Amazon To Pay Texas Sales Tax 274
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.'"
A red state raising taxes!!??!!!??? (Score:5, Funny)
What! I thought they were all against job killing taxes!
Re:A red state raising taxes!!??!!!??? (Score:5, Insightful)
Re:A red state raising taxes!!??!!!??? (Score:5, Insightful)
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?
Re:A red state raising taxes!!??!!!??? (Score:4, Insightful)
"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.)
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I know states will get you on something large like an automobile because you have to get a title, BUT you also DIDN'T owe sales tax in the state you purchased the car, (but that state forces the dealer to collect on all sales) so they often credit the paid tax and you pay the difference so it's not double dipping.
Smaller merchandise falls under personal property because you paid the legal tax at point of purchase and own the product.
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Reference, please. Pretty much everywhere I lived where there is a use tax, it only applies if the place where you have originally purchased the item didn't tax you on that purchase, or taxed you at a lower rate.
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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
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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
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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.
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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.
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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.
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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.
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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
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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
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Re:A red state raising taxes!!??!!!??? (Score:4, Insightful)
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).
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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
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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.
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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.
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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
Re:A red state raising taxes!!??!!!??? (Score:5, Informative)
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.
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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
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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.
Re:A red state raising taxes!!??!!!??? (Score:4, Insightful)
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."
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I'm pretty sure they actually intend for the poor to eat used food in the fair tax dystopia.
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Re:A red state raising taxes!!??!!!??? (Score:5, Insightful)
The cost of the IRS is and always has been a red herring. We each pay about $40 yearly to fund the IRS. Not even all of that will go away, as you still have to have somebody make sure taxes are being payed and a bunch of bean counters to manage a prebate. You either have to have each person continue to file yearly or you have to have the manpower to audit an individual business and examine records down to the per-transaction level. Either way, you aren't going to be saving all that much money.
Meanwhile, rich people spend a tiny fraction of their income on anything that would get touched by a consumption tax. If you think Romney's 14% tax burden is low now, wait until you realize that he probably only spent 10% of his income for the year, giving him an overall tax burden under a Fair Tax system of somewhere in the lower single digits. Now, to go back to raising the some number of tax dollars as before, like you mentioned: if Romney is going to pay less and the total value is going to stay the same, where do you think the money Romney won't be paying will come from? I'll give you a hint: the middle class.
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Less than .3% of our population is here illegally, and they are among the poorest people in the country. Sure, you might get a nice tingle from making sure people aren't dodging their taxes, but the effect will be in the realm of a couple of tens of billions dollars on a budget measured in trillions. It is all a bunch of feel-good nonsense designed to distract from the core objective of anything that remotely resembles a Fair Tax: to pillage the middle class and line the pockets of the rich.
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It is all a bunch of feel-good nonsense designed to distract from the core objective of anything that remotely resembles a Fair Tax: to pillage the middle class and line the pockets of the rich.
Are you claiming that now, without a Fair Tax, the middle class are not being pillaged and the pockets of the rich are not being lined? I'm not an American and don't know the merits or otherwise of this tax proposal, but I'm curious what you think is in place now that will prevent the pillaging of the middle class and prevent the pockets of the rich being lined?
Re:A red state raising taxes!!??!!!??? (Score:5, Interesting)
How does it increase compliance? Unless you force everything to electronic transaction (and watch the privacy advocates on /. have a fit about that). It doesn't increase compliance, it eases it, those are two different things. I'm not an american, but I believe for out purposes I face a similar problem. My income is derived from 3 sources, work, scholarships, and research grants. My work income is obvious enough. Scholarships aren't taxable, again, obvious enough, but they do count towards total family income for certain low income benefits, and different benefits may or may not count them. Research grants are taxable, after expenses, and what is a valid expense can involve dozens of pages of paperwork.
If they were all just 'income' that would significantly ease my compliance costs, because I don't have to spend 8 or 9 hours every year reading through this years rules and sorting out all of the various ways those rules apply.
But that doesn't mean it increases compliance. In fact, with higher point of sales taxes it's in my interest to not declare purchases or sales of services to the government, since that could cut down costs for my customers and myself by 20% (if I was in the EU for example), and it would give me a competitive advantage over a big company that can't do that. Which is exactly what happens in Italy and Greece, and is presumably now happening in spain. Those huge masses of 'unemployed' people in spain and greece aren't just sitting around posting on /. all day. They're working under the table so to speak, and of course, unreliably. Cash transactions facilitate this because they aren't traceable.
Fundamentally the US, Canadian and a few other systems assume tax payers are trying to be honest. That's as flawed an assumption for the "Fair Tax" as it is for the existing income tax structures. Some countries happen to be more honest, or coerced into compliance through the use of credit cards and mobile phone payments etc. (e.g. Japan and Sweden) and some are quite happy to do business in cash under the table, for everything (Italy, Greece, India, Bangladesh). Making it easier for people to comply doesn't mean they will, and the more 'in your face' the tax is, the more likely people are to try and dodge it.
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A lot of the stuff that the rich buy in larger proportioins than the poor (legal and financial services for example) are not taxed, at least not in Texas which has a high sales tax.
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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
Note to all governments (Score:4, Insightful)
How about stop spending more money than you have?
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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
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No, they have a tax on items imported from another state and then kept within the state of Texas and used by a resident.
Many if not most states have a similar tax.
Re:Note to all governments (Score:5, Insightful)
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.
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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?
Note to uneducated repubs (Score:2, Insightful)
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.
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Amazon Internet Usage Fee.
The law says "Brick and mortar presence". It may not say "Amazon" on the front, and I'm a self-confessed Amazon fan-boy, but if you set up a 100% owned brick-and-mortar subsidiary in the state, then yeah, you owe them taxes or you need to set up in a state in which you won't. Figure out whether you come out ahead making 0% taxed sales from Texas or shipping from somewhere else.
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It's shorthand for 'state issues bonds it may not be able to repay'.
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I thought that was what "tax-cut" was shorthand for.
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I think that's 'state may cause itself to be unable to repay bonds'.
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Ultimately this boils down to "members of one party signed pledge they'd never raise taxes, do everything they can to conduct business as normal without raising anything explicitly called a tax".
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Government spending as a percentage of GDP is not that different from what it's been since the 1940's.
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hey cocksucker, the problem is the spending.
the revenue is. what. it. is.
it's the spending that is off the charts.
It is definitely partially a revenue problem... a big part of the US problem is unfunded "temporary" tax cuts made by George Bush. Given that they were "temporary", they didn't fund them.
Also, I believe in determining what the government should do first (not all it does today, at least in Norway) and then see how to fund it afterwards. And then go over the list again with an even more critical eye.. But things like education, defense, police, healthcare and public infrastructure need funding at a certai
Texas gov gives huge corp tax breaks (Score:4, Insightful)
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Tax Cuts = Job creation...right!!? (Score:2)
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Location based? (Score:5, Interesting)
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It's based off the address you give them.
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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)
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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.
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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
Re:Location based? (Score:5, Informative)
Why? (Score:4, Insightful)
Doesn't this violate the US Constitution?
Or are they arguing that Amazon "has a presence" in Texas?
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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".
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It seems Amazon is planing to expand to Texas (creating 2500 jobs, according to TFA), so they'd have to play ball anyway.
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A distribution center isn't a business? Or are they distributing without charge or paid employees from public lands?
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These Amazon distribution centers are operated by wholly owned subsidiaries. Amazon claims that it's not their sales business that has a business presence there, but rather the subsidiaries which are technically separate companies that just happen to be owned by Amazon.
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From the way it was reported, it seemed Amazon was fairly clearly in the wrong, but Rick Perry (for better or worse) stepped in when Amazon threatened to close down the distribution center if Texas made them pay sales tax.
I think Texas and Amazon worked out a deal where Amazon would pay sales tax "after a while" and this is probably that
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This changes the whole equation: if Amazon has a distribution center in TX, then that certainly counts as a "physical presence", and the way I understand it obligates a mail-order seller to collect sales tax. The way most mail-order sellers get out of it is that they really don't have any physical presence: none at all, including no "affiliates", or distribution centers owned by a shell company or other such legal trickery. Most sellers are based in one state only, so that's the only state they collect sa
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Same here in Nevada. They have a huge warehouse 25 miles up the road and yet no sales tax on purchases. Whenever I buy from any other company online that has any presence in Nevada they always charge me sales tax. Amazon has been the exception, not the rule. I do enjoy the free super saver next day shipping though.
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This also explains Woot's decline.
I'm in Texas and have already gotten charged tax (Score:4, Informative)
Well, a good reason to use other sites... (Score:5, Insightful)
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.
Re:Well, a good reason to use other sites... (Score:5, Informative)
Texas does have one of the lowest per capita state debts, being 45th or so.
It also has an absolutely rubbish education system (49th in verbal SAT) and the largest percentage of minimum wage workers in the US. These crappy jobs of course don't offer health care coverage as often as better paying jobs. The unemployment rate is right at the national average at 8.2%.
While it does lead the nation in job growth, it is also leading the nation in population growth.
And that's despite being wealthy in natural resources like oil.
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> Hint: It's the hispanics and their anchor babies that increasing the population growth. Learn Spanish.
Nah. People are moving to Texas from all over the US.
http://www.economist.com/blogs/freeexchange/2010/06/migration [economist.com]
Fair? (Score:4, Interesting)
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)
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)
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.
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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
Argh. (Score:2)
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.
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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.
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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
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Well, sure. I didn't mean they should break the law, just that the law should be changed.
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Haha, I should have elaborated that we should eliminate sales tax entirely, but if we must have it then it should be restricted to things that aren't absolute essentials. I agree with you on that front.
Excellent (Score:2)
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.
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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).
Pennsylvania is making them collect next year (Score:4, Informative)
The real problem... (Score:2)
...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
Tennessee (Score:2)
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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You would only pay this if you lived in Texas...
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We got ourselves a class A retard here. Did you even read the first sentence? It clearly says 'collecting sales tax from buyers in Texas'. If you live in Texas it is not a 'foreign government'. Secondly, your catch phrase has no legal weight. It is just tat, a catch phrase.
Re:Good thing I don't live in Texas (Score:4, Informative)
Does Amazon have operations on the ground in Texas?
Yes, they do.
Also, California, Florida, Missouri, New Jersey, Virginia and Washington, of course. That's as of four years ago. Probably more, now.
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Does Amazon have operations on the ground in Texas?
Depends one what you mean by "Amazon" and what you mean by "operations". The companies are saying they don't while the states are trying to argue that they do, sometimes including rewriting laws. In this case, IIRC, Amazon, the main company is not in Texas, but it does own a distribution company that ships stuff people buy from Amazon, although the distribution company buys and sells nothing, just provides a service. In the case of CA and NY, it was a matter of the states rewriting laws so that if Amazon ev
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I don't really understand why they're doing this. This deal seems rather short-sighted: charging TX customers sales tax is going to reduce their revenues (and profits), since some customers will switch to other online sellers that don't charge sales tax. Why not stay out of Texas altogether, and build their distribution center in a much smaller state like Oklahoma? Texas is a huge, heavily populated state with tons of potential customers. Oklahoma and Arkansas are much smaller, but right next door, and
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Most likely they believe that writing is on the wall with respect to some form of national sales tax, or at least some arrangement by the Congress that actually permits the states to collect those taxes for out-of-state purchases.
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Like the subject says: good! Hopefully, more states will continue to do the same. I'm really tired of seeing of people gleefully dodging sales tax.
Really? It's the only tax I don't mind people dodging, because it's the only (major) tax that hurts you more the less you make.