means more people spending money locally, paying taxes and generally improving the quality of life. And the fact is, for a lot of companies setting up a corporate office is a big commitment, so usually they're in it for the long haul.

    A perfect case study is the city where I live. All the neighboring cities are booming because they keep attracting companies. My city despite being centrally located for a lot of people has struggled for years because of ineptitude and corruption. They proclaim victory every time some second-rate retailer or some small-time industrial company opens up shop. But all they do is keep drawing from the same unskilled labor and keep getting screwed when many of these businesses fold or move out within a few years.

    So there's a real incentive to keep Amazon around.

    I find it amusing that there are those claiming Amazon hasn't paid it's share when it's us, the consumers, who have benefited from this. No one who's bought anything on Amazon has had to pay sales tax. However, if states force Amazon into paying sales taxes then rest assured we will be the ones paying them, not Amazon. The only expense Amazon will incur is from the extra work involved in handling sales tax. It's not like we're talking about tax dodging here; if that had been the case I'd be totally behind screwing them to the fullest extent of the law.

    Amazon's prices have been going up for a few years now and in many cases they aren't much better than retail. Outside of hard-to-find items a sales tax would erase any real advantage they currently enjoy.

    I can appreciate the value sales taxes provide. However, States also love to device all kinds of schemes to squeeze a bit more money from individuals and businesses. Back when I had my own business I got to learn about the world of charging sales tax for services. It was completely arbitrary what was assessed sales tax and what wasn't. It was very clear that certain industries were able to successfully lobby for no sales tax.

  • by rinoid (451982) on Friday February 11, 2011 @01:33PM (#35177738)

    TX Gov. Rick Perry wants to succeed anyway. The state he bragged (a typical texas behavior, I know, was born and raised there but I got out) was doing so well.

    If Texas succeeds the U.S. will save a lot of money after we close the ~15 military bases there, rescind the federal subsidies going to (partial list to make the point): the oil drilling/wells/pumping, processing facilities, natural gas facilities, major airline hubs, highways and roads!, schools, universities and colleges, and god knows what else.

    Corporations are greedy. Amazon should buck up, pay the stupid tax and find another way to play after that.

  • by Xian97 (714198) on Friday February 11, 2011 @02:40PM (#35178998)
    Along these same lines, Amazon is opening new distribution facilities in TN near Chattanooga and are trying to avoid having to collect tax from TN residents. They are claiming that the center is just for distribution, that the actual sale takes place elsewhere. It will be interesting to see if the state goes along with this definition of a business presence since the new centers are expected to bring in 1,500 jobs or so. New Egg also has a distribution facility near Memphis and they have to collect tax, so I have to wonder what kind of outcry other distributors will raise if Amazon is allowed to avoid collecting taxes.

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