Amazon Folds In California Sales Tax Deal 639
theodp writes "In a deal indicating all sides appear ready to call a truce, the San Jose Mercury News reports that Amazon.com is offering to back down from its referendum drive to repeal an online sales tax in exchange for a one-year moratorium on collecting the tax. Under the deal, Amazon would agree to begin collecting the tax from California residents in September 2012, unless Congress takes action on Internet sales taxes before then. The development comes a day after a NY Times editorial ripped Amazon over its sales 'tax dodge.'"
[sigh] (Score:3, Insightful)
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not like all the natives are always voting new spending via referendums and then complain about taxes
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Re:[sigh] (Score:5, Funny)
In that case the voting machine should be designed to smack them. A giant ACME cartoon style ballot blow to the head would also be acceptable.
Re:[sigh] (Score:4, Informative)
Yeah, thank goodness CA has ballot measures. Wouldn't want to be like TX!
Check out the map on http://blog.american.com/2010/06/america-as-texas-vs-california-who%E2%80%99s-moving-where-edition/ [american.com] to see what other people think... and follow it to forbes and check out how CA compares.
CA really dodged a bullet there didn't you?
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Oh? "Silly balanced budget amendment" - right. Where they lie about it and use clever accounting tricks to make it look like it's balanced when it's not.
Where they've "added 73k jobs over the last 10 years" - at the same time NOT keeping up with their population growth so that their unemployment problem is just as big as anywhere else.
With some of the lowest taxes... yes, and the crappiest government and services (got a fire department? Whoops no, you have a 20 minute wait for the one assigned to your area
Re:[sigh] (Score:5, Insightful)
Why should Amazon be able to avoid paying taxes while any other business in the state does?
I'm sick of corporate America being treated like royalty. They have more voting power, more funds, lower taxes, and seemingly unlimited resources to control the political landscape to the detriment of the consumer. When they start hiring and stop giving all their money to their CEO's, perhaps I might have more sympathy, but until I see they are actually interested in supporting the states and municipals where they do business, then I can't seem to shed a tear for them.
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Why should Amazon be able to avoid paying taxes while any other business in the state does?
Why should California be able to levy a tax on a business that is run out of Washington? Oh, wait...
http://en.wikipedia.org/wiki/Quill_Corp._v._North_Dakota [wikipedia.org]
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Because they do business in California.
I love how conservatives love states' rights, until the states decide to go ahead and do something they don't happen to agree with personally.
Re:[sigh] (Score:5, Insightful)
I have a theory. California is going to give them a year without paying taxes. Amazon is going to take a year to start building a shipping center in a nearby state with a much lower population—say, Nevada—and in 364 days, Amazon will announce the immediate closure of its California operations.
Re:[sigh] (Score:4, Informative)
Ask not who is clueless, you might be surprised.
If Amazon uses that one-year grace period to get out of California, it just might work.
In 1967, the U.S. Supreme Court determined in Bellas Hess v. Illinois that states could not require companies without either property or employees in the state to collect sales and use tax – in other words, companies needed a physical nexus. The 1992 Supreme Court Case Quill v. North Dakota then reaffirmed the principle that a company must have a substantive nexus in order for the state to require the company to collect sales taxes.
Get rid of the physical nexus, and the sales tax disappears. There are a few states with no sales tax. If Amazon relocates their warehouses and office to only those states, they can ship all over the US with impunity.
Re:[sigh] (Score:5, Interesting)
Personally, I support the Quill Corp. v. North Dakota ruling, and don't think a business should pay any sales tax unless it has a physical presence in the state.
So if Amazon does have a presence there, not just business partners, but an actual wholly-owned subsidiary, then in my mind that means they need to collect sales taxes on CA customers, since everyone else has to follow that law too (the Quill case dates to 1992, and was really a sequel to a case decided way back in 1967 about the same thing). We need to be clear there's a difference between this case, and other cases where an online company truly has NO physical presence in the state, and only sends things there through shipping companies (who DO pay taxes to the states they operate in).
My question, however, is why Amazon has a wholly-owned subsidiary in CA, and how this helps it with tax evasion. If they want to evade taxes, shouldn't they just concentrate all their operations in one state, preferably one like Wyoming where very few customers would have to pay sales taxes? Or is this because they want to have many warehouses spread across the country to keep average shipping times low, and they make each regional warehouse a different subsidiary?
Personally, I'm surprised this went anywhere at all for them: how can you possibly argue that a wholly-owned subsidiary is in fact a separate company? If you own it, it's part of you. I agree with their argument (in the NY case) that their affiliates are really separate companies, and that they shouldn't collect sales tax in a state just because there's some affiliates there (however, if the customer is in the same state as the affiliate, they should). Just because I contract with a separate company to allow them to sell some stuff on my website doesn't mean they're the same company as me; the ownership is totally different. This would be a little like Walmart collecting Michigan sales taxes on all its purchases in all its stores nationwide, just because it sells a few products from a company that's located in Michigan (I know, it's a bit of a stretch, but selling someone else's products in your store is exactly what Amazon does with their affiliates).
Re:[sigh] (Score:4, Insightful)
You may be too young to know this but there was this thing called "mail order" before there was Amazon and it, like Amazon, did not have to collect sales tax if the company did not have a physical presence in the customer's state.
Re:[sigh] (Score:4, Interesting)
Mail order did not introduce a paradigm shift in the economy the way the internet has.
Bullshit! The western half of the United States was built on the Sears mail order catalog. Literally in some cases-- they sold kit houses!
Maybe learn some history and rejoin the conversation, huh?
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Perhaps you should read the article?
You must be new here. ;)
The article might be interesting, but what concerns me on a higher level is what are we going to do as a society to deal with brick and mortar businesses disappearing and taking their tax revenue with them. Amazon is doing business in place of traditional businesses that did business in the state. The consumers are still there and they are still buying products, but now the state is losing out on the tax revenue. It seems like we have two choice
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You actually can, but the services on each must comply with the state in which they reside. I know this for an absolute fact, because there's a strip club that straddles the Idaho/Washington border about 40 miles from my house that is operated in exactly this manner.
Ok, I really don't want to know what is being passed back and forth across the state line in this case.
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I do every year. My state even has a default amount if you don't have records. Many states have that option.
I will not give it a break, anymore than I will give a break to those who steal from the honor fridge or those who don't pay to get into/park at parks. Sure lots of people do those things, lots of people are scumbags.
Re:[sigh] (Score:5, Insightful)
One more reason to leave California.
If you pay the use tax as you are supposed to, this doesn't matter. If it does matter, then it shows the point of why Amazon should collect sales tax...
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Wait...er.... I forgot, this is
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Mod parent way the fuck up.
If it matters you are a damn tax cheat.
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You do realize you have to pay that on your income state tax otherwise right?
If you don't like the tax vote or leave, do not just steal from your fellow man.
Re:[sigh] (Score:5, Insightful)
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Then work to change the law. If need be break it in public and be arrested. Breaking the law in private shows you to be nothing more than a common thief. You pretend to have some lofty ideals, but you won't stand up for them so we know this not to be the case.
Re:[sigh] (Score:4, Insightful)
Breaking the law in private shows you to be far wiser than sacrificing yourself in a lost cause.
I came into this world, not chiefly to make this a good place to live in, but to live in it, be it good or bad.
--Henry David Thoreau
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Again, I really wish you'd direct your ire to the ones who deserve it, the ones who put those
in power there
.
FTFY.
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Since I also live in California, I've got no issue with NewEgg charging Sales tax and actually appreciate it. The reason NewEgg makes sense to me is the distance I'm from any store with a decent selection of hardware (+120 miles) so the cost of travel (2+hrs each way and fuel at 20mpg) means the sales tax no longer factors in. It's selection and convienence factor that comes into play as I don't have to waste a day just driving somewhere's that has a decent store that may have the parts I need. Hell the dam
Re:[sigh] (Score:4, Informative)
Are you fucking kidding?
The Blue states are the only ones making any money. The red states are propped up with farm subsidies and other federal welfare.
The "leftist" state of Germany is the biggest economy in the EU, they are pretty much the only thing keeping it solvent.
Re:[sigh] (Score:5, Insightful)
Holy shit, so much THIS. Germany has amazing safety nets, and at the same time understands how to properly allocate labor in businesses, going so far as to not laying people off when times get slow, but keeping people on the payroll to train and prepare them for when the economy rebounds so ramp-up is much faster.
Germany is single-handedly keeping the Euro together at the moment, by backstopping the PIIGS with crumbling economies (Portugal, Italy, Ireland, Greece, and Spain). They can be as "socialist" as they want.
Re:[sigh] (Score:5, Informative)
Um... I think you need to look at a US map... because what you said is exactly the opposite of what is true here.
http://money.cnn.com/news/storysupplement/economy/state_debt/index.html
http://www.nytimes.com/interactive/2008/11/17/us/20081117_budget_graphic.html
http://en.wikipedia.org/wiki/File:Red_state,_blue_state.svg
The blue states tend to be in the most debt.
Re:[sigh] (Score:5, Informative)
Because of those subsidies I mentioned.
Take a look at who gets how much federal funding for each dollar they send to the fed in income tax.
http://taxprof.typepad.com/taxprof_blog/2004/09/red_states_feed.html [typepad.com]
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Is a hammer good or bad? Is a gun good or bad?
A tool is a tool, it is not morally bad or good.
If the red states need the help, then give it to them. At the same time the people who live their or have that set of beliefs should realize this is what is keeping them fed.
You remind me of the "Keep the government out of my Medicare" folks.
Re:[sigh] (Score:5, Informative)
1. The tax foundation.
http://www.taxfoundation.org/research/topic/92.html [taxfoundation.org]
for an updated one. A major news outlet is about the least worthwhile source ever.
http://www.taxfoundation.org/research/show/22685.html [taxfoundation.org]
That is sourced from the census consolidated federal funds report from 2005.
Here is a link to that.
http://www.census.gov/govs/cffr/ [census.gov]
Page 23 of the 2009 report should prove interesting to you.
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That is neither here nor there. If you do not like the tax code work to change it, instead of just being a tax cheat.
If California did not have to prop up the red states it would not have such high state taxes. Federal taxes are a losing proposition for California and many other money making states. That does not mean California citizens should not pay their federal income tax.
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If you do not like the tax code work to change it, instead of just being a tax cheat.
Isn't that what Amazon was trying to do with their initiative to eliminate the online sales tax? Before California beat them into submission with some combination of threats and bribery?
Re:[sigh] (Score:4, Insightful)
Actual link to the article (Score:2)
http://www.mercurynews.com/california-budget/ci_18849537 [mercurynews.com]
You do need to log in though.
Given the fact that there is a supreme court ruling from the Sears days which is in Amazon's favor, I'm really surprised by this.
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Given the fact that there is a supreme court ruling from the Sears days which is in Amazon's favor, I'm really surprised by this.
The ruling "from the Sears days" is that if you aren't physically in the state, you aren't required to collect sales tax in the state.
Amazon's shipping company is in the state. They probably had a 50-50 shot at snowing over gullible juries and/or convincing courts that their shipping/warehousing/fulfillment company, wholly owned by Amazon, named Amazon, and shipping only things o
Amzon isnt dodging anything (Score:4, Informative)
The consumers who are purchasing from Amazon and sites like it are dodging sales tax, not Amazon.
Those people have a LEGAL requirement to self-report those taxable items on their yearly tax returns and pay any and all sales tax due on said items at that time.
Just because those people aren't doing so, doesn't put Amazon and other online sites in the wrong.
Re:Amzon isnt dodging anything (Score:5, Interesting)
Re:Amzon isnt dodging anything (Score:4, Insightful)
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Re:Amzon isnt dodging anything (Score:5, Insightful)
"While thats true in theory, in actual practice the onus is on the retailer to collect sales taxes."
No, it's not. In fact, if the retailer is in a different state, with no "physical presence" in the purchaser's state, then it is highly illegal -- unconstitutional in fact -- for the retailer to collect sales tax.
To get around this, states have enacted what they call "use taxes". But it is up to the individual -- very definitely NOT the retailer -- to report on, and pay, use taxes.
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Bezos is on the record that he wants this settled by Federal legislation [amnavigator.com]. You have to keep in mind that "nexus" (the exception to the Interstate Commerce Clause prohibiting interstate sales taxes) has never been fully defined. Even if Amazon takes this to the SCotUS and win
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A company they control and is in essence part of Amazon. It only ships stuff for Amazon and is run by the same folks. They tried this little scam for a few years and should be happy they got away with it that long.
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So, if New York were to pass a law requiring all residents of California pay New York income taxes, then Californians would be dodging that tax by trying to get that law overturned?
The Supremes have already ruled that you don't have to do Sales Taxes in any State you don't have a physical presence. Making a State Law that says you do
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It's not just Amazon, either, what about all the 3rd party vendors who sell through Amazon? Although the argument for taxation here is obvious, I see a lot of vendors moving away from Cali because they'll be competing against vendors who are in states where they don't charge sales tax.
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The current situation is that sales tax cost jobs by reducing the amount that can be purchased with a given sum. States like Tx and Ca that insist on using sales tax as the basis for revenue are killing the private job market just to maximize the number of govern
Re:Amzon isnt dodging anything (Score:4, Insightful)
Horseshit. Before the Internet, interstate catalog sales were NEVER taxable. That the individual states have decided to get greedy and attempt to collect on sales tax for transactions out of their jurisdiction doesn't make it incumbent on the citizens to make it easy for them to do so. Shame on Amazon for caving on this.
Horseshit yourself. They've always been taxable. The only difference is whether the tax is withheld by the seller or if the buyer has to include it on their income tax form.
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The only difference here is the relationship between Amazon and "subsidiaries" in California. Really though, states do not have the right to tax interstate commerce, only the federal government has that power. Sorry that the constitution got in the way here, but you know, it is the constitution.
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Amazon vs. the CA legislature (Score:2)
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My guess is that they have a better plan up their sleeve.
Presumably they're thinking Congress will do something before the 1 year wait is over.
Re:Amazon vs. the CA legislature (Score:4, Insightful)
My guess is that they have a better plan up their sleeve.
Presumably they're thinking Congress will do something before the 1 year wait is over.
Yea, congress is going to effectively increase taxes in an election year. Sure thing.
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Well, note that they stopped pushing their referendum.
Which, unfortunately for California isn't the same as "there will be no referendum", since the private citizens of California might dislike the increase in prices also.
Note also that the legislature in California is trying to repass the law requiring Amazon to charge sales taxes to CA residents as "a matter of urgency" (I think that's the term they use), which cannot be overturned with a referendum.
just to be clear (Score:5, Interesting)
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Borders is dead because of tax weasels like Amazon (Score:2, Troll)
The Borders brick and mortar bookstore chain is dead, 10000s of people lost their jobs, and I am out of a favourite place to explore books. All this occurred because customers flock to Amazon like buzzards to a carcass so they can buy merchandise without having to pay tax (outside of WA).
Level the playing field. Make Amazon enforce a sales tax just like every other company. Yes, I know buyers are supposed to pay an Internet use tax, but the reality does not match the theory.
And there is nothing wrong with p
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Re:coffee shop (Score:2)
Far from it - Borders did everything they could to avoid stocking sellable coffee shop items. Some friend of a High-Up pulled a deal to put a third rate food supply there. If I recall you couldn't even buy a coke or pepsi - it was all strange off-brands of expensive yuppy drinks.
Note to Self - go see what Barnes & Noble does for refreshments.
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Sure. Define "Fair" first and I'll pay my fair share.
Also, how do you know you couldn't buy civilization for 5k in taxes?
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The only states without sale taxes lack the kind of big city environs that Border's thrived in and/or you're too far from them? Unless you claim to live in Deleware, which everyone knows is a lie.
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The Borders brick and mortar bookstore chain is dead, 10000s of people lost their jobs, and I am out of a favourite place to explore books. All this occurred because customers flock to Amazon like buzzards to a carcass so they can buy merchandise without having to pay tax (outside of WA).
It is hard to feel sympathy for large companies that fail to keep pace with new technology. If you were lamenting the failure of small, family-owned, local bookstores, you would have more of a point.
And there is nothing wrong with paying taxes. It buys civilization. I pay $40K in taxes out of my salary each year. Do your fair share.
Amazon does pay taxes. The problem is that California wants to get taxes from a business that operates out of Washington. The tax
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Leveling the playing field would require local retailers to find out in which city, county and state each customer lives, and then charging them the appropriate sales tax. I'm sure the local donut shop would appreciate having to keep track of hundreds or thousands of different tax rates and applying and distributing them all correctly every time someone buys a donut.
Why is Borders better than Amazon or alternative? (Score:5, Insightful)
All this occurred because customers flock to Amazon like buzzards to a carcass so they can buy merchandise without having to pay tax (outside of WA).
I don't buy books from Amazon because I avoid taxes, I buy from them for the convince of wanting something and having it two days later without having to waste an hour to go get it. I like local bookstores for when I don't know what I want, and just want to browse... Borders did not deliver well on either use case.
Thus is Borders dilemma - why would I support them over Amazon? You get none of the happy feeling of supporting a small local bookstore. Yet you get none of the vastly larger selection that Amazon has. Borders were huge, but what was really in there? I always found a better selection either at a small local bookstore or as I said Amazon, and that was what really killed them.. there is no room in the middle for something inherently specialized where small local businesses can do a better job addressing regional tastes in books than a large chain.
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I haven't had to sign for delivery in 4 years of buying stuff from Amazon. Over 100 orders, and I've *never* had to sign for a single thing. Not even a computer.
And Borders' selection was never all that great. If I'm already near a bookstore, I'll go in, look around, see what looks fun, might even buy something; but if I have to go out of my way to get to a bookstore, screw it, that's what my Kindle is for. Guaranteed inventory vs. hopeful inventory -- which one do you think makes me feel less like I wa
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Bullshit. I don't know anyone who is going to buy Amazon books over a brick and mortar over what would be a couple of dimes in sales tax. If that were true, then B&N would be out of business as well. Borders is out of business because their executives made poor business decisions, end of story.
No just lower prices (Score:2)
The 10% savings on sales tax is a nice bonus but the real reason is Amazon offers the same items for 1/3 less than retail stores. How is that my problem? Makes a difference when a hardcover reference book is $99 at Borders plus sales tax when Amazon can sell the same thing for $66 without taxes and free shipping. Don't get me started on their $25 DVDs and $19 CDs that Walmart sells for way less...
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All this occurred because customers flock to Amazon like buzzards to a carcass so they can buy merchandise without having to pay tax (outside of WA).
Actually all this occurred because I can buy shit on Amazon that I can't find in my local Borders bookstore. Couple that with the fact that I don't have to drive ten minutes to the Amazon store, I don't have to wait in line 10 minutes to checkout like I do at Borders, and I don't have to wander around a large, semi-organized floorspace to find the one book/author I want and Amazon becomes a much more pleasant shopping experience than Borders. Everyone I know that shops online does it purely for the conveni
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The only thing Amazon did that helped kill Borders is the Kindle - and it's hardly Amazon's fault that Borders couldn't keep up. I'd be astonished if sales tax made any appreciable impact on Borders' death.
I've placed Amazon orders from inside a Best Buy to get the better price*, but it's not worth the delay on books - certainly not over a dollar. On the rare occasion I found something of interest in dead tree form in any bookstore, I'd just buy it on the spot unless the Amazon price was very significantly
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The Borders brick and mortar bookstore chain is dead, 10000s of people lost their jobs, and I am out of a favourite place to explore books. All this occurred because customers flock to Amazon like buzzards to a carcass so they can buy merchandise without having to pay tax (outside of WA).
Please. Amazon's prices for books were much less than those of Borders, even without taxes. In fact, you could purchase books on Amazon cheaper than the clearance prices at Borders. Why pay $25 for a book when Amazon has it for $18? Same with music. I could buy a CD at Target for $14 or get it from Amazon for $10. Tax just isn't that high that I care to shop to avoid taxes.
Congress probably can't "take action" (Score:2)
The problem is actually one of enforcement, since it is up to the individual resident to report on and pay their "use taxes"
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The problem is, if the purchase takes place over the internet, where can it be physically said to take place? The home of the purchaser? The place of business of the seller? The physical location of the server hosting the website, or hosting the credit-card-processing service?
Congress has said that taxes can be collected if the business has a physical presence in the state where the purchase takes place. Amazon tried to get around this by calling all of their places of business in California "subsidies." Ca
It makes no sense (Score:2)
Either a subsidiary does establish a physcial presence in the state for the parent company or it does not.
If it does then amazon should be collecting sales taxes for CA sales under the current system.
If it does not then CA passing law saying that it does it irrelevant since it is a Federal issue.
But clearly Amazon's lawyers know more than me about this. So can CA pass a law saying that "all companies who sell things to CA residents are now classified as having a physcial persence in CA"???
BS taxes (Score:5, Insightful)
In case anyone forgot, the US gov't - and by extension the states - aren't automagically entitled to a piece of everything.
Property taxes are generally to provide for local services, police, fire, streets, education.
Income taxes are generally meant to fund the operation of government, and its (allegedly) limited functions.
Gas taxes are essentially a user fee, to fund use of the highway system (and ironically to help fund the poor struggling oil companies through tax breaks).
Sales taxes are likewise LOCAL in function - they're justified by the 'infrastructure' that allows commerce to happen.
So why should internet retailers pay local or state sales tax? Everything's already been paid for at least once.
In terms of the bandwidth needed to secure the transaction and the shopper, both the shopper (through his internet fees) and the vendor (through his bandwidth charges, etc) are already paying for the hardware - wires, property easements, hefty communication taxes. In terms of shipping the goods from the vendor to the customer, someone on one end or the other is paying postage that supposedly already covers this. The seller, through the price of his goods, covers his business costs, property taxes (and the concomitant services already covered therein), etc.
About the only thing that isn't explicitly or implicitly paid for in an internet sale is the bureaucracy involved in administering, levying, and collecting the tax. Put another way: without internet sales existing, government operates, and provides a certain level of services to the public. This should be covered by tax revenues. Now add internet sales to the picture. What specific service is the state providing that it didn't provide before? I can't think of a one. Sure, the police have started branching out their pedo squads to the interwebs, and the state Attorneys General have some more fraud cases to investigate, but I doubt either of those functions have been a net increase in manpower or services - rather, they've drawn resources from other functions already performed to add these to the mix.
Yes, cue the Liberal Left posters who cheerfully want to pay more taxes. I invite them to do so. But the fact is that the US and State governments are not entitled by their very existence to a piece of every transaction that takes place in this country.
We the people need to fund our government adequately, and we do so through a varied panoply of taxes. But a bewildering array of taxes doesn't mean that we need to sit back passively and let ourselves be double-dipped just because legislators have built too confusing a structure to figure out.
Re:BS taxes (Score:5, Interesting)
Hey, not every Liberal likes every tax, you realize? I find sales tax in general to be regressive; I find income taxes to be too high considering the constant "need" to cut everything *but* defense and tax breaks for the rich.
If my tax dollars were going to education and health care, instead of re-education and murder in foreign countries, I'd be pretty content with the tax rates as they are now.
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Unfortunately, you're incorrect: the IRS even taxes BARTERING at a calculated value.
http://money.howstuffworks.com/bartering4.htm [howstuffworks.com]
"In a swap, both parties have to list the market value of what they received as taxable income. This means that commercial and corporate bartering exchanges require filing a tax form -- a 1099-B, "Proceeds from Broker and Barter Exchange Transactions""
I'm not saying that taxation is intrinsically unfair, that would be crazy. We have to pay for the services and things that governm
one-year moratorium (Score:2)
> to repeal an online sales tax in exchange for a one-year moratorium on collecting the tax
Wait, who folded? If the tax isn't being collected, it sounds like California folded to me.
There are bigger issues than doging taxes here. (Score:2)
The problem they are running into is that technology has changed the way it is done.
In the past, company A was in NY and sold to person A in LA. If company A had a warehouse in LA then they had to collect sales tax. If everything was in NY then they only collected sales tax for the items sold to people in NY.
Enter the computer age. Company A is in NY but has web servers in data centers around the US. These servers are strategically placed to make sure that everyone in the US can get to there web page.
When a
Too bad... I was hoping for a vote (Score:4)
This issue isn't really Amazon's or California's fault. California wants to tax online purchases (especially Amazon's) because it is a profitable income source they have not been tapping into. Amazon wants to avoid it because they profit of off their customers preferentially buying online to avoid state taxes.
I think what this really highlights is the difference of opinion between American citizens and the state governments on sales taxes. People feel that they already pay an income tax and don't want to get taxed again when they buy things. The cash-strapped (and mismanaged) government doesn't want to lose that income source.
Personally, I am disappointed that Amazon is caving. I was hoping for their referendum to make it to a vote to see the actually CA public opinion on this issue. But then again, I never think it is a good idea to give more money to any organization (private, state or federal) that cannot balance its current budget.
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Never happen. They'll just add the sales taxes on top of the other taxes.
And in a few years, they'll try to set things up so you have to pay sales taxes in both your state of residence and the state you bought something in. They won't succeed for a while, but they'll keep at it till they do.
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Define "they". You already pay sales tax, but on-line retailers have had a sweet deal for a long time, at the expense of the businesses that support your local economy.
Iit doesn't matter which state gets the sales tax for a transaction, or how much the tax is. The important thing is to settle the question and put the on-line retailers on the same footing as local retailers. On-line retail doesn't need what is effectively a government handout anymore.
Re:Actually... (Score:5, Insightful)
Sales tax is the most regressive form of taxation in the United States. If sales tax is 30%, that means the poorest of the poor are paying an effective tax rate of 30%, because they need to spend every penny they make in order to survive. Meanwhile, if you look at someone who makes $30 million a year, spends $2 million on taxable goods, and invests or saves the other $28 million, they end up paying an effective 2% tax rate.
It's obviously not "fair" to tax each person the same dollar amount. Why do people think it's "fair" to tax each person the same percentage? I'd call it most fair to impose the same financial burden on each person through taxes, which means that we're able to take a much, much larger percentage of a very rich person's income before they're seriously inconvenienced by it.
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Only if the purchase of securities/other investments was exempt from sales tax. Otherwise, it's simply a flat 30% tax.
Re:Actually... (Score:5, Informative)
Sales tax does not work for securities and investments.
If securities were taxed at 30% when you purchased it, it would mean that you have to get a 30% return on your money to break even. Stock traders would not exists because they would have to pay taxes every time the purchase something, even if they lose money. Commodity markets will fail for similar reasoning. If you are a middle man who can add 10% value to a product and resale it, you would still lose money.
Income tax is much more appropriate in these scenarios because you only are taxed on the money you gains. If you buy something at $100 and sell it at $110, you are only taxed on 10 dollars of income. With a sales tax, you make $10 in income but have to pay $30 in taxes resulting in a net loss of $20.
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Sales tax is the most regressive form of taxation in the United States. If sales tax is 30%, that means the poorest of the poor are paying an effective tax rate of 30%, because they need to spend every penny they make in order to survive. Meanwhile, if you look at someone who makes $30 million a year, spends $2 million on taxable goods, and invests or saves the other $28 million, they end up paying an effective 2% tax rate.
It's obviously not "fair" to tax each person the same dollar amount. Why do people think it's "fair" to tax each person the same percentage? I'd call it most fair to impose the same financial burden on each person through taxes, which means that we're able to take a much, much larger percentage of a very rich person's income before they're seriously inconvenienced by it.
On the other hand, the poorer person may spend most of their money on food and items which may not be taxed while the wealthier will be taxed on non-essential purchases.
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In this case, you need to raise the tax rate even higher, to make up for lost revenues from "poor-people purchases," which, in turn, is going to end up reaming the dwindling middle class. The problem is, the wealthiest, are still going to come off way ahead with sales tax, no matter how you slice it. Those who can afford to give the highest percentage of their income as taxes are the same people who feel compelled to spend the lowest percentage of their income on taxable goods.
I've never understood why peop
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It depends on the state you live in. My state levies a sales tax on food items, so I have to pay the bastards an extra 9% just for the privilege of staying alive.
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Meanwhile, if you look at someone who makes $30 million a year, spends $2 million on taxable goods, and invests or saves the other $28 million, they end up paying an effective 2% tax rate.
To play the devil's advocate here, they will pay the sales tax when they eventually use the money... I agree with your second point, though. And one of the main issues of today's tax rules, is deductions and other strange issues like why compensation for hedge fund managers aren't income.
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What? You think Amazon is going to eat those CA sales taxes? Won't happen, the Californios will pay them (or not, if they're close enough to another State to get a PO Box in any other State. Or even use a false address, and have their books delivered to a friend next door as gifts).