Amazon Pushes For National Internet Sales Tax 392
SonicSpike writes "The Governor of Tennessee struck a deal with Amazon.com to allow their operations to move to TN in exchange for Amazon.com not having to collect TN sales tax for the next 2 years. However the Governor noted in his press conference that he is working with Amazon.com to push the US federal government to impose a national Internet sales tax."
amazon (Score:1, Informative)
RTFA: It nowhere says Amazon is pushing for this, the tenesse governor is, and hoping to work with Amazon for this. Amazon is not pushing for it, typical slashdot fud.
Here is why its good (Score:2, Informative)
tl;dr, version:
Online shops already have a lot fewer expenses, if they don't have to pay sales tax like brick and mortar stores have to, those stores close. Less tax is paid, there is less money to run a decent human society and you are fucked (unless you are one of the rich who doesn't give a crap about ordinary people)
Oh, and clearly Amazon is not in favor of this, evidently they are in favor of paying no taxes anywhere, because they don't care that much about supporting society, beyond selling people crap they probably don't need.
Re:make it opt-in for states (Score:5, Informative)
If it was only 50 it would be trivial to implement. The problem is most States allow individual counties to collect an additional percentage. There are 3,077 counties in the United States, according to Wikipedia [wikipedia.org]. On top of that, many municipalities also have the option of collecting an additional sales tax.
Add in that sales taxes vary depending on the type of item purchased, and in some cases county/city surtaxes are limited by the dollar amount of the purchase, and you end up with one hell of a convoluted mess if you deal nationwide.
For details see: http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States [wikipedia.org]
Re:make it opt-in for states (Score:4, Informative)
Solves some big problems, creates new small ones.. (Score:5, Informative)
If you've ever looked at the patchwork of sales tax rules in this country you can quickly see this solves a major problem. There are literally 10's of thousands of sales tax jurisdictions in the US, pretty much every county at a minimum, and often each city or town inside of the county. It's not just different rates, but also different rules. Food is taxed in one place, taxed at a different rate in another, and not taxed in a third. And what is "food"? You don't really want to know the answer to that question, it's probably 10,000 pages long! Having one rate, or perhaps one national base rate and a per state "option"; but more importantly one set of classification rules would really solve a major hurdle for small online retailers, and make it practical for them to collect tax.
The largest problem this creates is who gets the revenue? Taxes generally pay for infrastructure (roads, bridges, fire departments, etc), so it makes sense for some of the revenue to go where the seller is located, and some where the buyer is located. In brick and mortar sales these tend to be the same place, but won't be for Internet sales. Plus, Internet sales depend on transportation. The goods are shipped by truck and rail, probably across many states in the middle. Some of the money needs to go to those states to build interstates and airports and rail yards to get the goods from seller to buyer.
There are some other small problems. For instance if the money is collected and distributed via the fed, can it be used as a stick to get the states to do other things? The tax may be regressive, depending on how it is implemented. Many localities exempt food for instance as a means of assisting the poor, squaring those rules into a national set of rules will be difficult.
Still, overall I think the country needs something like this to happen. The idea that we can collect no taxes on a significant fraction of the business activity is just crazy. Many other countries already have a VAT tax because of issues like this, so the US is really falling behind. No one likes taxes, but we all like the things taxes achieve (on some level), so let's find the simplest, least evil, and fairest way to collect them. Going from 10,000+ sets of rules and rates down to 1 would be a huge step.
Re:Great (Score:4, Informative)
...why is national infrastructure paid for at a local level?
It isn't. National infrastructure (Interstate highways, for instance) is paid for directly by federal (national) funding.
Re:make it opt-in for states (Score:5, Informative)
3077 counties! Oh lordy! How would we keep track of so many different taxes? That would take either a big piece of paper, or several, even! Too bad there isn't a better way of keep track of lists of things...
First of all its by municipality, not county. Individual cities have different rates here.
Ah that's easy, once you have the data. How do you get the data? The expensive part is keeping track of the endless seemingly random changes. Is soda a tax free food or taxable luxury good in that city? How bout energy drinks?
Re:seems to solve an obvious problem (Score:4, Informative)
Amazon would collect and remit the payment to State B. Sales tax is collected against where the customer is at. This has be the law of the land for decades. It was settled when the Amazon was a Sears and Roebucks catalog.
Re:Great (Score:5, Informative)
It's not a troll, I seriously don't really get the idea of a single country being run by so many independant states as the US seems to be.
Umm... Aren't you guys a member of the EU? You're just now seeing the beginning of how Federal and state powers and responsibilities manifested in US history. Shortly after the unpleasantness with the your Crown, the thirteen states banded together in something very like the EU under the Articles of Confederation. It became clear after a time that the Articles were insufficient to bound the states together, much as it is becoming clear that something more substantial may be needed in Europe (at the least many member states are concerned about how much everyone's economic policy diverges). So we upgraded the capabilities of the Federal government in the Constitution. Over the next two hundred years the States and the Fed (and the locals and the states) have maneuvered, pushed, and pulled (and in part fought a war) into the current system. The Federal Government's power have increased substantially over that time, but the states rather jealously guard what they have left.
The answer to your more immediate question of why local governments are building national infrastructure, the answer is they don't. States do. States are not local governments. Even ignoring the history above, remember that the US is relatively huge vs. the UK. England (indeed, the entire island including Scotland and Wales) would fit into some of our larger states. A certain level of mid tier government between "national" and "local" makes sense. Typically states maintain the larger roads (sometimes with mostly their own funding, called "state roads"; sometime with additional federal money called "federal roads" or "Interstates"), and local governments maintain the smaller local roads. State and local governments get a lot of their funding from sales tax (like your VAT, but collected at the local and state level). So the issues here are:
1) It's hard for states and localities to collect sales on interstate mail order purchases (as throughout the Internet). They are pushing to legally require this on any business which operates inside their borders. This is becoming a larger and larger issue as online ordering becomes a larger part of the retail profile of many people.
2) Sales tax rates vary extremely from state to state and locality to locality. I live in Massachusetts, we have like a 7% sales tax. It's higher in Boston which collects a local tax on top of the state tax. An hour north of me is New Hampshire which has no sales tax at all. Amazon and some other online retailers claim that this makes sales tax collection unduly complicated for them, so they want a national sales tax.
3) The difficulty presented by the OP is a real one. If the Feds start to collect a national sales tax on online orders as a proxy for states and localities how can you fairly divide up the proceeds. Should every state just get a percentage based on population? How's that work when many more people in say California or Massachusetts are much more likely to shop online than people in Mississippi? How do you handle getting local governments their share? Should people in states like New Hampshire, that have no state sales tax, have to pay? Should those states get any of the proceeds?