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Slate: Amazon's Tax Stance Unfair and Unethical 949

theodp writes "We've talked before about Amazon's reluctance to collect sales tax, with Jeff Bezos going so far as to say it's unconstitutional. So it's not too surprising to see Amazon support a California referendum to repeal sales tax for online retailers. Slate's Farhad Manjoo loves buying from Amazon and would hate to pay higher prices, but says the e-tailer 'has no intellectually sound arguments against collecting taxes from residents — by all ethical and civic standards, its position is unsound.'"
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Slate: Amazon's Tax Stance Unfair and Unethical

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  • by Osgeld ( 1900440 ) on Wednesday July 13, 2011 @11:24AM (#36748978)

    you know they have warehouses scattered about the entire country right? So how is it any different than other e stores, for example if I buy from newegg I pay sales tax, its not a company based in my state, but they do have a warehouse located 3 hours southwest from me

  • by Bill_the_Engineer ( 772575 ) on Wednesday July 13, 2011 @11:25AM (#36748992)

    Someone please tell me how a corporation based in Washington State and legally incorporated in Delaware suddenly becomes a tax collector for states in which it does not have a physical presence?

    I think the problem Amazon is having is that they had associates that were based in California. These associates have a physical presence in California and forces Amazon to abide by state law. Amazon wants to continue to have an associate program, yet not have to keep track of sales tax for each state that an associate exists. This is why Amazon is lobbying for this referendum in California.

  • by salesgeek ( 263995 ) on Wednesday July 13, 2011 @11:29AM (#36749058) Homepage

    Here's what California has done:

    They changed the definition of having a location in California such that if you have a 1099 contractor doing advertising for you, you have a location in California, and therefore have to collect sales tax.

    This is unconstitutional and irrational at the same time. If I hire an ad agency in your state, that does not mean I have moved there. It's no different than hiring an accountant, lawyer, or for that matter, a shipping company with a location in your state to define location (nexus). There's a reason why our constitution gives sole power to regulate and levy duties (tax) interstate commerce in a *uniform way*. This prohibition is to prevent trade wars between the states and to prevent large states from using taxation to force businesses to relocate there.

    OK, so what about the poor, local businesses being put under by

    Well, if you are a small local business, and sell mail order, you don't have to collect sales tax for shipments to anywhere other than your home state. That gives you an advantage in 49 states.

  • by hibiki_r ( 649814 ) on Wednesday July 13, 2011 @11:56AM (#36749516)

    But there's plenty of companies that have very little trouble doing this: I currently work for one. We sell online, but we have presence in every state, so we collect taxes in every state. Not only that, but we have retail stores, which deal with specific local taxes built on top.

    As it happens, there are databases that you can purchase that have all the tax information you could possibly want, and all you have to do is import their updates when they happen: You can call a method that hands you the right tax rate based on the merchandise type and location to ship it to. The right accounts in the general ledger are updated so that we know how much we owe to each state/municipality, and then AP cuts the states the necessary checks.

    Yes, it'd me madness to have to track of it all by yourself, but at that size, you don't have to. And Amazon is definitely large enough to handle that complexity without ruining them: The only question is whether they are legally obligated to collect the taxes or not.

  • by hibiki_r ( 649814 ) on Wednesday July 13, 2011 @12:01PM (#36749616)

    It's not about one person paying a higher sales tax rate than another, but the fact that the total percentage of your income that get hits by the sales tax has a lot to do with how much you earn. A minimum wage earner will have trouble saving, so most of his income is hit by sales tax. The more you save, the less tax you pay, and given that it's easier to save the more money you have, in essence its effect is not all that different from an income tax that asks for less the more money you have.

    By your idea of fairness, a 95% tax surcharge on cars over $25K would also affect everyone the same way. It just happens that the people that don't own cars and those that couldn't afford a car with that base price would not get a tax hike. So really, it's an extremely uneven task under the guise of fairness.

    The sales tax just punishes those who can't save.

  • by jcr ( 53032 ) < .ta. .rcj.> on Wednesday July 13, 2011 @12:17PM (#36749900) Journal

    Actually, the Declaration of Independence is law. It's an act of Congress, and as Judge Napolitano has pointed out on several occasions, if you have a copy of the United States Code, it's there right in the front of the first volume. It is in fact the beginning of American legislation.


  • by spire3661 ( 1038968 ) on Wednesday July 13, 2011 @12:23PM (#36750054) Journal
    You get the true context of the 2nd by reading the founders' papers.

    "No freeman shall ever be debarred the use of arms. " ---Thomas Jefferson: Draft Virginia Constitution, 1776.

    "One loves to possess arms, though they hope never to have occasion for them. " --- Thomas Jefferson to George Washington, 1796. The Writings of Thomas Jefferson, (Memorial Edition) Lipscomb and Bergh, editors.

    "[The Constitution preserves] the advantage of being armed which Americans possess over the people of almost every other nation...(where) the governments are afraid to trust the people with arms." ---James Madison,The Federalist Papers, No. 46.

    "Who are the militia? Are they not ourselves? Is it feared, then, that we shall turn our arms each man gainst his own bosom. Congress have no power to disarm the militia. Their swords, and every other terrible implement of the soldier, are the birthright of an American...[T]he unlimited power of the sword is not in the hands of either the federal or state governments, but, where I trust in God it will ever remain, in the hands of the people. " ---Tenche Coxe, The Pennsylvania Gazette, Feb. 20, 1788.

    After reading these comments from the men that founded our nation, it never even OCCURRED to them that we might want to lessen weapons in society. They deem the right to bear arms INALIENABLE. It doesnt get much fucking clearer then that.
  • by BCoates ( 512464 ) on Wednesday July 13, 2011 @12:36PM (#36750354)

    NH is mostly a mixture of exurbs and retirement/vacation homes for Boston, so it's economic model is "leech of the city" and it's social safety net is "move to Massachusetts". California has nowhere to beggar-thy-neighbor to.

    New Hampshire has the lowest birth rate in the nation, California's is above-average. Children are expensive but necessary.

    Small states tend to do a better job getting their money's worth from the federal government. California is a massive wealth exporter to the rest of the country. The California federal tax/spending shortfall is about the same size as the California budget shortfall.

  • by Solandri ( 704621 ) on Wednesday July 13, 2011 @02:41PM (#36752406)
    We have something called a Supreme Court for deciding semantic arguments such as yours when the wording of the law is ambiguous or could have multiple interpretations. And the Supreme Court of the United States has decided that interstate sales taxes [] are indeed a duty prohibited by the Constitution [].

I've got a bad feeling about this.