Why Amazon Fights State Sales Tax, But Supports It Nationally 165
cagraham writes "The Wall Street Journal reported this morning that Amazon will begin charging customers in Connecticut, Massachusetts, and Wisconsin sales tax today, after fighting against it for years. Amazon now charges sales tax in 16 states, affecting roughly 163 million Americans. Yet despite Amazon's continued fight against sales tax on the state-level, they support a Senate bill that would allow all states to tax online retailers. It seems like a contradiction, but it's actually a calculated move to undercut rivals like eBay (who would have a far harder time dealing with sales tax laws), and even an unequal playing field (many states that tax Amazon don't tax other online retailers)."
For the record (Score:5, Informative)
Amazon has supported a national sales tax since the late 90s. Their position hasn't changed, just people's false memories.
They don't support having to figure out 10,000 taxing jurisdictions each with their own weird rules. And there is no justification for Amazon to collect sales tax below the state level anyway, unless they are shipping to a state where they have a presence or nexus.
The supreme court has already ruled on this in 1992, and their ruling was quite clear. So either Congress gets off their butts and passes a law, or Amazon can just keep fighting it out in district courts for years.
That does not absolve people from paying use tax, which most don't. But use tax was never meant for consumers, and states have little power to enforce it on anyone except businesses. So a national sales tax makes the most sense in this case, which is why Amazon supports it.
New Hampshire (Score:3, Informative)
Yet another reason [freestateproject.org] to live in New Hampshire: No sales tax.
In praise of New Hampshire (Score:4, Informative)
Yet another reason [freestateproject.org] to live in New Hampshire: No sales tax.
In further praise of New Hampshire note that we also don't have an income tax and, unlike California, we're not bankrupt. Also, the unemployment rate [unemployme...ension.org] is pretty low - currently 5%.
(We have high property taxes, but one of the lowest overall tax burdens [modernsurvivalblog.com], so having high property taxes isn't as important as you might think.)
Re:Duh (Score:2, Informative)
Check your state laws. In almost every case, if a state charges sales tax then that state *also* has a use tax. The use tax is negated by paying your state's sales tax.
Otherwise, the use tax applies. It typically applies to anything purchased out of state (or that has been purchased but your state's sales tax hasn't been paid, if your state's sales tax would have applied to that purchase) that is put into use in your state.
Buying dinner out of state and consuming it out of state? No use tax due to your home state.
Buying a grill in another state and taking it home to your state? You owe use tax. Typically, you can deduct sales tax paid to another state from your state's use tax bill.
So, yes, essentially everyone is breaking the law. No doubt you are too, unless you live in a state without use tax.