Posted on 10/25/2010 9:44:06 AM PDT by epithermal
According to Amazon, last month the state of Texas issued the company an assessment of $269 million for uncollected sales taxes for a four year period from Dec. 2005 to Dec. 2009. Amazon says the assessment is "without merit" and says it intends to "vigorously defend" itself in the matter.
(Excerpt) Read more at techflash.com ...
“”Amazon.com has a brick and mortar or other physical presence within Texas?””
As an owner of a bookstore for about 10 years whgo closed due to the online competition, this is a sore subject with me. Amazon should have been paying sales tax all along.
The reason, they have an agency program where they pay commissions to people who are located in those states. Thus they have representation and are therefor subject to the sales tax. I have gone through many sales tax audits with clients, even several out of state sales tax audits for in stae sales delivered out of state. The requirement is not a “bricks & mortor” qualification. It is representation.
That all depends. If you order on-line or via telephone (catalog), and the company has a brick-and-mortar presence in the state in which you reside, it is responsible for collecting sales tax on the purchase.
If not, then you are responsible, as most states have a use tax provision to accompany the sales tax. That is to say, if you bought something out of state, and didn't pay sales tax on it in your home state, and you use/consume the goods in your home state, you owe use tax on the goods to your home state. This is a generalization, as there are many factors used to make that determination, and your home state won't care if you knew the rules or not if you get caught. Most folks either ignore it, or are unaware of it.
you start the tax collection process in order to force the determination of its validity
“let’s hear some more about how conservative texas is”
“Flyover country” in Texas is VERY conservative. The problem is Rat infestation in a few of larger cities and wherever illegals congregate.
Amazon has known this fight was coming for a long time. I’m sure they are ready for it.
I have to say though that one of the main reasons I often buy from Amazon is to avoid sales tax on bigger ticket items. I live in Missouri but I’m sure sooner or later my state will target Amazon on some pretext.
“If a Texan goes to Seattle and purchases a hotel room, does he owe Texas taxes on that room? Or if he buys clothes, jewelry, rents a car, buys furniture, electronics or anything else? Nope.”
The real question here is hwere did the sale take place.
There are several factors to consider:
1. Where was the order place?
2. Where was it shipped from?
3. Was it shipped by common carrier or private carrier?
4. Does the seller have representitives in the recipient state?
5. Is the object sold subject to “use tax” by the purchaser?
These are just a few...
Rhino (Warner Bros.) charged me 13% sales tax to a shipment in Texas. Our sales tax tops out at 8.25%.
Think they hit me for Texas AND California sales tax?
I asked them for the justification for this rate that exceded Texas’ own but they gave no response.
T””hink they hit me for Texas AND California sales tax?””
Legally they can’t.. But California has the biggest sales tax pricks of all the states. They even won a case to tax religious materials.... Businesses give in to them rather than argue with them. The sale cannot take place in two places at the same time.
It’s not that much of a nightmare. Back in the pre-internet mail order days the rules were simple and followed by most companies: if they had a physical presence in the state they had to pay sales tax there for orders that stayed within the state, which meant they charged customers who lived in those states sales tax. If you remember old mail order forms they always had these lines in the math part of the form that said stuff like “residents of FL, AZ and OH add 5% sales tax”.
For whatever reason when internet retail started up everybody pretended that they weren’t mail order and didn’t have to follow the same rules as the Sears Catalog. The fact is they are mail order and have to follow the same rules, and since they could manage to pull it off in the pre-computer days I’m betting it won’t be that hard in the computer days. Really all you need to do is know what states you have a physical presence in, know their sales tax, and if the billing address of the orderer is in one of those states apply the sales tax. It’s like 1 SQL table and 1 query.
As for resellers, if Amazon is smart they have in the terms of service that the business has to handle their own legal stuff. But they need to follow the sames rules, if your business running through Amazon has a physical presence in a state and the orderer is also in that state you need to pay the sales tax. You don’t have to pass the bill on to the customer, but you still gotta pay.
And of course eliminate the Income Tax.....
I can dream......................
No it wouldn’t. Unless that national consumption tax somehow outlawed individual state level sales tax.
Not so easy, as I said, with different counties having different sales tax, within the same state. Here’s Florida’s 67 counties and you’ll see, not a uniform sales tax. We do collect to things sold within our state, just saying if we have 49 other states with similar variations in sales tax to FL, then it’s going to get “very interesting.”
http://miami.about.com/od/governmentcityservices/a/salestax.htm
And the last thing we would want is the the Fed's deciding who got what...from a National Consumption Tax...
Okay...so what's your answer?
Nope very easy, mail order companies only have to worry about state sales tax, cities and counties get stiffed. You would only have to worry about 49 other states if you had a physical presence in those states, and even then you wouldn’t have to worry about cities and counties.
The answer in this case is that 15 years ago somebody should have “explained” to the internet retailers that they were mail order companies and had to follow all the same tax laws as Sears, Finger Hut and AMO. This has been a long time coming.
It would be just on sales made to Texas addresses....
In Irving (DFW), talk of one in the Houston area too.
If they owe it and don’t pay it then that makes them conservative? Demanding what they owe be paid is liberal?
You have things a bit mixed up there feller.
Or is it just jealousy rearing it’s ugly head?
Never heard of one. But this is about money, honey. And you know how that goes.
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