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Amazon To Pay Texas Sales Tax 274

Posted by Soulskill
from the everything's-slightly-more-expensive-in-texas dept.
An anonymous reader writes "The Houston Chronicle is reporting that Amazon.com will soon start collecting sales tax from buyers in state of Texas. 'Seattle-based Amazon, which had $34 billion in sales in 2010, has long opposed collecting taxes. That has drawn fire from state governments facing budget shortfalls and from traditional brick-and-mortar retailers, who say online sellers essentially give customers an automatic discount when they don’t collect taxes. Combs has estimated the state loses $600 million a year from untaxed online sales. However, Amazon has recently begun making deals with a number of states to collect sales tax. Those deals have usually included a one- to three-year window exempting Amazon from sales tax collection.'"
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Amazon To Pay Texas Sales Tax

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  • by plopez (54068) on Friday April 27, 2012 @03:36PM (#39826039) Journal

    What! I thought they were all against job killing taxes!

    • by Dan667 (564390) on Friday April 27, 2012 @03:40PM (#39826105)
      it is a tax that is the burden of regular people and they don't really care if taxes are hard on working families.
    • by Anonymous Coward on Friday April 27, 2012 @03:43PM (#39826149)

      Phsaw, sales taxes disproportionately affect the poor and middle class. Of course they are in favor of it. I mean, they talk all the time about lowering taxes, but the subtext is always that they want to lower taxes on rich people. Just look at things like the Fair Tax. Does it really take more than about 15 seconds of examination to tell that it is a huge increase in the tax burden on the poor, as well?

      • by cpu6502 (1960974) on Friday April 27, 2012 @03:55PM (#39826307)

        "Bah humbug" on your anti-R slam. Most states make Necessities tax free, so the poor are not hurt. They can still buy the food/clothing/rent they need to survive. It is only the well-off wasting their money on luxury, non-needed goods that pay the sales tax.

        BTW someone below made a good point:

        This tax is ALREADY owed by the citizens. It's called a "use" tax and is applied to out-of-state purchases. Nothing's really changed except that Texas is now forcing delinquent citizens to pay-up. In other words TX and other states are cracking-down on tax dodgers. (Tsk tsk tsk you tax dodgers.)

        • A few years ago I moved from Texas back to the West Coast. I had already paid sales tax on the goods that I had bought in Texas. I was told by a lawyer-y friend over some beers that technically I had to pay taxes on all of the stuff I brought in from out-of-state. We may be "tax dodgers" but the tax code is hardly fair.
        • by Grishnakh (216268)

          That's not what I've heard. While here in Arizona we do indeed have sales-tax-free food (from grocery stores, not restaurants), from what other Slashdotters have said, that's not the case in many other states, including Alabama.

          As for the use tax, that's fine if a state is cracking down on delinquent citizens. However, that shouldn't extend to forcing the retailer (out-of-state, with no presence in the state) to pay it for the delinquent citizens. It should only be the citizens who pay it, and if the cit

          • I've lived in several east coast states - MA, CT, NY, NJ etc. Not one of them taxed basic foodstuffs.

            As far as going after entities that are out of state being unconstitutional, here is the story.

            The Commerce Clause prohibits states from restricting interstate commerce. Regulation of interstate commerce is up to the FedGov. The question on this is what constitutes interstate commerce from a sales tax point of view was decided in the Supreme Court in 2011 Quill v. North Carolina which ruled that current law

            • by Grishnakh (216268)

              HOWEVER the same decision also stated that the Commerce Clause gives the Feds power to regulate that; that is allow states to collect sales tax on some other basis.

              Yes, of course. I'm just arguing the current state of the law. The states have no authority to force out-of-state sellers to collect taxes, but yes, Congress certainly does have the authority to change things with a new law.

          • However, that shouldn't extend to forcing the retailer (out-of-state, with no presence in the state) to pay it for the delinquent citizens.

            They aren't. If you read TFA, Amazon is planning to expand to Texas, that's why they're forced to collect the taxes.

            • by Grishnakh (216268)

              I wasn't talking about TFA, I was responding to cpu6502's comment about use taxes. Yes, in Amazon's case the state has the right to force them to collect tax since they do have a physical presence, but for other sellers this isn't the case, and they have no right to "force delinquent citizens to pay-up" by going after the sellers.

          • by i_ate_god (899684)

            Curious...

            the website is accessible in the state, so why doesn't it have a presence in the state?

            Has this ever been argued anywhere? I'd be curious to see the answers.

            • by Grishnakh (216268)

              The website is also accessible in Iran, North Korea, Saudi Arabia, etc. That doesn't mean that every business on earth should be subject to the laws of every country on earth.

              Mail-order businesses were "accessible" before the internet too: you just had to call them on your telephone. Or get your hands on a catalog. Having a catalog in a customer's hands out-of-state doesn't constitute a physical presence, any more than you leaving your business card with a customer in another state obligates you to pay i

        • by Bengie (1121981)
          Everything about our economy is "luxury". Cell phones are a "luxury", electricity is a "luxury", cars are a "luxury", education is a "luxury", access to health care is a "luxury".
          I'm pretty sure there is quite a bit of stuff we can get by without as we have for the past 100,000 years.

          A nomad life-style is base-line, anything above is a "luxury".

          Income and property tax should be enough
          • I'm personally and vehemently opposed to property taxes, just on premise. Simply because the ability for your property (something you own) to be removed from you for lack of action is wrong IMHO. I don't think that once you buy something you should be at risk of losing it for doing nothing. I don't mind licensing of drivers/vehicles in-use and being driven as this is a direct correlation of transit, separate from the ownership of a vehicle parked in a garage. I don't think it's possible to live on a la
            • by rtaylor (70602) on Friday April 27, 2012 @05:09PM (#39827213) Homepage

              The 2 largest expenses for many areas is police and fire. Without those two services your ability to own property is dubious anyway (any person or group stronger than you would take it or destroy it).

            • by Vancorps (746090)

              Whether or not you use your house it contributes to the neighborhood either negatively or positively. The seller value of a house is often determined in part by the houses nearby and what they've been selling for but also the condition they are in. Additionally, a house whether or not you are using it will appreciate in value. You have the option to borrow against this higher value. On top of all of this, property tax is almost always a city tax. In Vermont, my local school received most of its funding thro

          • Since when did nomads need hunting permits, comply with health regulations to sell food they've grown and/or hunted, etc?

            A nomad life is pretty much illegal nowadays.

        • by Sancho (17056) *

          Clothing in Texas is taxed. Foods which are ready to consume at the time of sale are taxed.

          Texas has one "tax free" day per year, sometime in August I think, to help families get their kids ready for school. Taxes on lots of things needed for school (school supplies, clothes, etc.) are removed for that day.

        • Re: (Score:2, Insightful)

          by Adrian Lopez (2615)

          Most states make Necessities tax free, so the poor are not hurt. They can still buy the food/clothing/rent they need to survive. It is only the well-off wasting their money on luxury, non-needed goods that pay the sales tax.

          The rich spend less in proportion to what they make than do the poor and the middle class, which is why sales tax is generally considered a regressive tax.

          As for "luxury, non-needed goods", I feel there should be more to life than mere subsistence, and people shouldn't carry a greater ta

        • by Artifakt (700173) on Friday April 27, 2012 @05:47PM (#39827653)

          Only four states exempt prepared foods from sales tax, and the definition of prepared varies so that for some of them, anything in a grocery store more complex than raw flour, eggs, and milk, such as frozen waffles, counts as prepared. The 4 states with the highest overall sales tax don't exempt prepared foods and two of them don't exempt non-prepared foods either. 13 states have a higher sales tax rate for prepared food than their general sales tax rate.
                    18 states tax perscription drugs, and 37 of them tax non-perscription drugs. 41 states tax clothing, but 2 of them admittedly have a set threshold deliberately designed not to tax cheap clothing (either below $100 or $175).
              The reason there is no sales tax on rent is that real estate is by definition taxed by property taxes, not sales taxes. Every one of the states has property taxes paid by renters. Including rent in the your necessities list is thus disingenious at best.

          Sounds like the anti-R slam is totally accurate.

      • Re: (Score:2, Interesting)

        by Mabhatter (126906)

        The Fair tax is anything but.

        Useful sales tax spending isn't linear by income. Everybody pays the same sales tax on Cable, telephone, etc. if you make $1 million then those expenses aren't 50x more than the average guy. Not to mention payroll taxes that are flat like social security (7% from employee and employer uo to $110k) or Medicare 2% of income... There is about 20% of taxes taken from your pay outside "income tax" just for getting paid.

        Realize that the very rich people live off capital gains and int

        • A true "fair" tax.

          Give everyone one deduction equal to half the national median income. (Currently $26k).

          Then tax everyone at 25% of all income (including investment income) over that deduction.

          It's simple.
          It's very similar to our current progressive tax with a lot less rules.

      • by Moryath (553296) on Friday April 27, 2012 @04:36PM (#39826825)

        Indeed.

        Republicans always love regressive taxation. They don't even mind the payroll tax that much since it's highly regressive (capping out means it applies on 100% of the income of the poor and middle class, but 10% or less of the income of the upper class).

        We could fix the tax system by classifying ALL income as income and eliminating the "capital gains" cheating bullshit, and eliminating the payroll tax caps and simply making it apply to all wages. But that'd never fly, because it'd be fair to all instead of the regressive taxation the Republicans want.

        Consider:
        If you ONLY consider income tax, somewhere around 50% of people have "no tax liability." A whole fucking lot of them are the senile delinquent Tea Party followers who no longer work because they're retired; the rest are mostly stay-at-home parents.

        If you add in payroll taxes, it drops to 18%.

        If you add in sales taxes, it drops to around 10%.

        If you add in the various FEES that Republicans like to pass (remember, fees are even MORE regressive as a percentage of income) - stuff like auto registration fees for instance - it's around 5%.

        But the Republicans still insist on ranting about people who "don't pay taxes."

      • But apparently it's ok because as TFS says "[not collecting sales tax] has drawn fire from state governments facing budget shortfalls and from traditional brick-and-mortar retailers, who say online sellers essentially give customers an automatic discount when they donâ(TM)t collect taxes. Combs has estimated the state loses $60 million a year from untaxed online sales." That got me thinking... How much is it costing me to not be a thief? Hmmm.
    • Re: (Score:3, Insightful)

      by fermion (181285)
      This is raising tax on the middle class, not those who pay for Rick Perry to be in office. Think how much sales tax, as a percentage of income, that a family that makes $40K a year pays. Now imagine how much Clayton williams pay as a part of income. He can travel to other countries for large purchases, hide money, and use other tricks to minimize overall tax rate. This is what is missing in the current tax debate. Most people of moderate income pay social security on all income, spend most of their mon
    • Not only is it a "red" state, it is also the 4th largest city...

      Interesting pilot city... There was just an article about how analytical people tend to be less religious, so it is also interesting to note that Houston probably falls high on the list of "christian majority cities" so the question begs... "Was Houston chosen for two reasons, because its the 4th largest, and also has a majority of people who ... (not trying to troll) perhaps don't analyze as much as people from less religious cities? If I
  • by Pope (17780) on Friday April 27, 2012 @03:38PM (#39826069)

    How about stop spending more money than you have?

    • Re: (Score:2, Interesting)

      by Albanach (527650)

      Texas hardly has a reputation for being profligate in its spending, and this does not increase the tax burden on anyone in the state. Texas already has a use tax set at an equal rate to sales tax and payable on purchases brought into the state, such as those from Amazon.

      It's a lot easier for states to stay in their budget if they can make sure every taxpayer is picking up his or her own share.

      If your argument is that taxes should be lower, that's a separate issue altogether and one for the political process

    • by Surt (22457) on Friday April 27, 2012 @04:19PM (#39826629) Homepage Journal

      Deficit spending is clearly the right strategy some of the time. Particularly if you spend your deficit on infrastructure that grows the economy and results in increased wealth to pay back that debt. The real problem comes when you spend that debt on ephemera like elder health care that gets you nothing but additional expenses.

    • by Jeng (926980)

      So I take it that you have always paid for your vehicles all cash up front as well as your house so you can really tell them because you lead by personal example, right?

    • How about getting a little economic education instead of chanting idiotic repub slogans? If you think about it, the slogan is meaningless. Modern economy runs on credit. Everyone "spends more money than they have," businesses, families, and yes, governments. It increases economic activity and improves growth. You borrow in bad times or for large items, pay off gradually in good times.

  • by Dan667 (564390) on Friday April 27, 2012 @03:38PM (#39826077)
    a tax break for regular people that actually helps the economy? Nope, can't have that.
  • Location based? (Score:5, Interesting)

    by wiedzmin (1269816) on Friday April 27, 2012 @03:40PM (#39826097)
    So, how does that work? They charge you a tax based on what your billing address, your shipping address, your IP geolocation? I wonder if there is a business opportunity in offering re-shipping services out of states with no Amazon tax for Amazon customers...
    • Re: (Score:2, Informative)

      It's based off the address you give them.

    • by Desler (1608317)

      So you're gping to pay a middleman and double shipping costs just to save on sales tax? Have fun buying that TV from Amazon and then having to pay your middleman a couple hundred bucks to ship it to you which, along with their fee, will cost more than you would have paid in tax.

      • Re:Location based? (Score:5, Informative)

        by wiedzmin (1269816) on Friday April 27, 2012 @03:55PM (#39826301)
        Doesn't have to be shipping, if you live close enough to the state border you could drive there to pick it up. Canadians living near the border do this all this time to avoid paying customs fees or to get around stupid shipping restrictions (on Amazon Kindles for example). There are services that offer package pick up in US cities along the border.
        • Those services work for Canadians because 80% of all Canadians live withing fifty odd miles of the border, and 80% of those live in a fairly small number of metropolitan areas. There's no similar situation in the US.

    • by Mabhatter (126906)

      I never understand why they don't go after credit card companies and other electronic funds places. Your Credit/Debit card company already has to comply with local state rules anyway (as a business presence) and have your legal postal address. That industry takes an even BIGGER profit from all the people avoiding tax online. They would only have to comply with one address per customer... And adding fees is certainly something they are good at.

      The biggest problem with the sales tax rules is that EVERY BUSIN

  • Why? (Score:4, Insightful)

    by Black Parrot (19622) on Friday April 27, 2012 @03:42PM (#39826135)

    Doesn't this violate the US Constitution?

    Or are they arguing that Amazon "has a presence" in Texas?

    • by cpu6502 (1960974)

      It doesn't violate anything if the corporation Volunteers to collect the use tax. The state government can not force non-residents to comply, but it can politely ask, and apparently amazon said "okay".

      • It seems Amazon is planing to expand to Texas (creating 2500 jobs, according to TFA), so they'd have to play ball anyway.

  • by honestmonkey (819408) on Friday April 27, 2012 @03:43PM (#39826147) Journal
    It was for a few short stories on Kindle. They cost me $1.07, instead of the $0.99 that was listed. I just assumed they were already charging tax. I haven't gotten charged tax on physical items yet, though.
  • by gestalt_n_pepper (991155) on Friday April 27, 2012 @03:51PM (#39826237)

    is all that is. As for Texas being against taxes, well, the state is about 24.6 billion or so in debt under the ever amusing "conservative" governor Perry. So make no mistake about it. Governor Perry is against taxes, but he seems to be OK with authorizing *spending* whether there's tax revenue to cover it or not.

  • Fair? (Score:4, Interesting)

    by wisnoskij (1206448) on Friday April 27, 2012 @03:53PM (#39826269) Homepage

    How can they just collect taxes from one online store and leave the other million alone?
    Seems like a unfair advantage and completely illegal to boot.

    • Re:Fair? (Score:4, Insightful)

      by tthomas48 (180798) on Friday April 27, 2012 @04:00PM (#39826375) Homepage

      Walmart, BestBuy, Target, Dell, etc. All pay taxes in Texas. Amazon has been a bit off a scofflaw for many years now.

    • Re:Fair? (Score:4, Informative)

      by mybecq (131456) on Friday April 27, 2012 @04:21PM (#39826649)

      How can they just collect taxes from one online store and leave the other million alone?

      Learn about Tax Nexus [about.com] and you'll have your answer.

    • by Grishnakh (216268)

      No, it's not illegal or unfair. Maybe you should go read the Constitution. States aren't allowed to charge taxes to companies that don't operate within their borders (shipping items to citizens inside doesn't count). If a mail-order company has no physical presence within the state, then that state can't force them to charge taxes. Instead, the state needs to go after its own citizens who aren't paying the "use tax" when they buy products from out-of-state.

      Amazon, it seems, has a physical presence there

  • by Zorque (894011)

    Sales tax is an assault on the poor (and to a lesser extent the middle class), and I've been pretty upset to see it encroaching on the internet. I've always thought we should restrict sales tax to "luxury" items like furniture, electronics and so on.

    Although I guess that's largely the type of thing Amazon carries, so maybe I shouldn't be so worked up about it after all.

    • by cduffy (652)

      Texas doesn't have state income tax -- so property tax and sales tax are all that there is for revenue here. As such, either of those being dodged is not so great.

    • If you have a problem with sales tax (and I largely agree with you on that), it is something that should be resolved by normal means, i.e. legislature. Preferably that of the individual states. Companies, on the other hand, should comply with the (constitutional) laws on the books. If a law says that Amazon is responsible for collecting the sales tax for Texas residents, and if that requirement is valid - as it seems to be, since they do have a presence in Texas - then they should just do it. It's up to the

      • by Zorque (894011)

        Well, sure. I didn't mean they should break the law, just that the law should be changed.

  • I live in Texas, and I shop at Amazon a lot (I even have Prime membership). I'm glad that that Amazon will be charging sales tax now. I'm happy to pay it, because I know it will help my state. I know, I could have reported the sales tax myself, but it's not the same thing. It only has value if everyone pays the tax. Amazon's prices and free shipping are already cheaper than most local retailers, so I don't think Amazon will suffer any.

    • I live in Houston. Sales tax is different depending on what city you live in. What's to prevent the Texas, or any state for that matter, telling Amazing to collect texas based on the local sales rate of your resident. Or is that already happening? If not, there will be a lot of fights among cities as to who gets what percentage of the sales taxes collected by Amazon on the states government's behalf.

      • Given that Amazon is liable to collect sales tax because they have physical presence in the state, it would be logical to use the tax rate corresponding to the location of those facilities which constitute said presence, and to distribute them as if the item were sold at that location (i.e. the city where Amazon his, is the one that's going to get the remainder after the state takes its due).

  • by danbuter (2019760) on Friday April 27, 2012 @04:38PM (#39826847)
    Starting next year, Amazon will have to collect Pennsylvania state sales tax, as well. The state politicians have been pushing for this for several years, in fact. Amazon was given a reprieve to allow them to set up their system, but it looks like they will have to collect starting next year.
  • ...is that local, state, and federal governments are so bad about how money is spent, they are focused on taxes and running deficits as a result. Government employees are generally paid at least as well, if not better than the same job would pay in the private sector, yet the compensation package also includes far more days off per year, PLUS a pension and better than normal insurance benefits. As a result of all of this, tax revenues just can't bring in enough money to pay for all of this. So, what

  • I live in Tennessee, and I recently got an interesting email this week from amazon.com:

    Hello from Amazon.com,

    Thank you for being a loyal customer of Amazon.com LLC. We appreciate your business and look forward to continuing to provide you vast selection, low prices, fast delivery and convenience.

    As you may know, Amazon.com LLC is not required to collect sales or use taxes in Tennessee. However, the state of Tennessee requires us to provide the following notice to you:

    You may owe use tax on purchas

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