Amazon Says No to the Golden State

• Report this Comment On July 01, 2011, at 8:02 PM, lucasmonger wrote:

  I know people probably don't want to hear this, but when it comes to taxes, we've made life completely difficult with tremendously long and convoluted federal tax forms, all sorts of state and local taxes, property taxes, etc. I'd like to propose we just eliminate all of this and go to a simple consumption tax, it could be 30-45% on all goods that are not deemed necessary (groceries, medicine, toilet paper could be exempt) and the fed, state, and local all divvy up the rest to pay for roads, schools, cities, etc. The IRS would no longer look for tax cheaters and instead enforce the collection from retail sales. In the end, it should be about the same amount that taxpayers pay anyway, except drug smugglers and other nefarious people would also be paying their fair share every time they buy that big screen tv, fancy car, or diamond jewelry. And if the ecommerce folks also need to collect this tax just like the big box retailers, that levels the playing field.

• Report this Comment On July 01, 2011, at 8:24 PM, krkkrk wrote:

  Amazon shouldn’t be able to dodge sales tax collection by simply cancelling affiliates.

  Amazon has several subsidiaries in California:

  >Lab126 Kindle R&D subsidiary operating in Cupertino,CA

  >A9.com search subsidiary in Palo Alto,CA

  >a2z development center in in Orange County, CA; San Francisco, CA; and San Luis Obispo, CA.

  >IMDb Movie Database company in Los Angeles,CA

  >Alexa toolbar company in Presidio, San Francisco, CA

  If all this does not constitute “Nexus” then surely this California legislation was very ineptly drafted.

  Juxtapose this with a red state, Texas, going after Amazon for $269 million in uncollected taxes on account of a small distribution center in Irving,TX

• Report this Comment On July 01, 2011, at 9:04 PM, wolfhounds wrote:

  Nexus is still governed by the law of the land. While Amazon may have research subs. in Cal.. they are not engaged in sales, stocking shelves, carrying inventory, having physical warehouses, and the myriad of "legal activities" the Supreme Court many years ago defined as causing nexus to exist for the purpose of collecting sales tax (as opposed to income tax which has different requirements).

  California is learning a very difficult lesson which should not have been repeated. In this case, as in other states, by increasing the costs of transactions (not the tax itself) it has lost revenue by reducing in state income from associates. Yes, most states require residents to report sales from out of state as "use taxes". Good luck with that.

  Which brings me to the law of economics which has been around since the Industrial Revolution. Capital will flow to where it is cheapest. Even California cannot interfere with that.

• Report this Comment On July 01, 2011, at 10:43 PM, SpaceVegetable wrote:

  This tax law essentially amounts to taxation without representation. Why should an out of state retailer, who receives no benefits from the state's tax receipts, be forced to shoulder the expense of collecting taxes for that state? It's not a small expense, either. There are 8000+ different tax jurisdictions in the US, with varying rates and layers of rules for which items are taxed and how much. Plus, every item sold by the retailer would have to be categorized appropriately for all of those jurisdictions. And don't forget the reporting of the taxes. Even 50 quarterly reports is a lot.

  Any perceived advantage that online retailers might have in pricing goes away when you consider the expenses they have that bricks and mortar retailers do not. Things like shipping, packaging, packing, computer servers, internet bandwidth, and the staff to support all this. With buyers clamoring for free shipping these days, there's only so much of that expense that a retailer can pass along to the consumer. Shipping is not cheap and is only getting more expensive. Once you take all of that into account, there's not really an advantage for the online retailers.

  There's no unfairness in the current model, despite what the bricks and mortar retailers would have you believe. I'm sure they would love to see their online competition saddled with the heavy expenses of collecting thousands of different tax rates, as opposed to their very few. Talk about unfair...

  CA and other states who have enacted these nexus laws are only shooting themselves in the foot because they'll simply lose the income tax paid by the affiliates once companies like Amazon drop them. It's just desperate grabs for cash by fiscally irresponsible governments.

• Report this Comment On July 02, 2011, at 1:02 AM, jesterisdead wrote:

  @lucasmonger Take a look at FairTax. It is similar to what you are describing for national taxes and being supported by more and more politicians (Huckabee, Cain, Steve King, etc.)

  A national tax that includes state taxes would give too much power to the national government, taking power away from the people with no clear boundaries between federal and state. Good idea, but I don't trust the federal government to spend what they have now. They have already raided social security by adding it to the general fund.

  I agree with Dick Durbin's plan - eTailers need to start collecting sales tax based on the address they ship to. This is effectively the same thing B&M stores do now - why should they be exempt? While our federal income tax and fees may be pissed away on campaign supporters through "bailouts" or pork-barrel projects, state taxes go to pay for our schools, emergency services and roads. I take advantage of the online tax breaks more than most people, but I also am realistic. We need to pay state taxes.

• Report this Comment On July 03, 2011, at 10:01 PM, FoolSolo wrote:

  BAD IDEA!!!

  California, and any other state trying to put the tax squeeze on out of state sales will just backfire. Before long, the big online sellers will just register offshore and further dilute our economy.

  While I would prefer a consumption tax over the convoluted and ridiculous federal and state tax systems, it needs to be done in a way that makes it easy for the retailers, and balanced and fair for all consumers. However, this kind of legislation has to be packaged together with a national tax overhaul plan, not just a bunch of one-off state tax grabs like CA, CN, AK, IL and others are doing.

  When I travel all over the country, I don't pay sales tax to my home state, I pay tax in the state where I purchase the goods. If a consumption tax has to be implemented and online retailers are forced to collect taxes, then it should be done the same way, taxes payable to the state where the business is headquartered.

• Report this Comment On July 04, 2011, at 5:51 PM, GreatDaneLvr wrote:

  I don't feel the sales tax "disadvantage" is a viable argument. Buyers have to pay shipping. The fact of the matter is, there is less overhead with online sales. Buyers opt for online for many reasons; convenience, cost, inability to find it locally, and/or the inability to go to the retailer. The opposite side of that coin is the buyer cannot try it on before buying, see it, etc. and if it turns out it won't work once it arrives, the buyer has to be bothered with returning the item and paying that postage.

  Personally, I think online prices for many things aren't that great a deal when additional costs are factored. A smart shopper is just that, one that looks for the best way to purchase an item at the best possible price.

  To impose clerical burdens and costs upon the online retailers is anti-capitalism.

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