Skip to comments.Amazon.com: State stands up to anti-tax attack
Posted on 03/04/2011 3:30:36 PM PST by SmithL
Is Amazon.com getting nervous?
How else to explain its intemperate letter threatening to put more than 10,000 Californians out of work should the state even think about enforcing the collection of unpaid sales taxes on Amazon and other Internet retailers?
"I'm not surprised by what Amazon's done," said Board of Equalization Chairwoman Betty Yee. "I think it's their way of getting California to back off."
Support has been growing for legislation, backed by Yee, that would clear the way to collect an estimated $1.145 billion in unpaid taxes that out-of-state online merchants such as Amazon, and catalog houses such L.L. Bean, have thus far successfully evaded.
"If any of these new tax collection schemes were adopted, Amazon would be compelled to end its advertising relationships with well over 10,000 California-based participants in the Amazon 'Associates Program,' " the company wrote to a receptive Republican tax board member, George Runner.
The "associates," or affiliates, get a cut of every sale Amazon makes to customers via a click-through from affiliates' websites.
"Amazon has made it clear to me that the checks they send Californians will be cut off overnight if pending legislation aimed at regulating their operations becomes law," said Runner, one of the elected board's five members.
(Excerpt) Read more at sfgate.com ...
My friends and I have a similar conversation about our miniature hobby.
Online retailers get to offer massive discounts, and dont pay taxes to boot. The brick and mortar stores are going under and nothing is replacing them because they cant compete. That in turn shrinks the community, which as you can guess, causes more closures.
I love shopping online and saving cash. However, is this type of business going hurt location based retail to the point where there is no physical competition? Leaving only a handful of large international retailers to sell those got to have it now purchases may not be a good long term strategy.
These B&M stores provide entry level employment to millions of Americans. (Some even born here and speak English) Without those jobs and experience available to our job market will the work ethic be even worse than it is today if online stores push more small retail sellers out of business?
Any small business owners what to offer their point of view?
I must have missed the part about Amazon collecting the sales tax. First I heard of it.
It would be considered a “Use” tax I suppose. I live in Cali and I know on the state tax forms they ask you if you have bought anything from another state that you are using in Calif if so they want you to pay tax on it. It is ridiculous and a money grab IMO
That's lefty talk if I ever heard it.
You are not commenting from any "right wing foxhole". You're a liar, and I'm calling you on it.
I dont think they are charging the tax I think Yee is asserting by annual revenues how much tax would be due and they want the money if this is the case than Amazon should not have to pay on the otherhand if Amazon is charging the customer sales tax than they need to give the money to California but I do not think they are
What you say may be true but check out Amazon’s longer history of trying to screw states out of taxes
I have no idea what you are talking about.
Amazon is a publicly traded company. Its responsibility is to make money for its shareholders. It's free to trade and free to not trade with anyone it chooses.
... "In the name of the general welfare, to protect the people's security, to achieve full equality and total stability..."Sounds similar to the Fed's charter ...
“Why should local mom and pop cover the high life at Amazon?”
Because the local mom and pop enjoy the benefits these local taxes provide. Any benefits to Amazon are merely tangential.
Amazon didn’t collect any sales tax from you, so there is nothing to forward. Amazon collects sales taxes for WA state residents because it has a physical location in WA. It does the same thing in other states where it has physical locations — warehouses, offices, etc. People in those states paid more for the same item you purchased than you did because Amazon collected and forwarded the sales tax. Amazon is following the same laws as any other business. Online retailers in CA that sell products to NV residents don’t collect NV sales taxes or CA sales taxes, either.
Oregon has no sales tax. If you go to Oregon and buy a TV, do you expect the store — which has no system set up to collect sales taxes — to figure out how much sales tax you owe based on your state, county, and city of residence, and then forward that money to your state, county, and city ? Doesn’t that seem ridiculous to you ? Imagine the burden on that Oregon business to be aware of every sales tax rate for every other combination of states and counties, etc. all around the world, so that it can collect and forward a sales tax to all those other entities.
This is why the Supreme Court has ruled repeatedly that a business is only liable to collect and forward sales taxes for those locations where it has a physical presence.
I live in PA, and Amazon opened a warehouse in Allentown, PA last year. I just bought something last week, and there was no tax. Hope we don’t start getting taxed here...
The logic is that the item was sold by a Californian and it is therefore entitled to the taxes. This will not end well. The insane appetite for taxes on all levels of government will turn this country into a third world backwater with all business and companies moving to countries with cheap labor and low taxes top start the whole game over again.
You need to change with the times. Brick and mortar businesses in the digital age are a thing of the past. More than half of sales of books at Amazon are digital. Most music now sold is digital. The time will come where other products will be shipped from warehouses abroad. Only limited business such as food distribution will remain at the local retail level. It’s called progress..
Why do you live in the screaming fascist pinwheels-for-eyes liberal utopia known as Kalifornistan?
You need to get mobile.
Yeah, those tax-evading bastard tax-cheats @ Amazon are fiscally starving those adult, monetarily-responsible states whose ONLY CONCERN is making sure the money from their state taxpayers is spent wisely, frugally & not squandered like tweaking, coke-snorting drunken sailors on their first day in post.
Its called progress
Some taxpayers are more equal than others.
If I’m not mistaken, Amazon’s HQ is in Seattle, not in California. It sounds like California is trying to tax whatever they sell to Ca residents, and Amazon’s threatening to stop using partners (advitisers, etc.) from Ca in return.
If a California “Associate” of Amazon has a link that leads to the Amazon website, and a sale is conducted on Amazon.com during a session that originated on the associate’s website, Amazon pays that associate a nominal fee.
What California is saying is that the fact that the associate is in California, then Amazon has a physical presence in California and is obligated to collect sales tax from Californians who order from Amazon.
Amazon will simple remove it’s so called physical presence from California by terminating it’s California associates.
If someone is making money from Amazon by selling referrals, shouldn’t these affilliates making the money be the ones owing the tax to the state?
As far as I know, Amazon does collect CA sales tax when it sells books and things to CA residents.
Which is BULL because residence, at least in CA, still have an obligation to pay taxes as if they bought the item at an in-state retailer. The state is cracking down on those who aren't voluntarily paying use taxes to make up for lost sales tax because purchases were made out-of-state. If Amazon collected at purchase, it would make life much easier for customers.
I'm not saying the protection racket known as use taxes, dating back to 1935 in CA, is a fair system just that it's the rules we operate under.
As I said, I could see your point if we are talking about purchases by CA residents, but from everything I’ve read it seems CA wants tax on all purchases made through CA affiliates, regardless of purchaser’s residence.
This reeks (to me) of state’s attacking online tobacco merchants to get them to collect taxes, sales and excise, for online purchases. I didn’t hear any hue and cry about all of those businesses, many which also had brick and mortar operations, going out of business.
If someone in California buys something in Washington, the store in Washington does not collect California taxes and send it to California.
When you buy from Amazon.com, you are buying in the State of Washington.
Its the customers that are saving the tax, not Amazon.
California sales taxes average 10%. The customer pays those.
You want to help the economy you cut taxes, proven over and over again.
The average citizen in California benefits from Amazon’s policy, but it is a detriment to small business located here.
If small business realized how much more product they could sell if sales taxes were lower or went away, they’d side with Amazon too. That’s what the state government fears.
If Jerry Brown would cut the California state government back to the size it was when his dad was governor, there would be no problem at all with lower sales tax.
Stop giving them ideas!
Small business owners have to unite to help lower taxes.
They’re just patsies if they do nothing.
The Zombie state that the oligarchies have been trying to create for centuries.
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