Posted on 11/12/2011 7:39:16 AM PST by Perdogg
The days of skirting around having to pay retail sales tax by shopping online may be coming to a close—and Amazon, of all companies, is supporting the effort.
Online retailer Amazon.com has a long history of fighting requirements for shoppers to pay their local state sales tax whenever a purchase is made via the Internet. Most recently, Amazon has been battling it out with California, which has been trying to force Amazon and other online retailers with ties to the state to collect sales tax on purchases.
(Excerpt) Read more at moneyland.time.com ...
This does NOT “level the playing field”.
For every transaction, Amazon pays the lowest credit card processing fee of any large online retailer. And they do it all in house, do it so well they sell credit card processing services to tens of thousands of their suppliers, merchants and competitors.
Enforcing sales tax nationwide will make PayPal and Amazon credit card processing services a absolute requirement that will permit Amazon to increase the transactional costs of all online transactions.
Amazon in effect will gain something like 0.01% of all online transactions that go through their new Amazon/Paypal/National Sales Tax Payment Processing Service solution.
10,000+ taxing authorities in the USA. Only the largest credit card and merchant processing services will be able to comply, Amazon hopes to cut out some of the smaller competitors to PayPal in the long term.
the USA has about 43,000 zip codes.
The USA has about 11,000 taxing authories.
There are companies that compile sales tax by zip code. Such as this one:
http://www.zip2tax.com/z2t_lookup.asp?inputZip=35201
Amazon hopes to merge this information with their credit card processing services and PayPal services to increase their total market share and to increase their revenues from those business units.
It’s that simple.
The link above is to Birmingham AL, the highest tax city in the USA.
Amazon has never wanted to play the municipality game. In many states, sales tax can vary by county, or even city, and just keeping up with the constantly changing sales tax code is a full time job for many sites that do collect and remit sales taxes. They have said in the past that they're willing to collect and remit sales taxes, but only at the state level, and not willing to handle multiple tax zones.
The second thing they wanted was a limited immunity from local bans on products - some municipality bans adult novelty products, for example, and then someone orders the banned product from various online retailers, then city attorneys go after the violators of the ban with various fines and penalties. I don't know if the bill in question actually has this in it, but if Amazon's pushing for it, it likely does.
The question really becomes - is there a constitutional manner for the federal government to mandate collection and remission of sales taxes where a business has no physical location? I don't think so - voluntary compliance is one thing, but mandated compliance I don't think is actually enforceable. But if it has the dangling carrot of immunity from unknowing violation of local laws, then there's something that a lot of companies would be willing to take in exchange for collecting sales taxes.
“Assuming it’s a federal bill, the federal legislatures should bug off concerning interstate issues of state level tax revenue.”
The federals will collect it and then send it to the states after a “small” processing cost.
BTW, this is a foot in the door for a national sales tax.
Check your credit card statement. If you are actually paying $25 rather than $79, please tell us more about your fantastic deal.
Good old RINO Lamar and his buddy Turbin.
I buy TONS of stuff from Amazon. First place I go when I want to buy something. If they are going to do this, I’ll stop using them.
If the internet is taxed, the flea markets should be taxed as well.
Nearby Cypress College has a flea market every weekend;there could be 500 or more merchants and thousands of customers each day. No Sales Tax.
So you want to be a small business owner having to deal with sales taxes from all “57” states?
That is a good trick if Amazon gets away with not paying for buildings, property taxes and staff for their warehouses and call centers.
Well almost all communities fall over each other to give big companies generous tax incentives to build their distribution centers in their town.
I understand with people calling for the demise of Amazon.com because of the sales tax situation. However that will not happen as Amazon.com (as another poster put it) is too well entrenched online. The way I understood the interstate tax law is that if a place sent out catalogs and had a physical presence in that state, whether it was a store or a shipping facility, then tax was required to be collected. HOwever if there was no physical presence in the state then the law of interstate commerce applied.
What Amazon.com has done is to work with the small mom and pop stores in California to circumvent this loophole. However, if Amazon.com set up any kind of facility, thus creating a physical presence in the state, then by law they are required to collect state taxes.
Amazon prime is 79.00 dollars for regularly paying folks.
The contention with all of this is this basic fact, Amazon.com is a middle man unless they have the physical inventory and it ships directly from their facility. I can see if a mom and pop store that physically resides in California sells merchansdise through Amazon.com to residents of California, then tax should be collected.
However, the problem then becomes, Amazon.com has a shipping facility in Washington (establishing the physical presence in Washington state), a dealer in Nebraska and the consumer in Washington. Who gets the state sales tax tax? Does Washington or does Nebraska? This is why interstate commerce was setup to avoid dual taxation on goods that cross state boundaries.
If you lived in NC when they passed their online tax, NC said they get the sales tax. Quite frankly I found this to be robbing from another states coffers. As if the merchandsise originated in another state, than that state should get the sales tax not NC. According to the law though if you do pay online sales tax to that other state you still have to declare it at the end of the year and pay tax in NC.
Actually when I worked the Flea Markets in Raleigh NC on the state fairgrounds we were taxed by the state and fed. Now you might not know this but I took this to be business and filed state and federal taxes even had a fed tax id. I incorporated the taxes into the price. When someone said it was unfair that I did not tax my customers, I quietly and politely explained to them that this peice of merchandise cost this much and the tax was this much which was then added together to form a price. My prices were not usually haggled over. I even had to pay a county tax.
As far as other flea market vendors go, I can tell you those around me established a business and claim they paid taxes on their sales.
the die hard flea market vendors usually had a business set up and paid their taxes. It was the flea market vendor who came infrequently that did not pay taxes.
What I am trying to say here is that just because you don’t see a sales tax at a flea market doesn’t mean one isn’t being charged. I kept this hidden (to portray the image the customer wasn’t paying a sales tax) by incorporating it into my price. I do know full well that State of NC went after those who did not pay taxes on the sales of their merchandise.
“Well gee, ain’t it grand? We get to pay more to the state government than we already do. And the Republicans in the house and senators like Enzi helped them screw us some more.
I’m in a state supposedly run by Republicans. They will gladly take any tax the feds tell them is available and go back to mouthing their anti-tax lies.”
BINGO! Well said.
Man has the myth of the internet got you. I like when people claim an internet company does not have to pay for physical buildings, staff and other things. And the myth that this is the internet perpetuates itself.
In reality, Amazon does have all those things you mention and they do pass it on to the consumer of their products. Some of the way Amazon.com does business is called drop shipping, where they ship items from the third party’s shipping facility. However, Amazon.com does keep a physical inventory on hand. They must have aplace to store that physical inventory and they must have staff to receive and ship that inventory. Most of Amazon.com is no longer on 3rd party servers. So they must maintain what is known as a server farm. This requires buildings and staff.
If a company owns buildings and staff they must pay taxes on those assets and resources. Inventory can be taxed in certain situations.
I used to chat online and from the start I heard people say this is “internet”. Meaning it was fake and nothing was based in reality. How much farther from the truth they are. Your statements just perpetuates this idea: “This is just the internet.”
Amazon just lost a customer.
Don’t be silly. Of course Amazon has building and staff etc.
The difference is that one Amazon building serves hundreds of thousands, maybe millions of customers. They serve far more customers than could ever physically even fit into those buildings to even just pick up the books that they’ve ordered. Imagine the line that would form if all they had to do is walk through and just grab the book and walk out the other door.
Now compare that to any of the brick and mortar stores with a couple of cashiers who even have time to chat with the customers. Not only do they have to ship just a few books at a time to each store, they even have to provide a paved parking lot for their customers. Amazon only has to provide parking for the employees. Each employee serves thousands of cusomters per day instead of just a few hundred.
The building and labor cost for Amazon is but a small fraction of what the brick and mortar guys spend. I’ll bet the book-density at an Amazon building is at least ten times what it is at brick and mortar.
Most people are a lot smarter than you may be giving them credit for.
I guess it is ironic the last thing I ordered from Amazon was last night...”Atlas Shrugged Part I” on instant video.....
I am against taxes, but I have to to note that the bill levels the playing field because buggy whip makers were at a disadvantage compared to internal combustion vehicles.
You are missing the point. Amazon got a tax break not available to their competitors like Barnes and Noble. Now they want sales tax imposed so that startup online firms will have a big barrier to cross.
There is another unexplored issue here in that both amazon and ebay facilitate on a major scale the avoidance of customs duty by their sellers/buyers. Many sellers will list a US ship from address online and then mail from say China. Product is mailed directly from china with a fraudulent customs declaration. Ebay/Amazon know this is happening on a major scale but do little to stop it.
If they are going after sales tax then absolutely amazon/ebay should be directly responsible for that customs duty. Put the heat on them for that and see what Bezos has to say.
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