NY Times, LA Times Want Amazon To Collect More State Taxes 507
theodp writes "Recalling that CEO Jeff Bezos originally explored placing Amazon.com on an Indian Reservation near San Francisco to 'have access to talent without all the tax consequences,' the NY Times argues it's time to put an end to the e-tailer's 'entity isolation' tax-avoidance games. The LA Times chimes in, saying Amazon's claims that collecting sales tax constitute an undue burden are 'worth a horselaugh,' noting that Amazon boasts it has no problem keeping track of millions of unique products."
How do you think it works in the EU ? (Score:4, Informative)
Re: (Score:3, Interesting)
Perhaps, I'm not familiar with the tax laws in the various EU countries. I do know that there are many states that have taxes that vary by county. Counties are not easily discernible by zip codes, which makes it very difficult to accurately determine the buyer's location. You can't trust the buyers to do it, either, because if given the option they'll choose the one with the lowest tax.
Add in the fact that each county has different taxes for different items (cigarettes, alchohol, ammo, soft drinks, even
Re:How do you think it works in the EU ? (Score:4, Insightful)
If the buyer lies, that's the buyer committing tax fraud and the buyer's problem, not Amazon's. 'Least, that's the way I'd see it. Require the buyer to state their county, and work it for that. Job done.
Re: (Score:3, Interesting)
I do know that there are many states that have taxes that vary by county.
It's worse than that. In Texas, the sales tax varies by city. There are a few towns/villages in the D/FW area that are literally a few blocks in size.
Either way, Amazon probably has the resources to do so, but do all online retailers? I doubt it...
The last time this subject came up on Slashdot, someone posted a link to an online source for sales tax assessment. I don't know if it used zip+4 or even the specific address.
But, I think the real problem is not how complex it is: it's the penalty if you get even the slightest detail wrong. If Amazon screws up an order and annoys a customer, they mi
Re:How do you think it works in the EU ? (Score:5, Insightful)
Those entities where they do it are done on a country level, which is fairly simple.
I won't claim that Amazon can't get it done, because they're smart people with incredible infrastructure and metric crap-tons of money that they could throw at the problem if they so desired. I can tell you that I live in Cook County, Illinois where Amazon would be forced to collect not only the Illinois state sales tax, but also a Cook County sales tax. I can tell you that since they sell cigarettes, that county sales tax is different for that product versus others. I can tell you that while I myself do not live in Chicago, if I did and I ordered from Amazon they would also then be obligated to collect yet another sales tax. And that, you guessed it, Chicago also levies "sin taxes" on certain products including cigarettes, soft drinks and--don't ask me why--bottled water. And I can tell you that the tax rates are scheduled to change in July 2010.
That is, of course, one potential set of jurisdictions for one potential customer. Now multiply that ridiculous level of legal complexity for every possible combination of city, county and state that are applicable and you're quickly arriving at a system of rather ridiculous proportion. Better that we not bother, in my mind.
Before anybody says "but we're only talking about state taxes!" I'll head it off by saying two things: First, that if we're going to make them collect state taxes you can bet the next debate is going to be about other levels of government as counties* and cities all complain about how their budgets are struggling too. And second, that it only helps marginally. In my example, about half of those county and city taxes are actually collected and administered by the state of Illinois, essentially making them state taxes that are only applicable in certain areas.
I understand the plight of the brick-and-mortars who not only have to compete on price but also on a lack of sales tax. I also understand the struggles of many cities and states with their budgets for the past decade or so now. But this is a ridiculously complicated system, far different from the "ZOMG X% VAT" that Amazon deals with in other countries. Setup would be bad enough, much less maintaining compliance with all such systems.
Impossible? No. Unwieldy? Definitely. Worthwhile? Not in my mind.
* I think Cook County may be the only county in the country that is legally permitted to levy its own sales tax, but I'm not sure.
Re: (Score:2)
Nope, you're not the only one getting screwed at the county level too.
Re:How do you think it works in the EU ? (Score:4, Informative)
* I think Cook County may be the only county in the country that is legally permitted to levy its own sales tax, but I'm not sure.
http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States. I know for a fact that counties in georgia also levy sales taxes, theres more listed here.. trust me cook county isnt the only one, and to assume so showed you have never left home.
"Georgia has a 4% state sales tax rate. Groceries are exempt from the state sales tax, but still subject to tax by the local sales tax rate. Counties may impose local sales tax of 1%, 2%, or 3%, consisting of up to three 1% local-option sales taxes (out of a set of five) as permitted by Georgia law."
MANY MANY MANY counties have sales taxes across the country.
Re: (Score:2, Informative)
Re: (Score:3, Informative)
In Louisiana, there are also Water Districts and Levee Districts, which overlap county boundaries and almost certainly overlap zip code boundaries.
The constantly changing tax rates, plus constantly changing exception lists, makes management a nightmare.
But a jillion national brand brick-and-mortar companies (Walmart, Home Depot, Sears, JCPenney, etc, etc) know how to do it, so Amazon and NewEgg can figure out how to do it.
Re: (Score:2, Insightful)
Re:How do you think it works in the EU ? (Score:4, Insightful)
There's a business for you and a CPA: create a GIS-style database, continuously updated, that determines the sales tax rates of every address in the country. License it, along with an API, to Big Internet, like NewEgg and Amazon, and as SaaS to small companies.
Re:How do you think it works in the EU ? (Score:5, Informative)
It's not just a tax rate per address. It's per address per product. For example, in New York, clothing under $110 is exempt from state taxes but not necessarily exempt from county, city or other local taxes. Any clothing item over $110 is charged tax on the full price. In Massachusetts, clothing under $175 is exempt from state level sales tax but only the portion above $175 is taxed for higher ticket clothing items. In Connecticut only some clothing items under $50 are exempt from state sales tax. So, just in the category clothing, you can see that what is taxed, which portion is taxed and which items are included in the category definition is different. This is just on the state level and not including the myriad city, county, district and other taxes.
Taxes may be based on types of products: in Massachusetts, the American flag, among other items, is exempt from taxes; in Pennsylvania, textbooks and disposable diapers, among other items, are exempt; or as another poster mentioned, the Chicago Soft Drink Tax (where additional taxes are charged for "soft drinks".) Taxes may be based on areas: higher taxes for Bay Area Rapid Transit district and Louisiana tourism district or reduced taxes for New Jersey's Urban Enterprise Zones. Taxes can be charged based on intended use: in Indiana, a 15 ounce bag of potato chips is tax exempt (food items are exempt) whereas a personal sized bag is taxed because it is for immediate consumption and in California fertilizer is exempt if it's used to grow food.
Realistically, taxes can be based on any criteria that enters the twisted mind of a politician in the tiniest of jurisdictions, Currently, sales taxes can differ based upon temperature of food, whether the customer is a college student, distance from an airport, whether the product is in its original package, whether the product is intended to be used at home, etc. Most sales taxes are charged based upon the sales price while Hawaii also charges a portion of their excise tax (their sales tax equivalent) on the wholesale price and other states only charge on a portion of the sales price (such as the amount of clothing over $175 above.) Many states and municipalities also charge a restaurant and/or hotel tax and it's amazing what can get swept into that tax, such as candy, chips, soft drinks, juice boxes, bottled water, or other immediately consumable items, which an online retailer may sell.
In addition, many states have tax "holidays" when taxes are not charged: in Florida, a "back-to-school" tax holiday is often enacted on clothing, books and school supplies under a certain price; in Georgia, a tax Holiday, usually in October, is enacted on Energy Star rated appliances; Texas's tax holiday lasts for an entire weekend and applies to many items and exempts clothing and footwear under $100 but still taxes golf shoes, no matter the price.
Sales taxes are much more complicated than most people realize and they are completely at the whims of state, county, regional and municipal government officials. The category definitions are different from state to state and often different for local taxes within the state. This means the local taxes are often different from other locations within the state but also means that the local definition may differ from the state's own definitions. So for any given product, any of the taxes; state, county or municipal; may or may not apply. For a physical store, a local accountant can advise you how the taxes apply for that particular location but an online store would need to know what rate applies for every single product for every single address. Obviously, most of these combinations would never actually occur but the databases would need to contain a solution prior to the person placing the order.
Re: (Score:3, Insightful)
I think that's the bigger issue. If we set a precedent where you have to have the infrastructure to keep track of all the sales taxes in the US in order to operate an online storefront, we'll end up killing all but the biggest players.
Re:How do you think it works in the EU ? (Score:4, Interesting)
And it can get even stranger. At least in Arizona, your zip code is not an indicator as to the county you live in (not to mention what city). In order to administer collection of sales/use taxes down to the local level (yes, we do have cities that levy sales taxes), you would almost need GPS/GIS information.
If you have a Queen Creek zip code, you might live in Queen Creek, in unincorporated Maricopa county or in unincorporated Pinal county (all at different rates). Which combination of state/county/local sales taxes do you collect?
The same goes for the Pinal/Pima county line (Red Rock and Marana). Once again, one zip code with multiple jurisdictions with different tax rates.
When the politicians say this is an issue of fairness (no sales tax - competitive advantage to online retailers), they somehow miss the other side of the coin. When the brick and mortar stores add handling and delivery charges the online stores should collect sales taxes.
Re:How do you think it works in the EU ? (Score:4, Informative)
And I thought Ohio was the only state that had such fucked up sales tax laws. In Ohio, too, you cannot plainly use a zip code to determine sales tax, because the county lines to not abide by them. So you have to factor address, city, county and zip code.
You can find some information from the state of ohio in pdf's and csv's to try and help you sort through it. However, the same information can change depending on the election cycle ( https://thefinder.tax.ohio.gov/StreamlineSalesTaxWeb/ [ohio.gov] ).
While a prior poster mentioned that surely Amazon is full of intelligent people who can figure all this out, I do not believe they should have to. I cannot imagine having to put together a system that deals with each and every states archaic tax laws that change at any given time. What a pain in the ass that'd be. And how costly that would be to implement, ugh.
Re: (Score:2, Informative)
* I think Cook County may be the only county in the country that is legally permitted to levy its own sales tax, but I'm not sure.
I'm not sure about others, but in NY we have taxes at the state, county and city level.
This seems like a case of the states trying to make a grab for more money without upping their own taxes.
Catalogs have never had to pay out of state sales tax unless the company owned land in the state they were shipping to, like a warehouse, store or distribution center.
NY has been pushing this idea for a while now. Most people don't realize that NYS now demands sales tax on any item purchased out of state for
Re: (Score:2)
It's called a tree-shaped data structure and I'll bet somebody could start a subscription-based website that maintains a current database of such info for its customers, if it hasn't already been done.
Re: (Score:3, Insightful)
Smugly focusing on the data structure rather than the real problem, which is the selection process shows how poorly you understand the problem.
Re: (Score:3, Interesting)
Looks like someone already does this for about $1100/year -- and that was just the first Google hit.
Re: (Score:3, Informative)
Please read the discussion - zip2tax provides only zip code tax information, which is 100% useless for many places, where zip codes cross county and city lines at will. Much greater specificity than zip code alone is needed; whether that entails lat/long coordinates or merely address tracking is not clear.
Re: (Score:3, Interesting)
As others have noted, zip code is woefully inadequate for determining sales tax rates. At best, that company can give a list (from one to a half dozen) of sales tax rates that might apply to those living in that zip code.
Personally, if this needs to be fixed at all, I think states should just set a fixed sales tax rate and mandate all online retailers collect to that level.
Re: (Score:3, Interesting)
* I think Cook County may be the only county in the country that is legally permitted to levy its own sales tax, but I'm not sure.
No, Sangamon County has a sales tax [sj-r.com] as well. Here in Springfield there's the state sales tax, county sales tax, and city sales tax. Oddly, when I buy a $.99 loaf of bread at County market, it comes to an even dollar, so I guess food isn't taxed at the state or city level (not sure why though).
That is, of course, one potential set of jurisdictions for one potential customer. Now m
Re: (Score:2)
Having working in the hotel reservation business for the past 8 years, I can tell you there's nothing simple about EU taxes either, especially in France.
Apart from the TVA (basic VAT) at 5.5% based on the whole cost of the stay, there's also a City Tax, that applies only in Paris, and can be a monetary amount anywhere between 1.00 and 7.00 EUR (seemingly based on how many rooms the hotel has and which "friends" work in local government and can give you a better rate).
Of course this tax applies when someone
Re: (Score:2, Insightful)
I really don't get that argument - they have no physical presence (ignoring their distribution center locations) in your county/town (maybe in your state, I don't know how large a region each distribution center services). Why should they be subject to sales taxes from an area they have no presence in? I would view this as equivalent to your home county trying to charge you taxes on souvenirs purchased in NYC or DC. I would be perfectly fine if they charged sales tax at the site(s) of the distribution ce
Re:How do you think it works in the EU ? (Score:4, Interesting)
Huge advantage? Ever heard of shipping? Bumps the price of the item up about as much as sales tax. In fact, since I live in WA I already have to pay sales tax on my Amazon orders on top of shipping costs. It makes small items cost about 2 or 3 times what they cost in the local Target/Walmart.
Re: (Score:3, Insightful)
Amazon UK manages it (Score:5, Informative)
Amazon UK manages to collect the appropriate VAT, depending on country. Which is why, if you buy from e.g. Denmark, you should order from one of the smaller UK book stores so you get to pay the UK VAT (0% on books) instead of the Danish one (25% on everything).
Re: (Score:2)
News for you: The UK is part of the EU.
Re: (Score:3, Insightful)
Ouch, changing taxes within the state can be a problem (but then Amazon UK has to handle the Channel Islands which probably presents similar problems). Varying tax on different items is very common across Europe. Generally luxury goods are taxed higher, and it can be somewhat amusing to compare which countries consider which items to be luxuries. Well perhaps I'm just easily amused.
Note the lack of mentioning all the other taxes (Score:4, Insightful)
Re: (Score:2, Insightful)
You are missing the point of the article, the articles are not proposing that Amazon et al. pay one more cent of tax on their income just collect and remit to the proper taxing authorities taxes that are legally owed by the purchaser of the goods. Would it increase the cost of doing business for e-commerce firms, yes but so what? The cost of doing business is part of any business plan. Amazon and its ilk are utilizing a legal loophole to get an unfair advantage over local merchants.
The handwriting is on the
Re:Note the lack of mentioning all the other taxes (Score:5, Insightful)
I didn't miss the point of the article, I was pointing out that the article is disingenuous in it's description of the situation. The only legal loophole amazon is exploiting is the separation of sub-entities related to it's primary business as a way to avoid the presence of a legal nexus of operation. And those sub-entities are still paying taxes with respect to everything else that they do. Even if that loophole was closed then only a handful of additional states would be receiving sales tax.
Additionally, if laws are passed requiring all online businesses to collect sales taxes this will have a distinct chilling effect on all but the largest of retailers.
As a final note, perhaps states should start enforcing use taxes if they're that concerned about it, but given the complexity of doing so, and the fact that enforcing it would probably cost more than could be recouped from them, use taxes still seem rather silly in their logic. Americans(speaking of patriotism) pathologically do not like paying taxes and expecting them to volunteer(in the sense of paying a nearly totally avoidable and confusing tax) even more money during a recession seems like an exercise in futility. Perhaps if the government provided a line item receipt on how tax money was spent we might feel differently.
Re: (Score:3, Informative)
Re: (Score:2)
Add to that the crappy cold winters, and the truly obnoxious gun control laws, and I can't for the life of me see why anyone stays there.
Well, you do have great food, and the few weeks where the weather is truly perfect, it is gorgeous to look out over the lake...
Re:Note the lack of mentioning all the other taxes (Score:5, Insightful)
I think it's cute that the NY Times forgets Amazon is online, they don't rely on local people, and could just as easily move overseas as it could to another state to save that billion dollars in taxes. I'm sure there's plenty of states that would welcome Amazon and the 15,000+ jobs it brings [amazon.com] with tax-exempt status.
Please California, chase away all of your big businesses! Midwestern states would welcome the jobs.
If online taxes were required I'd just purchase more from eBay and chinese vendors. Is that what California wants? People are going to buy wherever it's cheaper, whether it's down the street, online or overseas.
Re: (Score:2)
So I take it you don't like being able to afford things? Because business don't pay taxes - consumers do.
Re: (Score:2)
Re: (Score:3, Insightful)
Re: (Score:2, Offtopic)
And, for an out-of-state company, the taxes would NEVER go to the local community, because the business isn't in that local community. There is the other problem of state governments spending so foolishly that NO ONE would approve. When public school teachers make upwards of $80,000 to teach from September through June, with MANY vacations and days off due to government holidays on top of that, there is a huge problem, and no one seems to be willing to step up and DO anything about it.
Why should gover
Re: (Score:2)
I do not understand why you feel that Amazon sales should not be taxed. If you buy a book from the bookstore, you have to pay a sales tax. If you
Re: (Score:2)
The LA Times article says:
The board estimated lost revenue at $1.1 billion annually. To put that figure in perspective, it would pay the salaries of more than 15,000 California schoolteachers for a full year.
That works out to around $70k as an average salary. There would almost certainly be some $80k salaries in there.
Re: (Score:3, Insightful)
I didn't say they should not be taxed, but that the taxes should be paid by those who have access to the services. For example, someone living in New York should not have to pay for local services provided in California. Also, if I go out of state to make a purchase, should I have to pay a SALES tax in the state I live in? Paying INCOME taxes makes sense for a business, but you have to look at what resources the business will be using.
This is really what it comes down to, fair taxation. The idea
Re: (Score:3, Insightful)
Depends on the state. In the south it can be as low as 30k, in the NE as high as 80k.
Not totally true, but the big difference is that government jobs rarely if ever go away. In this tough economy where companies are having to cut salaries and/or lay p
Re: (Score:3, Interesting)
$80k may be more than the average for the majority of districts, but you choose the right one and not only is it totally achievable, there's a pretty good overlap with the state/local governments that tend to have budget issues.
The issue with taxing ama
Re: (Score:2)
From the NYT article, they are following the law (Score:2, Insightful)
The state and federal governments made complicated tax laws and Amazon is following them in a bus
Re:From the NYT article, they are following the la (Score:5, Insightful)
The letter of the law may allow someone with access to expensive lawyers to avoid paying taxes, but it is not in the spirit of the law?
"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands."
(US Appeals Court Justice the Honourable Learned Hand)
Re: (Score:2)
Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.
There's a certain truthiness to that, but the perspective is a bit narrow, doncha think? How, for example, would you explain the following Wiki entry [wikipedia.org]:
Rich men trying to give their
Re: (Score:3, Insightful)
Nobody owes anybody anything. Some choose to donate out of their own free will. Others don't. The freely-chosen donations of one person do not, in any way, imply that another person should be required to "give" in order to "match up".
If you disagree, then, well, my mom gave me a really nice roasting pan for Christmas. To match a small part of her generosity, I'll be expecting a measuring cup set from you.
Re: (Score:2)
Re: (Score:3, Insightful)
Rich men trying to give their hard earned money to the government? Blasphemy.
He favors an estate tax, which would force others to pay. It's not about trying to give his own money to the government. He has said he plans to give his money to charity, so the estate tax has no impact on him.
How do you think Buffett feels about taxes that actually affect him? Hmm well check out this article if you're curious: http://online.wsj.com/article/SB125729682025626851.html [wsj.com]
If you really hold that the general principle that "Nobody owes anybody anything" is valid, then I suppose "sharing" is delusional and childish, "sacrifice for others" is delayed gratification, "charity" a clever misdirection or an attempt at ego agggrandisement, and "community service" is an atonement for misplaced guilt.
Again those are all voluntary actions. Don't you think that's an important distinction from compulsory taxes?
Re: (Score:2)
If you really hold that the general principle that "Nobody owes anybody anything" is valid, then I suppose "sharing" is delusional and childish, "sacrifice for others" is delayed gratification, "charity" a clever misdirection or an attempt at ego agggrandisement, and "community service" is an atonement for misplaced guilt.
The problem is that even animals don't subscribe to that kind of thinking, or behaviour. Your justifications no doubt seem correct to you, but I suspect in the end you'll wind up recognising them as nothing other than sophistry. I'd also suspect visiting a school bake sale or a community food bank and talking to the locals might accelerate the process.
There is a difference between 1) someone taking your money and 2) you giving it away freely. Just because someone chooses to give to a charity does not mean they want to be taxed more, and just because someone wishes to keep their taxes low does not mean they wouldn't give to a charity. You are equating the idea of giving with the idea of having things taken from you forcibly. At no time did GP imply that this was the case. Basically, "Nobody owes anybody anything." does NOT imply "sharing is delusional
Smaller companies? (Score:5, Insightful)
It might not be an undue burden to Amazon, but what about smaller online companies? You could use software to manage the collecting of sales tax for everything but the real problem comes to sending off that money to every town, county, and state that collects sales tax. Someone buys something for a couple bucks and suddenly you have to send payments of a few cents to three different places. Even if you save it all up and send it bi-yearly you could be looking at thousands of separate payments based on how widespread your client base is.
You can't just look at a huge company with millions in revenue and make a one size fits it all decision.
Re: (Score:2)
Re: (Score:3, Insightful)
Everything we di
Re: (Score:3, Interesting)
There is over a hundred different tax rates in NY state alone. The company I work for has seven different locations in seven different counties. Any one can come to us and buy stuff. However since we do somuch business around the state we have to deal with taxes to the point where one of our accountants (out of three) spends half of her week justkeeping it straight. Failure is expensive. You see when the state audits you they take a sample of errors made and multiply that by the number of years they go bac
Re: (Score:3, Insightful)
My mom has been trying to start a new museum lately. One of the big projects is to set up Internet-based donations. Naturally, every state has its own laws on how donations to non-profits work. Non-profits have to be registered separately in every state (technically there is a "standard form", but the states who take it all require extra documentation as well) and tax reporting is just a gargantuan enormous burden. Too complicated for any small non-profit to ever manage.
As a result, there are companies that
"tax" problem was solved in mid-1990s (Score:2)
Customers hate paying sales taxes too. So many use the internet for that reason.
After two major recessions this decade, governments are re-examining the tax issue.
Re: (Score:2)
Well, I can't speak to other states, but in New York, it's ordered by County ( with a very few City jurisdictions ), and you remit the total tax collected on a single check with a quarterly form. It's fairly trivial.
Wouldn't it be wonderful, (Score:4, Interesting)
I like my tax heaven (Score:2)
if there were no tax heavens anywhere in the world
I live in Delaware USA. There's no sales taxes, and low incomes taxes. I think its awesome. Please, raise your taxes.
Re: (Score:3, Interesting)
There is _nothing_ wrong with avoiding taxes. My God, if we have a right to an attorney to help us avoid jail time, we ought to have a right to avoid spending 1/3rd of our life working for the government.
Well, like everything, to a point. But in Delaware's case, the roads are paved on time, traffic is manageable, public services are good, and things are rolling along. Like, I have to ask, what exactly does New Jersey or Maryland do with all of their dough, because, in both cases, services are worse and th
Re:Wouldn't it be wonderful, (Score:4, Insightful)
"businesses just paid what they owed like the rest of us"
Businesses don't pay taxes, the consumer does.
Re: (Score:2)
Ugh, businesses don't pay sales tax. They simply administer it (that adds overall item cost) and collect it from the buyer. The buyer just happens to be normal people who are probably pinching every penny they can in the current economic climate. Forcing Amazon to collect sales taxes is an administration cost for them and a tax increase for us.
No Way! (Score:4, Insightful)
This is an attempt to please brick and mortar stores who want to push electronic sales into the toilet. On line sales already carry a great burden in shipping costs. If you add taxes on top of shipping costs you kill online sales completely.
Re:No Way! (Score:4, Insightful)
Burden (Score:5, Insightful)
Yes, there is a real burden here. A "brick" store only has to deal with exactly ONE tax rate, which is the rate for their physical location. A chain of stores would only need to deal with this on a per-store basis. However, the web retailer is expected to charge tax based not on their own physical location, but rather, the location of the customer ordering the merchandise. This means keeping a database, and keeping it updated, for each and every single tax jurisdiction in the country. In many states this varies by individual city and town. There are thousands of these. In some cases they are even split across zip codes. And it's not just rates to worry about. Different jurisdictions have different exemptions of what products don't require a tax (food in one place, only perishable food in another, bath products might be included in another, school supplies exempted in a few, etc).
Then there is the issue of ensuring the taxes get paid to the proper government entity. That and making sure people are not subverting the system by sending packages to other locations.
Some solutions to this are possible.
I suggest that instead of the stores charging the tax, the credit/debit card processor charge the tax. The advantage of this is that they readily know the billing address of the account holder. Their payments to the government entities would be more in bulk, instead of these governments getting thousands of small payments from all the "mom and pop" web sites that would be compliant with tax law changes. The one change that would need to be made is each credit/debit charge would need to have split up according to product type classifications (a federal standard needed for that).
Another alternative is for a federal law that simply requires each of the states to submit ONE tax rate for the whole state, and accept a set of exemptions designated by that federal law, to be part of the inter-state tax program. One other requirement is, to be a part of it, they treat in-state web retailers exactly the same as out-of-state (e.g. all or nothing).
The burden on web retailers is NOT a myth. It is very real. Amazon can probably handle it. But you know the smaller retailers will be next, and eventually they will try to impose this on others. Taxes are essential, but it needs to be kept simple. Also, smaller retailers need to have a SINGLE (not 50) payment destinations (a central clearinghouse for this).
Re: (Score:2)
I suggest that instead of the stores charging the tax, the credit/debit card processor charge the tax.
This would completely screw a lot of tourist/travel destinations. Mall of America, the Disney Areas, shopping on Chicago's Michigan St, etc is all affected and all incentive for those municipalities to bring people in is gone.
Another alternative is for a federal law that simply requires each of the states to submit ONE tax rate for the whole state, and accept a set of exemptions designated by that federal law, to be part of the inter-state tax program.
Sounds like a much better idea.
Re: (Score:2)
Another alternative is for a federal law that simply requires each of the states to submit ONE tax rate for the whole state, and accept a set of exemptions designated by that federal law, to be part of the inter-state tax program. One other requirement is, to be a part of it, they treat in-state web retailers exactly the same as out-of-state (e.g. all or nothing).
While it might be a good idea for states to decide on a flat rate tax for internet orders of any type, we are talking about State taxes here. Federal laws have no real weight on that topic, nor should they.
As for who collects the taxes, well, if I recall correctly, most states do actually have a section where people are expected to list their out of state purchases on their tax forms. This sounds like a problem for NY and CA because people might not be as honest as they would like. Then again for the peo
The dangers of stupid taxes (Score:2)
When you think about it, the problem with most of the taxes imposed by states is that the idea is to pay for government provided services. Now, for out of state businesses, shouldn't the ONLY real burden be on the transit systems(roads and rails)? The postal system already charges money for delivering things, so really, it is just about transit systems. Sales taxes, such as they are, are a bit foolish to impose on out of state entities since the equipment that handles the actual exchange of money i
Re: (Score:3, Insightful)
Now, for out of state businesses, shouldn't the ONLY real burden be on the transit systems(roads and rails)?
No. Sales taxes go into general coffers are are used to pay for all types of services. Rails are private, we have no nationalized rail in the USA. That leaves roads, and heavy trucks do almost all the damage done to roads by vehicles (the majority of the remainder being done by weather.) Amazon also receives the benefit of police protection; without police, anyone would be free to loot their warehouse. They receive fire protection in that the FD will show up and try to put a fire out if their building is bu
Re: (Score:3, Informative)
Which their warehouse has property taxes, the employees pay income tax on, also the fed-ex and ups charges include fuel costs and taxes.
The fuel costs and taxes are insufficient to cover the cost of the damage done by shipping. On average a semi-tractor with a reefer unit will get about 6-7 mpg, which is a third to a quarter (say) of the mileage of an auto, yet it does more than three or four times the damage that the car would do; The relative damaging effect of an axle is considered to be approximately proportional to the fourth power of the load. [lib.unb.ca] In other words, a 40 ton truck can easily [chicagoboyz.net] cause as much damage to a typical road as 60,000 o
Re: (Score:2)
The fuel costs and taxes are insufficient to cover the cost of the damage done by shipping
Erm, WTF ? How is shipping from a central warehouse ANY different from distributing goods to individual stores scattered all over the damn country (i.e. in the traditional retail model) ?
So trucks do more damage on the roads than cars, but don't pay the proportionate amount of road taxes ? That's an issue to take up with the Department of Transport or whatever the local government equivalent is in your state.
It's nothi
Comment removed (Score:3, Insightful)
Re: (Score:2)
Re: (Score:2)
I for one welcome our new 15% state tax rate overlords.
Seriously, a statewide sales tax in NY would either shortchange and ruin NYC services or overcharge and ruin the always-failing upstate economy.
I wonder if they would like an opt-in program? (Score:2)
When you buy something, amazon brings up a page that states:
We understand that your state, and possibly city and local, governments levy taxes that may include taxes on the things that you purchased. Click here to send a report at the end of the month to the state, city, and local authorities regarding your purchases.
It's then up to the individual to determine if they want the state to take care of the accounting or if they want to do it themselves.
I'm glad everybody's discussing the article... (Score:2)
I'm glad everybody's discussing the article... but I have another concern.
What the holy hell is a "horselaugh?"
Re: (Score:2)
Welcome to the future. (Score:2, Insightful)
Where every single tiny loop hole in the law is exploited to the fullest by the large cooperations and everyone else has to obey the spirit of the law because they can't setup the giant shell game that is required to avoid paying taxes. How many fully owned separate legal entities comprise Amazon? It's all one giant cooperation for all intents but they break it up into a ton of little pieces to get around the spirit of the law. Leaving everyone else to have to make up for Amazon skips out on paying. It's no
Re: (Score:2)
Ikea is worse than I remember. The nonprofit ownership gave away 1.7 million dollars in 2004 and has a net worth of 36 billion.
That's .005%
You probably give a larger % to charity by just walking by a Salvation Army ringer once or twice during the holidays.
Taxless (Score:4, Interesting)
And then there are states like New Hampshire [freestateproject.org], with no state sales tax (and no state income tax, either)
I guess these dying dinosaur newspapers will concentrate their efforts where governments are largest and extract the most wealth from the serfs.
The press is self-interested on this topic (Score:5, Insightful)
They are talking about de-indexing Google for similar reasons.
We should understand the interests behind such attacks.
Doesn't invalidate their point, though (Score:2)
They do have a point, though. Why should a newspaper (and their online equivalent) pay tax when other companies can avoid it on the basis of what is basically BS?
Yes. taxes are a problem more because of their (Score:2)
cost to implement and track. they are accounting nightmares to keep up with.
Death, whores and taxes (Score:2)
Nothing to see here, move along (Score:2)
So the papers for two jurisdictions who have astronomically fucked themselves with their rampant fiscal incompetence want to steal more money from the private sector.
*Shocker*
It's Not Tax Evasion (Score:3, Informative)
As with catalog sales in the days before the Internet, Amazon.com is not required to collect taxes in any jurisdiction where it doesn't have a business presence. There's no trickery involved. Amazon doesn't collect any taxes it isn't required by law to collect, just like you don't pay taxes in states that you've never set foot in.
Since only the federal government can regulate interstate commerce, the ability of State X to force Amazon.com to collect its taxes when it doesn't have a presence in that state would require federal legislation to that effect. Also, for any such federal law to work it seems to me that tax rules and rates would have to be simplified across all 50 states. There's an effort to do so called the Streamlined Sales Tax Project, but despite its name it strikes me as ridiculously overcomplicated (as in "you need a certified computer program to handle the differences between each state's rules") due to the desire to please all the participating states.
Re: (Score:2)
Did you really just say that Linus Torvalds should pay taxes for the billions of dollars that Linux is worth?
On Slashdot?
By the way, I don't think that code has that much monetary value, since he can't actually sell it. Sure, the net economic gain from using Linux could very well be in the billions, but that doesn't mean the guy is ever going to own the Moon.
Re: (Score:2)
By the way, I don't think that code has that much monetary value, since he can't actually sell it.
That's not all that different from how cities calculate taxes on the assessed values of homes.
You misunderstood something (Score:3, Insightful)
It's not Amazon that would be paying sales tax. The buyer pays the tax. Amazon just doesn't want to a) deal with administering separate tax rates and payments to multiple States and b) have it's perceived prices increase with the addition of tax.
The funny thing is in general I agree with your view on taxation; it's just that in this instance your argument doesn't fit the issue.
Well to be fair (Score:2)
I say that intellectual property should be property taxed. Shouldn't the New York Times and the LA Times be charged a property tax for every back article they have ever written?
So shouldn't they pay nothing then? I mean you said they should be taxed on intellectual property but there's nothing intellectual about being a couple left-wing shill like those 2 rags.(And the Boston Globe Democrat who is pretty blatant about it.)
Re:Let the liberal media pay taxes for once. (Score:4, Insightful)
Guess what else the two newspaper articles failed to make completely clear...that the 'someone' is you and me. This isn't about Amazon paying more corporate tax, but Amazon collecting sales taxes from sales to everyday people. The internet has given the average person a small but noticeable tax cut. We obviously can't have the populace spending their money how they would want to, so we have to stop this right now.
Re: (Score:2)
The reason that Amazon has the advantage over all the local retailers that it puts out of business, is because it plays by different rules.
Yeah, like low overhead due to a lack of retail space.
Retail is on the way out whether etailers pay the same sales taxes as everyone else, or not. Arguably, they should, as they receive the same services as retailers. But etail has certain inherent advantages that, over time, will kill off all non-big-box retailers and leave only niche, specialty stores, Target, and Wal-Mart.
Re: (Score:2)
To be fair, the theory behind leaving corporations and the rich alone is that doing so will result in greater investment and more jobs. A trickle down, if you will.
Ok, so it's a goofy concept.
But it did sound like sound policy to a lot of people back when Reagan was president. The famous words that accompanied this new economic approach were "Government is not the solution to our problem. Government is the problem!" Long live unfettered free-market capitalism.
Small wonder that belief in government was su
Re: (Score:3, Interesting)
Re: (Score:2, Interesting)
Obeying the law is not a loophole.
Of course. It is: that's what "loophole" means - something that is within the law, but allows someone to avoid something to which, morally the should be liable.
Re: (Score:2)
Re:Only amazon? (Score:4, Informative)
Apple seems to handle collection of local taxes quite well. They even know that part of my zip code is PIMA county instead of Tucson city, and thus has a (slightly) different tax rate.
I am starting a business with a friend (actually, she does the hard work, and I provide the business and some financial backing), but we collect sales tax in Arizona, and California for selling our images. Amazingly, Quickbooks handles this fine. I just do not happen to live on an Indian Reservation, like Amazon did in placing their Arizona presence.
Truth be told, I do not pick retailers online due to tax free or not. I pick them by reputation, and past experiences. If Amazon one day started collecting taxes and whatnot for the goods purchased through them, I probably wouldn't blink. And I venture to guess that most of their customers wouldn't either. They need to rethink their business plan.
What this really points out is that the tax code (federal and state) needs a thorough cleansing and simplification. Remove the loopholes, tighten the standards, and make the collection and rates balanced, and much of this behavior should disappear.
I suspect I will see pigs flying before this happens though
Re: (Score:2)