Skip to comments.California’s ‘Amazon Tax’ Already Proving a Bust
Posted on 08/24/2011 12:42:32 PM PDT by americanophile
California recently instituted as part of its budget solution an Amazon Tax aimed at forcing out-of-state, online retailers with no physical presence in the Golden State to collect and remit sales tax in respect of goods sold to Californians where the retailer in question advertises, or maintains an affiliate referral relationship, with websites based within state lines.
Prior to passage of the bill obligating collection and remittance in such circumstances, prominent online retailers including Amazon.com and Overstock.com had threatened to terminate relationships with affiliates, if the legislation became law. Now that it has, and affiliate relationships are being severed, something critics of the legislation say was entirely foreseeable is occurring: Online businesses and entrepreneurs are leaving the state, thus risking an actual reduction, as opposed to marginal increase, in Californias tax revenue.
Last month, news broke of one California-based online entrepreneur who had decided to ditch California and move to Nevada in the aftermath of Gov. Jerry Brown signing the law. I always figured that in California, home to Silicon Valley and a million tech startups, theyd never pass a law like this, said Nick Loper, who formerly operated ShoesRUs and has now opened a new venture, ShoeSniper.
Per the piece in which Loper is quoted, more than 70 affiliates had at that stage already left California, according to online businesses.
(Excerpt) Read more at biggovernment.com ...
Democrats are the Masters of Static Analysis.
They always assume that you are just going to sit there and take it.
That’s why they aspire to Global Government, so that one day they’ll be nowhere to run to, no place to hide.
Assuming we don’t find a way off the planet by then. That would rock their little red wagon.
The NEW ballad of Jed Clampett
Come and listen to a story ‘bout a man named Jed
Poor oil entrepreneur barely kept his family fed
Then one day he was working for some food,
And up through the town come a bumbling clown
(Brown that is, take a toke, what a joke)
Well the first thing you know old Jed’s taxes are to much to bear,
Kin folk said Jed move away from there!
Said California is no place for you to be
So they loaded up the truck and they moved from Beverly
(gon back to the Hills they are, fishn holes, country and western stars)
Well now it’s time to say goodbye to Jed and all his kin
They would like to thank you folks for kindly dropping in
You’re all invited back again to their new locality
To have a heaping helping of their hospitality
(Redneck Hillbillies, is what the press call ‘em now,
Clingers of bibles and guns and to Obama no bow!
Nice folks Y’all come back now, ya hear?)
Terrifying thought, isn’t it?
You've lived in California how long and believed that?!
Our moronic senator, Little Dickie Durbin, is pushing for this for every state. They passed this same ‘Amazon law’ in Illinois where we have lost the most jobs of any state in the nation.
Good luck to the rest of you.
“California is doomed....”
In reality, Caifornia is DONE! The voting welfare set has seen to that.
uh, has Mr. Loper been paying attention? This law appears the normal MO for California.
People seem always to believe their own freedom will be somehow guarded and guaranteed by others of good will and common sense. There’s no concept of what liberty means anymore, or the vigilance it takes from every citizen to maintain a free republic.
Libs hate profits. California loves libs. California hates capitalism.
This is why leftists insist that everything be done at a federal level, so no one can “escape” them and the failure of their ideas can’t be exposed so vividly.
my thots 2...
This is happening at the national level too. Businesses are leaving the US, or expanding operations overseas instead of here, because of poor tax policy.
It sort of makes sense of why they pass some of the policies that they do, in a clear way that I'm not sure I've heard before.
Probably also explain why they only trust the Fed gov, not state.
And why they would try to discredit Perry and TX, by saying they “stole” the jobs of other states.
This is a variation on the phenomenon called "magic thinking". People who engage in it should be prohibited from serving in public office or voting.
The inevitable consequences of State Socialism - readily apparent to anyone with even a nodding acquaintance with history.
Such knowledge is, of course, not expected in Calfornia, a state which is hell bent on self-destruction and is already pulling into the station.
revenue will decrease because existing companies will cut back or leave the state.
Conservatives put their faith in mechanization, automation, computerization and robotics to eliminate such jobs completely ~ starting with middle-management!
Barnes and Noble membership has provided a 20% discount since I joined in May 2002. My recent notification for renewal will change that discount to 10% upon my renewal. The annual fee is $25. I have to spend $250 in the store to break even. Sorry. I won't be renewing after 9 years. I simply won't be buying enough to make it a paying proposition.
Texas tried to collect taxes on out of state Amazon purchases going through Texas distribution centers.
Guess who’s town no longer has a distribution warehouse because of that?
Many - on both sides - do not realize there is a natural human limit to taxation. Raise taxes beyond a certain percentage of personal/corporate/regional/state/national GDP and people will, with little thought, change their behavior to drive that percentage back down. Just happens.
Art Laffer, is that you?
This can not be true. The dems tell us that taxation in no way effects behaviour......
democrats are destroying the californicate.
Thats why they aspire to Global Government, so that one day theyll be nowhere to run to, no place to hide.
Good post! Succinct yet profound.
Beyond that, don't forget the many thousands more small, part-time Amazon affiliates who will no longer be paying state income taxes on their affiliate income which has now vanished.
Great move, Sacramento! </sarcasm>
They just have their checks sent to friend in another state and forwarded to them.
Management agreed to put it to work containing sacks of air mail being dispatched from DC post office to the three main airports in the area ~ roll on ~ roll off ~ and already separated to dispatch in the first handling at DC.
We ran this as an experiment for a month.
We were able to eliminate 24 jobs at the AMFs (air mail facilities) ~ (the employees went elsewhere since volume growth meant we needed an ever increasing amount of manpower).
Then I went in the Army. When I came back the post office had purchased THOUSANDS of these devices.
Over the years USPS ended up with HUNDREDS OF THOUSANDS.
Various people had made various modifications and today's device is about a foot taller than the original, but conceptually they all serve to just move mail ~ in sacks, bags, trays, and so forth of whatever manufacture or shape.
Someday the employees will get wise to what happened and start disabling the APCs and Palletainers and ERMCs ~ just dump 'em over the back dock and spring 'em.
I figure it works backwards. Get rid of a container ~ hire a human!
That's how mechanization all by itself works. That other stuff kicks the labor component upstairs and displaces the bosses.
California’s “Kill The Golden Goose” policy lays an egg.
Did you see the post today or yesterday that charted the start of the
job loss in IL?
The peak of employment immediately flat-lined after that massive
[state] tax increase, then started declining very shortly (I'm
guessing a handful of weeks) afterward.
That describes me.
Auto industry, music industry.........general economy - down.
I call for monthly medications I need and almost all are out of state.
Reps. are very cheerful and talkative and I always ask what part of the country they live and how do they it, etc. Just chit chat while my order is processed
One lady in Illinois just sighs and hopes things get better. They are hopeful but she clearly is depressed about job conditions in Illinois and her family is considering taking up roots and moving out of state. I think she is a native of Illinois, too. They don't want to move but it might come to that whether they want to or not. It angers me that political bullies can have such a wide effect over people's lives. What other states and industries will be next? Best wishes, citizens of Illinois.
Have you tried that? If it's possible to do that, Amazon would then be reporting the affiliate income to the state where the person receiving the check lives. Any tax liabilities involved would need to be arranged between the two parties.
Bottom line -- California loses out on the state income tax that the affiliate would have paid.
People, belay that, governments never learn! I guess that’s because they have so many useful idiots that depend on them. Here’s some advice: GET THE F**K off the plantation!
Nope. Al Smith has his check sent to Al Smith at his brother Phil’s house. Phil forwards the check to Al.
And if I have done it, I wouldn’t state it publicly.
If you tax them they will leave.
If output can be achieved with fewer people, the people whose jobs are eliminated can (must) find something else to do to create value. When this is done, we are ALL much richer (same number of people working - more goods and services to go around.) Mechanization, automation, computerization and robits is why we don't all work the fields all day to provide ourselves enough food to stay alive. A few people can provide food while others perform a million different functions to serve their fellow man.
“”Bottom line — California loses out on the state income tax that the affiliate would have paid.””
There are still a few states with no sales taxes....
As a small business owner who has to make decisions daily, some of which are far-reaching, I MUST look at situations and ask: What is the best scenario? What is the worst scenario?
I contend that almost all business decisions are risk/reward.
I almost never hear our politicians (especially here in California!) discuss possible "unintended consequences," and it is that that always kills us.
In my business, if I were to always put a positive spin on everything, I would soon be out of business ...because there are REAL consequences to my decisions, and these most certainly include the unintended consequences.
In a practical sense, we need a lot more pragmatic business owners running for office and a whole lot fewer lawyers. Ah, but I digress...
Universal truths are universal truths, regardless of whose name gets affixed.
Yeah, I forgot about Laffer.
Looking up “Laffer curve debunked” it’s obvious that naysayers are unaware that we’re on the upper side of the curve, and it’s obvious that if taxes are cut enough then federal tax revenue will, of course, decrease.
It not then you have robbed all those people of jobs.
Of course, that would mean that not many people would have mugs. And probably there would be no coffee. And there would be no Internet. No computers. No electricity. No cars. No steel plows.
In fact, we will have to get rid of plows all together since with them one man and a team of horses can do the work of ten men and so he is depriving those nine men of jobs.
Wagons will have to go too. They can carry more then one man can and so you are putting bearers out of work.
So I guess we will go back to living in huts, digging little holes with pointed sticks to plant seeds and grind our grain on two flat rocks BUT EVERBODY WILL HAVE A JOB.
Sounds like paradise doesn't it?
I had a vendor that made a special RS232 to multi-point printer protocol translator. It was slow and unreliable. I build a small C program that did the job from inside the UNIX machine. Bye bye vendor. The C program logged the data to the hard disk in the machine, so we could "replay" all the traffic if necessary. A capability the dedicated device could never do.
Lots of other big money savers inside the PacBell machine room. Suffice to say, my group returned a savings of $6 for every $1 expended on our salaries.
NEWSFLASH: CALIFORNIA IS A BUST.
Two things are certain ~ DEATH and TAXES.
You are stuck.
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