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Amazon cuts sales tax deals with states, not feds
Politico ^ | 5/1/12 10:58 PM EDT | By MICHELLE QUINN

Posted on 05/02/2012 7:48:49 PM PDT by DeaconBenjamin

Amazon may have just upended Congress — to the chagrin of those pushing for a federal online sales tax bill.

The online retail company last week inked deals with Texas and Nevada to begin collecting sales taxes on purchases. The company has brokered seven such agreements in recent months while bills to standardize collection of Internet sales taxes nationwide are mired in politics on Capitol Hill.

That puts lobbyists and others who have been fighting for a federal bill in a quandary: If the biggest states begin to see sales tax revenue from Amazon’s collections, is it still worth the money and effort to get a federal bill passed?

Proponents of a federal solution are looking realistically at the congressional calendar and see few windows to advance an online sales tax bill or to attach it to a broader legislative package.

In the meantime, Amazon has negotiated with states as it says advances in technology can help with sales tax collection, but the company still supports measures for a national online sales tax bill. “The debate has progressed, and it has matured, as has the legislation,” said Scott Stanzel, a spokesman for Amazon.

But taxing Internet sales hasn’t proved popular with members of Congress, particularly in an election year.

So Amazon has applied its own calculus to cutting deals with states, observers say. It has looked at its own plans for growth and the need to have distribution centers in many states to continue that trajectory. It also has to look at the growth of potential tax liability and legal costs.

“I think they are being strategic,” said Betsy Laird, a top lobbyist with the International Council of Shopping Centers. “They have to make accommodations if they are going to be good corporate citizens in those states.”

Whatever Amazon’s motives, its agreements with states to collect sales tax on purchases “really changes the game,” said one Internet company lobbyist. “Whether you need to change the law begins to look like one segment of the retail business putting burdens on another segment.”

On Friday, Amazon announced a deal with Texas to begin collecting sales tax on online purchases as of July 1. Also last week, the retail giant announced a deal with Nevada to begin collecting sales tax in 2014.

As part of deals with South Carolina and Tennessee, Amazon has sent letters to customers with the totals they spent on the site and information on how to pay the tax.


TOPICS: Business/Economy; Government
KEYWORDS: amazon; amazonsalestax; internetsalestax

1 posted on 05/02/2012 7:48:57 PM PDT by DeaconBenjamin
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To: DeaconBenjamin
On Friday, Amazon announced a deal with Texas to begin collecting sales tax on online purchases as of July 1.

Buh Bye Amazon!

2 posted on 05/02/2012 7:56:41 PM PDT by mylife (The Roar Of The Mases Could Be Farts)
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To: mylife

Was looking at some items on Amazon. Need to make a decision before July 1st! Will start looking around for other retail sites now.


3 posted on 05/02/2012 8:05:01 PM PDT by Bubbette
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To: DeaconBenjamin
I'm 30 minutes from a huge collection of stores,every conceivable chain,just over the border in New Hampshire.NO SALES TAX versus 6.25%.I'll take zero,you betcha!
4 posted on 05/02/2012 8:07:03 PM PDT by Gay State Conservative (Unlike Mrs Obama,I've Been Proud Of This Country My *Entire* Life!)
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To: Bubbette

To be fair to Amazon, they do offer free shipping in an effort to offset this stuff.

But UPS, Texas sales tax together? That’s a deal breaker.


5 posted on 05/02/2012 8:10:01 PM PDT by mylife (The Roar Of The Mases Could Be Farts)
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To: DeaconBenjamin

They are going to lose a lot of money.


6 posted on 05/02/2012 8:15:47 PM PDT by Lorianne (fedgov, taxporkmoney)
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To: DeaconBenjamin

I cancelled 5 orders on Amazon tonight. They don’t make it easy to cancel your account. Tomorrow I’ll take care of that.


7 posted on 05/02/2012 8:36:33 PM PDT by x1stcav (There's a bunch of us out here spoiling for a fight.)
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To: DeaconBenjamin

Ohio is still on the honor system, although one of the liberal papers here said Gov Kasich was considering a deal with Amazon.


8 posted on 05/02/2012 8:37:32 PM PDT by OrioleFan (Republicans believe every day is July 4th, Democrats believe every day is April 15th.)
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To: DeaconBenjamin

It always boils down to the bottom line and urgency to acquire. Many will find a better bottom line with no urgency in the equation. Amazon will lose those sales.


9 posted on 05/02/2012 8:41:28 PM PDT by Myrddin
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To: DeaconBenjamin

Who in Texas is responsible for this? Don’t they know we already pay enough taxes?


10 posted on 05/02/2012 9:14:35 PM PDT by Doe Eyes
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To: DeaconBenjamin

I bought all my photographic supplies and equiptment through Amazon. Now, not another penny. I’ll buy locally.


11 posted on 05/02/2012 9:23:35 PM PDT by BigCinBigD
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To: DeaconBenjamin

Walmart is Amazons biggest political foe.


12 posted on 05/02/2012 9:40:43 PM PDT by NoLibZone (I trust Sarah Palin,Dick Cheney, Cain,Perry,Bachman Anyone but Obama,because I trust their judgment.)
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To: mylife

Happy to once in a while time things right. Just bought a couple of big screens from Amazon, no Texas Sale Tax.

Once they are hitting for the 8.25%, they lost a big incentive. Am sure they will stay big in the biz, just not as big. Of course they could cut prices to match Sam’s and Costco with sales tax.


13 posted on 05/02/2012 10:37:51 PM PDT by X-spurt (Its time for ON YOUR FEET or on your knees)
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To: Gay State Conservative

Assuming %.50/mile driving cost and 60 miles round trip, you’ll have to spend about $500 per trip to come out ahead.


14 posted on 05/03/2012 4:47:51 AM PDT by Sherman Logan
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To: DeaconBenjamin

In Tennessee Amazon now sends an E mail indicating that use tax on the sale is due and must be paid directly to the state of Tennessee.

It is uncertain if the notice goes out on all transactions or only those above a certain $ threshold.

The law has been in effect for decades and businesses are subject to periodic purchase audit to determine compliance with the use tax law.


15 posted on 05/03/2012 4:57:53 AM PDT by bert ((K.E. N.P. N.C. +12 ..... Present failure and impending death yield irrational action))
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To: Sherman Logan
Assuming %.50/mile driving cost and 60 miles round trip, you’ll have to spend about $500 per trip to come out ahead.

I have relatives who live a few miles from that mall so I combine shopping trips with visits.I certainly don't buy *everything* up there,mostly expensive stuff like TV's,PC's etc.I've increased the amount of money I spend there since Coupe Deval (Massachusetts Governor and *very* close pal of Osama Obama) raised the sales tax by about 40% a couple of years ago.

16 posted on 05/03/2012 6:02:08 AM PDT by Gay State Conservative (Unlike Mrs Obama,I've Been Proud Of This Country My *Entire* Life!)
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To: Gay State Conservative

I’m sure you already figured this out.

My point was that a lot of people think they save money driving to avoid paying sales tax when they really don’t.

I have a coworker who drives 50 miles round-trip to cross the state line and save a few cents on gas price. No way he breaks even, but he isn’t interested in hearing the numbers.


17 posted on 05/03/2012 6:11:33 AM PDT by Sherman Logan
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To: Lorianne
They are going to lose a lot of money.

Not likely. People aren't shopping there because there's no sales tax. They shop there because the prices are lower than bricks and mortar stores, it is convenient to shop (never closes, and I can buy whatever I want from my iPad sitting on my couch), and if you're a Prime member, everything comes with two day shipping.

Viola! New lawnmower, delivered right to my door in two days--for free--and I never have to leave the house. I don't have to drive to the mall, I don't have to worry about whether the box will fit in my car, I don't have to worry about getting my kids together. And Amazon does all that for less than the price of what I can buy it for at Lowes.

Sales tax? Pfft. Who cares?

18 posted on 05/03/2012 6:12:50 AM PDT by Publius Valerius
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To: Bubbette
Was looking at some items on Amazon. Need to make a decision before July 1st! Will start looking around for other retail sites now.

It will take a couple of years, but this will be painful to Amazon, as smaller, specialized outfits start to pop up that don't have multiple-state bricks and mortar locations.

19 posted on 05/03/2012 6:53:17 AM PDT by Pearls Before Swine
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To: Publius Valerius

I agree about the convenience, but it remains to be seen whether people will PAY for that convenience. Amazon is not always the lowest price. If you will pay for the convenience, and many will, they may do fine. But many people also look at price and in high sales tax areas that could make or break a sale.


20 posted on 05/03/2012 7:30:05 AM PDT by Lorianne (fedgov, taxporkmoney)
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