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Every Day's a Tax Holiday At Amazon

samzenpus posted more than 3 years ago | from the one-cick-loophole dept.

The Almighty Buck 377

theodp writes "With Black Friday here, Slate's Farhad Manjoo reminds readers of how Amazon.com undersells Best Buy, the Apple store, and almost everybody else. Read his lips: no sales taxes. Unless you live in KS, KY, NY, ND, or WA, you'll pay no sales tax on many purchases from Amazon, giving Amazon a huge — and largely hidden — price advantage over most other national retailers. Amazon CEO Jeff Bezos is certainly no fan of taxes — he explored founding Amazon on an Indian reservation, and recently ponied up $100,000 to defeat a proposed WA state income tax, a good investment for someone who's cashed in close to $800,000,000 in Amazon stock this year alone. So, is Amazon's tax-free status unfair? Of course it is, says Manjoo. Amazon has physical operations in 17 states in which the company and its employees enjoy the fruits of local taxes — police and fire protection, roads, hospitals, and other infrastructure that make its operations possible. Yet Amazon skirts tax collection in most of these places through clever legal tricks."

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377 comments

GODDAMN SLASHDOT !! FIX THIS SHIT !! (-1, Offtopic)

Anonymous Coward | more than 3 years ago | (#34349324)

If it ain't broke don't fix it but this shit is broke real bad !!

indirect taxes are important (3, Insightful)

wakim1618 (579135) | more than 3 years ago | (#34349348)

Each state in which Amazon is located also benefits from the jobs, both direct (employed by Amazon) and indirect (e.g. transport services and power generation) which Amazon pays for. These workers in turn pay income taxes and sales taxes (when they purchase goods and services) which pay for the roads and infrastructure. Corporate and sales taxes directly paid by the company are usually not the primary means by which a company contributes to a government's tax revenues. It may well be argued that if Amazon is expected to contribute towards its consumption of infrastructure, then it should be some of its taxes back in many states.

Re:indirect taxes are important (5, Insightful)

Dionysus (12737) | more than 3 years ago | (#34349368)

don't all those companies that Amazon competes against elso provides jobs to workers who "in turn pay income taxes and sales taxes (when they purchase goods and services) which pay for the roads and infrastructure"?

Re:indirect taxes are important (2, Insightful)

samriel (1456543) | more than 3 years ago | (#34349712)

So the rest of those companies go out of business, and their employees have to work at Amazon. You get less choice when you buy stuff online, so Amazon gets more money, so it can destroy other businesses, and hire more employees...

Isn't the free market great?
</sarcasm>

Re:indirect taxes are important (0, Offtopic)

Jay Tarbox (48535) | more than 3 years ago | (#34349788)

"You get less choice when you buy stuff online" Whaaaaat?

Re:indirect taxes are important (1, Informative)

Anonymous Coward | more than 3 years ago | (#34349842)

"You get less choice when you buy stuff online" Whaaaaat?

Read the previous sentence. "So the rest of those companies go out of business..."

Re:indirect taxes are important (3, Informative)

anguirus.x (1463871) | more than 3 years ago | (#34349584)

These workers in turn pay income taxes and sales taxes (when they purchase goods and services) which pay for the roads and infrastructure.

Well, if they buy stuff from Amazon they don't pay sales taxes, which is exactly the point, son.

Re:indirect taxes are important (1)

mrsquid0 (1335303) | more than 3 years ago | (#34349644)

You seem to be saying that a business's employees and customers should be paying for the government services that the businesses use.

Re:indirect taxes are important (1)

j0nb0y (107699) | more than 3 years ago | (#34349812)

You seem to be saying that employees and customers don't *already* pay for government services that businesses use.

Re:indirect taxes are important (1)

mrsquid0 (1335303) | more than 3 years ago | (#34349832)

Well, your taxes are already paying for the government services that I use, so why do I need to pay any taxes when you are already paying them for me? I would be very happy if j0nb0y paid my share of the taxes on the various services that I use.

Taxation without representation (4, Insightful)

Rockoon (1252108) | more than 3 years ago | (#34349902)

I can't believe that nobody has mentioned this yet.

The issue at hand is taxation without representation. If California was to collect sales taxes from a retailer in Connecticut who sells remotely to Californians, then neither that retailer nor its employees would not have representation with regards to those tax laws.

The slippery slope is that California could effectively create predatory taxation on out-of-state businesses without those out-of-state businesses having any representation.

employees ? c'mon ... (1)

Tensor (102132) | more than 3 years ago | (#34349354)

The employees enjoy the fruits of local taxes because they pay their taxes and pay sales tax on all things bought locally. The ones who are not paying are the citizens of those 17 states that buy @amazon, not its employees.

Re:employees ? c'mon ... (1)

anguirus.x (1463871) | more than 3 years ago | (#34349594)

So you believe the onus for tax collection should lie on the buyer and not the seller then?

Re:employees ? c'mon ... (1)

Entrope (68843) | more than 3 years ago | (#34349678)

I can't speak for every state, but here in Virginia, there is a line on our annual income tax forms for things bought out-of-state with no sales tax paid -- with a longer form [virginia.gov] that applies to anyone who buys things from sales-tax-free online retailers. It is called "use tax", and it is meant to make sure that Virginia gets its bit of the pie even in these cases.

This is one of the things that bugs me when people complain that companies like Amazon don't charge sales tax -- states can address the issue, and some (maybe most or all?) states have done that, but scofflaws don't bother paying. To compound the hypocrisy, a lot of the same people who don't pay use tax, or who assume others don't, go on to complain about how tax rates need to be higher because some people aren't paying their fair share.

Relevance (3, Informative)

fyngyrz (762201) | more than 3 years ago | (#34349614)

There are no sales taxes in my state. Trying to argue that Amazon is "ripping off" anyone seems like the wrong argument. On the other hand, states with sales taxes... now there one could make a good argument for ripping people off. Especially considering how far out of constitutional compliance most states are (just following the feds, I know.) As for roads, isn't that typically part of fuel taxes, a use tax, more or less?

Re:Relevance (1)

tsm_sf (545316) | more than 3 years ago | (#34349674)

But isn't a use tax basically the same as a VAT, which I have been recently told that I should hate by the glowing teevee box?

I'm starting to feel like ALL taxes are Socialism(tm) and that I should wall myself off in my compound, but nobody's told me to do that yet.

Corporations paying taxes? How quaint! (1, Funny)

Anonymous Coward | more than 3 years ago | (#34349358)

Taxes are only intended for the lower/middle classes and small/medium businesses. Where would we end up if rich individuals and big corporations would pay taxes? Hah, that idea is preposterous!

Amazon is just being a good citizen and serves as a shining example for others!

Go after those who purchase from Amazon instead (4, Insightful)

garcia (6573) | more than 3 years ago | (#34349370)

From the article:

Technically, then, if I buy a $1,000 laptop from Amazon, I'm supposed to pay a $90 use tax when I file my taxes to my home state of California at the end of the year. I've never done this, and I bet you haven't either--almost nobody does, because states have no good way to enforce use tax collection.

Then stop whining about the lack of sales taxes. The taxes should be borne by the customer of Amazon, not Amazon (at least in the states in which it does not have a physical presence and no, affiliates are not physical presence no matter how bad the states want it to be). The government knows better than to enforce those taxes upon the citizenry as it only causes a minor inconvenience on a single online retailer, 300 million people are likely to be a lot more upset.

Re:Go after those who purchase from Amazon instead (1, Interesting)

BitZtream (692029) | more than 3 years ago | (#34349500)

Or, Amazon can pay sales takes. It has the ability to do so. This is just another example of a massive corp walking on everyone.

I personally don't give a shit what state Amazon is in, if they want to sell everywhere, they can act like it and pay taxes.

Of course, no one intelligent buys from Amazon anymore ... mostly because it would appear that they don't sell shit, their affiliates do. Amazon has basically become a middle man squeezing every drop out of everyone. There business is unstainable long term. Well, thats not entirely true, there will be a continuous stream of idiots to continue to buy from them, but I suspect that is a much smaller number than they currently enjoy.

Re:Go after those who purchase from Amazon instead (1, Interesting)

Anonymous Coward | more than 3 years ago | (#34349530)

I find amazon very convenient.
Also : amazon has no duty to states that it's customers happen to live in.
Pay your own damn taxes, don't expect others to do it for you.

Re:Go after those who purchase from Amazon instead (1)

cynyr (703126) | more than 3 years ago | (#34349572)

Or, Amazon can pay sales takes. It has the ability to do so. This is just another example of a massive corp walking on everyone.

Hmm i thought most state tax codes required you to report that you bought items without sales tax, and pay the sales tax on those items? not that anyone does that, but hey it's not amazon breaking the law there.

No, they sell where they have data centers, the purchasers telecommute there, and then if they are required by state laws pay taxes on their purchase.

I agree about the state of amazon though, but the above applies to newegg, tiger direct, itunes, hulu plus, etc.

Re:Go after those who purchase from Amazon instead (0)

Anonymous Coward | more than 3 years ago | (#34349924)

State tax codes try to require that. That doesn't make the codes legal, or complying with them smart.

Re:Go after those who purchase from Amazon instead (1, Informative)

Entrope (68843) | more than 3 years ago | (#34349744)

Amazon could collect (and pay) sales tax from consumers everywhere, but localities make it a real pain to figure out sales tax, so Amazon would inevitably get it wrong.

For example, food items are often exempt from sales tax, but the definition of exempt food items varies from place to place. Another case: Some counties, towns, and even smaller areas have additional sales taxes that go to the local government instead of the state government. Where I live, there is often a "sales tax holiday" for back-to-school supplies, but the criteria and timing for that are hard to figure out (if you buy something online that happens to be back-ordered, does the order date, the ship date, or the delivery date qualify the purchase for the sales tax holiday?).

I expect that if I worked in retail operations or any other kind of sales, I would be able to cite more examples, but those are the kind of things that complicate taxes. If all these places had a central database that retailers could query, that would (probably) make it practical to charge the right sales tax -- but they do not, and most local governments don't provide any kind of structured database with that data.

enforcement (0)

Anonymous Coward | more than 3 years ago | (#34349524)

The taxes should be borne by the customer of Amazon, ....

And the states enforce that by....monitoring everyone's purchases online? Auditing everyone's credit card accounts to see how much they spent online an then fining them for every tax on purchases not paid.

Re:Go after those who purchase from Amazon instead (0, Offtopic)

PrimeNumber (136578) | more than 3 years ago | (#34349838)

The government knows better than to enforce those taxes upon the citizenry as it only causes a minor inconvenience on a single online retailer, 300 million people are likely to be a lot more upset

I would agree with you in principle and wish you were correct, but look at the huge number of people that have no self respect and willingly let the government molest & sexually abuse them (and their children) flying home this thanksgiving holiday.
 
The government knows people will roll over for anything now.

Shipping Costs, Etc. (4, Insightful)

resistant (221968) | more than 3 years ago | (#34349386)

I've always wondered why when irate brick and mortar retailers yell about an "unfair advantage" with no sales tax, they invariably fail to mention shipping costs, which don't exist for direct in-person brick and mortar store purchases. Admittedly, Amazon (for example) these days has free shipping for many orders of $25.00 or over, and intense competition over the past few years has put great pressure on all on-line retailers to not play games with charging excessive shipping fees to pad their profits, which used to be a huge problem.

Frankly, I gloat over not having to pay sales taxes (when possible). That's the free market. Amazon certainly has no moral obligation to levy sales taxes if there's no direct legal obligation to do it. It's up to the individual states to decide how badly they want to drive out business or attract it with varying tax treatment.

Re:Shipping Costs, Etc. (2, Insightful)

Tensor (102132) | more than 3 years ago | (#34349442)

So do you believe that merchandise magically appears at a brick&mortar shop ?

Re:Shipping Costs, Etc. (3, Insightful)

arkane1234 (457605) | more than 3 years ago | (#34349460)

it's more of of a situation of the shipping price being added on previous to purchase at brick & mortar, versus like sales tax after purchase.

Re:Shipping Costs, Etc. (3, Insightful)

Anonymous Coward | more than 3 years ago | (#34349892)

So do you believe that merchandise magically appears at a brick&mortar shop ?

just as magically as it appears at Amazons warehouses.

Re:Shipping Costs, Etc. (4, Interesting)

thijsh (910751) | more than 3 years ago | (#34349466)

The shipping cost are negligible compared to the rent of a store on a prime location. This has given online retailers an advantage from the first day an online store opened it's doors, so to speak... This saves them so much cost compared to the brick and mortar retailers that they can sell products for a lower price and deliver it to you in one day for free and still make more money than retailers do. The advantage is and has always been with the online retailers and the only way brick and mortar stores can compete is with service, and playing on peoples feelings because most people still prefer to be able to talk to someone in person, ask questions and feel the product they are buying (and are willing to pay a little extra for that). Both on- and offline stores have advantages, nothing special about that.

The sales tax is a whole different matter, it does create an unfair advantage because Amazon just shifts responsibility for the tax to the end customer. It has to be payed anyway they just don't because, supposedly, it's a hassle to figure out to who... It's tax-evasion and the larger the company the more accepted it is... It has come to the point that the largest companies with the greatest income pay the least amount of tax (percentage that is), that is the underlying unfair advantage that will eventually result in monopolies.

Smaller companies pay more tax => Unfair advantage for the big companies => Monopolies in the long run => The bill for the customer (whether in money, service or quality)...

Re:Shipping Costs, Etc. (0)

Anonymous Coward | more than 3 years ago | (#34349534)

Tax avoidance /= tax evasion.

One is legal, the other isnt. And, as usual, the "moral" line between is blurry.

Re:Shipping Costs, Etc. (1)

chrb (1083577) | more than 3 years ago | (#34349548)

The shipping cost are negligible compared to the rent of a store on a prime location. This has given online retailers an advantage from the first day an online store opened it's doors, so to speak...

That is true, however, that is not the main point of this article. The author of the article is comparing the cost of an identical purchase via online sites - apple.com versus bestbuy.com versus amazon.com versus walmart.com. Even if Apple and Best Buy and Walmart etc. have physical stores at prime locations, their online operations should be more cost efficient, since they can ship direct from huge out-of-town warehouses instead of having to pay for prime location rent in the middle of a city. This should, in turn, lead to them having cheaper online prices when compared to the in-store price. Of course, not all companies do that, as for PR reasons they don't want to be seen to be providing cheaper prices to web users. But for companies that do have an online/offline price differential, then his comparison of the online price as an indicator of cost efficiency is reasonably valid.

Re:Shipping Costs, Etc. (5, Insightful)

Belial6 (794905) | more than 3 years ago | (#34349848)

Honestly, the whole practice of even calling it "online" sales is a misnomer that confuses the argument. "Online" sales have existed long before "Online" existed. "Online" sales ARE mail-order sales. Arguing about Amazon mail-order is no different then arguing about people buying mail-order in 1900. Just as with everything else, "On a computer" does not make mail-order some completely new thing that is somehow magically different from what has been going on for the last 100 years.

Re:Shipping Costs, Etc. (3, Insightful)

Jenming (37265) | more than 3 years ago | (#34349502)

Not collecting sales tax to make up for shipping costs amounts to a government subsidy on shipping. Maybe thats a good idea, but its not the free market at work.

Re:Shipping Costs, Etc. (1)

Dunbal (464142) | more than 3 years ago | (#34349514)

they invariably fail to mention shipping costs, which don't exist for direct in-person brick and mortar store purchases.

      While you're right, you neglect to mention the (hidden) cost to a customer of driving to a store and back - there's gas, oil, wear and tear on the car, etc. Then there's the time factor. Usually walking back and forth across a parking lot and store and hunting down the thing you want to buy takes a lot longer than a couple mouse clicks. All of that has a cost - you could be doing something else with your time, after all.

So while it may not amount to $20 worth of shipping, the brick and mortar store is not entirely devoid of "additional costs" either. You'd have to subtract those from the shipping costs to get the "real" price difference.

Re:Shipping Costs, Etc. (1)

iritant (156271) | more than 3 years ago | (#34349536)

Of course shipping costs exist for brick and mortar purchases. It's just that they are borne by the brick and mortar store. By the way, depending on where you live, you may be violating state law by not paying the sales tax in your state when Amazon doesn't pay it for you.

Re:Shipping Costs, Etc. (1)

gutnor (872759) | more than 3 years ago | (#34349664)

They save on shipping cost, but need to pay for staffed physical shops in various expensive place (downtown, expensive mall, ...) . On the other hand they have a physical window, while the amazon has not. That's competition, their idea against the other idea.

Taxes on the other hand is State vs State competition and not in their control. Now with internet, mail-order companies have turn into serious competitor, so that becomes more and more problematic to their business model and they complain more loudly.

It is indeed free market at its best. However, yes Amazon has a moral obligation but they cannot let moral interfere with their bottom line. Because showing moral in this case, that would be illegal for a publicly traded company. Moral obligation is discutable BUT assuming that we live in society that helps the weak at home and abroad instead of letting natural selection do its job, we may assume that a big proud american company would want to compete on merit rather than cheating with fiscal shenanigan and lobbying - especially within the US.

Re:Shipping Costs, Etc. (2, Informative)

TapeCutter (624760) | more than 3 years ago | (#34349806)

"Amazon certainly has no moral obligation to levy sales taxes if there's no direct legal obligation to do it"

Yep, that's it in a nutshell. It reminds me of a wealthy bussinessman here in Oz called Kerry Packer who was dragged in front of a senate inquiry into media ownership laws. Check out his response to one of the seantors starting from about 7:25 in this video [youtube.com] .

Re:Shipping Costs, Etc. (1)

Duradin (1261418) | more than 3 years ago | (#34349958)

Brick and mortar stores have the advantage of instantly fulfilling the customer's order.

I pay Amazon extra to have basic shipping be upgraded to 2 day with a fee per item if I want it in 1 day. There's no option for instant. If I need something now a brick and mortar store gets my business.

Now living in the middle of nowhere with the closest shopping area doing everything they can to not carry anything means I order online for just about everything nonperishable. Even if I did want to shop locally I'd have to go to another county or state to find it.

Farhad Manjoo? (-1, Troll)

Anonymous Coward | more than 3 years ago | (#34349392)

I'm sorry but I can't take anything seriously coming from someone named Farhad Manjoo.

BTW, taxes suck and they're going to get worse. FTG.

BS (0)

greap (1925302) | more than 3 years ago | (#34349398)

"Of course it is, says Manjoo. Amazon has physical operations in 17 states in which the company and its employees enjoy the fruits of local taxes — police and fire protection, roads, hospitals, and other infrastructure that make its operations possible. Yet Amazon skirts tax collection in most of these places through clever legal tricks." You mean the services that are supposed to be funded by income & property taxes? Perhaps if the states dealt with their own fiscal issues (you know unfirable state employees who get paid significantly more than private sector equivalents, retire early and have vast pensions) they wouldn’t need to go around constantly whining about Amazon exploiting their own tax codes.

Re:BS (0)

Anonymous Coward | more than 3 years ago | (#34349456)

you know unfirable state employees who get paid significantly more than private sector equivalents, retire early and have vast pensions

I do not live in the United States, but I do live in a so called 'socialist' country. Still, I find it hard to believe that the government has these kinds of employee issues. Sure, some may be overpaid and government unions can be greedy, but you're trying to make it sound much worse than it is.

Re:BS (1)

Entrope (68843) | more than 3 years ago | (#34349770)

Believe it. Ignoring the job security of government jobs (at least here in the US), someone doing a particular job as a government employee gets on average a significantly higher total compensation than someone doing the same job in the private sector. Sometimes the government base salary is higher even before you add in the better benefits that greap listed.

Re:BS (0)

Anonymous Coward | more than 3 years ago | (#34349954)

Numbers, please. I've seen this argument a lot but never any numbers to back it up (for comparable positions). From personal experience -- I've worked in the public and private sectors (systems engineer). My base salary was 30% higher in a private position and that was before annual and retention bonuses. Retirement and other benefits were about the same.

Re:BS (2, Insightful)

antifoidulus (807088) | more than 3 years ago | (#34349538)

u know unfirable state employees who get paid significantly more than private sector equivalents, retire early and have vast pensions

Conservatives love to tout this fact, but if you actually look at the reasoning behind it, it isn't that government employees are getting paid a lot more than they used to, it's that private sector wages have been slashed mercilessly in the past 30 or so years to the point that even though government employees don't make that much more, adjusted for inflation, the ratio between private to public sector salaries has fallen significantly.

Re:BS (0, Flamebait)

Entrope (68843) | more than 3 years ago | (#34349800)

Typical liberal response. Government employees make more than private sector employees, but it's because of EVUL CORPORATIONS. The solution isn't for government to also tighten its belt and become more efficient -- the solution is to return everybody to standards of living circa 1970! (I adjusted your "past 30 years or so" to 40 years because of the serious inflation in the 1970s, and you cited inflation as a factor in the wage imbalance.)

Re:BS (0)

antifoidulus (807088) | more than 3 years ago | (#34349822)

Wow, statistics fail! You do realize that government employees are not in fact representative of the general population right? That they are more likely to hire college graduates etc. Also the numbers in question are not mean incomes but median incomes. If the federal government were to follow the trend in corporate pay the president and senate would be earning $100 million a year and doing absolutely nothing useful(ok, they got the later half right).

But that would actually require some thought, something that conservatives have shown they are quite incapable of over and over again(Social medicine is evil! Ignore the fact that the rest of the world pays a lot less money for a lot better healthcare, it's evil! Don't think, just say evil!) Yeah, let me know when you actually have graduated high school, then we can have a grown up talk.

So let me get this straight... (1)

haystor (102186) | more than 3 years ago | (#34349402)

Amazon is playing by the rules?

I love the "employees benefit from local..." like no taxes are paid locally. Property tax, income taxes, etc...

Even when Amazon is a few bucks higher (0)

sandytaru (1158959) | more than 3 years ago | (#34349412)

compared to local stores on Black Friday, it might be worth it to pay the additional dollars for the right to sleep in. As my husband is doing after he snagged my Christmas present, a 2TB external drive, for $16 higher than the local price after shipping, not counting taxes, gas, and the immeasurable value of 6 extra hours of sleep.

Technically true, does it explain pricing? (5, Insightful)

ukyoCE (106879) | more than 3 years ago | (#34349416)

Neither Best Buy nor Amazon include sales tax in their advertised prices. Yet Amazon's (and Neweggs, and etc.) prices are typically discounted 20% or more compared to the brick and mortar stores. Even after accounting for shipping. I don't think lack of sales tax is why people pick Amazon and Newegg.

Re:Technically true, does it explain pricing? (1)

Jason Levine (196982) | more than 3 years ago | (#34349582)

I think increased competition is the reason for those lower prices. Let's say you're in the market to buy a computer. There are maybe a handful of stores in your local area that you could go to to buy one. Those stores will have different manufacturers and models and price comparisons will be tricky (involving a lot of driving back and forth). Now, let's look at the online world. I can load up Amazon.com, NewEgg.com and a dozen other online shops in one browser window. I can look through the selection, narrow my search and compare prices between online shops from the comfort of my home (or work or wherever I happen to be). So while a brick and morter company might have to compete with a small number of shops with little price comparison opportunities, an online shop has a huge amount of competition and a lot of price comparison opportunities. If they don't have low prices, people will flock to other online ships and they'll soon find themselves out of business. (Yes, this even applies to a giant like Amazon.com. If they radically increased their prices, people would slowly flee from them to other shops.)

Re:Technically true, does it explain pricing? (1)

Phoobarnvaz (1030274) | more than 3 years ago | (#34349592)

Neither Best Buy nor Amazon include sales tax in their advertised prices. Yet Amazon's (and Neweggs, and etc.) prices are typically discounted 20% or more compared to the brick and mortar stores. Even after accounting for shipping. I don't think lack of sales tax is why people pick Amazon and Newegg.

For the big ticket items...you better believe it is the reason. Used to live in Arizona where the sales tax was almost 9%...with the legislature doing everything they could do to keep it rising to 10% or better. Don't feel sorry for any brick/mortar business who says they can't compete. They refuse to do so...because in many small towns they can't AND the owners love their big homes/expensive cars.

In the town where I used to live in Arizona...no place (including the only big box store from Arkansas in this town for too many years) would carry many of the big ticket items you wanted without driving the 100+ miles to Las Vegas or Phoenix. If you wanted to drive this trip...you still had gas/time to spend.

Finding the item locally (if you could) ...you would pay usually over 40-50% of what I could get it for online. That was after it was ordered from NewEgg or Amazon by the business with their 40-50% markup.

Blame the thief. (1, Insightful)

Anonymous Coward | more than 3 years ago | (#34349420)

Blame the thief who steals from you, don't blame your friend because he was smart enough to hide his wallet in his sock.

Re:Blame the thief. (1)

arkane1234 (457605) | more than 3 years ago | (#34349470)

I hate to say this, but the only funding any govt organization gets is from the taxpayer.

Re:Blame the thief. (1)

Dunbal (464142) | more than 3 years ago | (#34349598)

I hate to say this, but the only funding any govt organization gets is from the taxpayer.

      Well perhaps if they didn't burn through cash so quickly, they wouldn't be so desperate for funding.

Re:Blame the thief, government! (1)

linuxiac (1831824) | more than 3 years ago | (#34349946)

You have NOT read the U.S. Constitution, Article 1, Section 8! "The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States; To borrow money on the credit of the United States;" States may also be creative in imposing on the citizens to provide support. But, all have a duty to govern wisely, spend with thrift! We all have the power to purchase across state lines, where States may NOT interfere, such as in interstate commerce!

New Hampshire (0)

Anonymous Coward | more than 3 years ago | (#34349434)

I live in NH and don't pay sales tax on Amazon.com orders. In fact, I don't pay sales tax on ANYTHING.

101 Reasons to Move to NH [freestateproject.org]

Re:New Hampshire (1)

icebraining (1313345) | more than 3 years ago | (#34349722)

There are multiples states with less spending per capita than NH. Not having a sales tax only means you're paying through other taxes.

Re:New Hampshire (0)

Anonymous Coward | more than 3 years ago | (#34349772)

There are lots of ways to look at the numbers, but the bottom line is that having no sales tax and no state income tax works out pretty well for most people. NH also happens to have the highest income per capita in the country...

Re:New Hampshire (0)

Anonymous Coward | more than 3 years ago | (#34349852)

Which states would those be?

http://money.cnn.com/pf/features/lists/taxesbystate2005/

Alaska doesn't count... due to oil royalties they literally pay you to live there

There is always (4, Interesting)

kilodelta (843627) | more than 3 years ago | (#34349440)

The little fact that the power to tax interstate commerce is the exclusive domain of the FEDERAL government. Not the states. That's why Amazon can skirt most state use tax laws.

I live in a state that requires me to report anything I bought outside the state or online via a USE tax. I'm waiting for someone to buy something but never use it and let the state prosecute. them. I bet that stupid voluntary use tax would be dropped post haste.

Re:There is always (1, Insightful)

JasterBobaMereel (1102861) | more than 3 years ago | (#34349518)

This is not a problem caused by Amazon .. it's a problem with the outdated tax laws in the US

If you buy a song from iTunes do you pay sales tax or use tax on it ? It has not physically moved, it was purchased from a website, hosted in one place, downloaded from a website hosted elsewhere, bought from a company with presence in various states and who has headquarters in another, who do you owe tax to ? ..or perhaps you could wake up to the fact that you are one country and have uniform tax laws ...?

Re:There is always (1)

Belial6 (794905) | more than 3 years ago | (#34349874)

What do you mean outdated? Mail-order is easily over a hundred years old. We were not up in arms when people didn't pay sales tax on the car they bought from Sears via mail order a hundred years ago. How is it any different now with a product from Amazon?

Re:There is always (0)

Anonymous Coward | more than 3 years ago | (#34349798)

The author also failed to mention Colorado, which also demands taxes from Amazon purchases. Amazon sends the state information on everyone who has purchased from them during the year.

I guess they figure "if we tax you, you'll decide to buy local, instead". Nope. I'll continue to buy online, just out of spite. How do they think the things I order get here? A magical fairy? Just because I may not pay taxes on items I purchase from a company that doesn't even exist in the same state doesn't mean that they're not getting paid taxes for the actual in-state activities themselves. For example, UPS/FEDEX obviously pay taxes and they certainly pay taxes via the gas and other fees. So none of this bullshit "well when you buy a package, it has to go on public roads durr durr durr".

It's sickening how eager people are not to say "we're taxed to much", but rather say "we're taxed, so THEY should be too! boo hoo hoo hoo!"

Re:There is always (0)

Anonymous Coward | more than 3 years ago | (#34349864)

In addition to your point, companies only collect taxes, they do not pay and cannot pay taxes. Any tax monies from a company come directly from their customers; higher prices, employees; lower wages, or share holders; lower returns, not from the company itself. The whole debate over companies paying taxes is just a way to obfuscate from the public what their real tax bill is.

Er, doesn't Amazon... (0)

Anonymous Coward | more than 3 years ago | (#34349454)

Doesn't Amazon pay company taxes? Property taxes? I think this is a bit of a beat-up, no?

Use Tax (1)

JimWise (1804930) | more than 3 years ago | (#34349478)

Some states, such as Ohio, have a "Use Tax" which is up to the consumer to register and pay on their own. If I purchase on-line, over the phone, or even drive elsewhere to purchase goods that are tax free where/when/how bought but are taxable in Ohio and I use them in Ohio, by law I am required to fill out a Use Tax form. The Use Tax entry is now conveniently included on the standard Ohio State Tax forms vs having to be tracked down separately as it was years ago, and is calculated as the standard Ohio + County tax. This was done back in the catalog mail-order days to level the playing field. Most states with Use Taxes are pretty lax on making a big deal about it, but it is there, it is the law, and it has been enforced.

Re:Use Tax (1)

JimWise (1804930) | more than 3 years ago | (#34349516)

Oops, too much lack of sleep this week. Forgot the link for Use Tax [wikipedia.org] .

Some states, such as Ohio, have a "Use Tax" which is up to the consumer to register and pay on their own. If I purchase on-line, over the phone, or even drive elsewhere to purchase goods that are tax free where/when/how bought but are taxable in Ohio and I use them in Ohio, by law I am required to fill out a Use Tax form. The Use Tax entry is now conveniently included on the standard Ohio State Tax forms vs having to be tracked down separately as it was years ago, and is calculated as the standard Ohio + County tax. This was done back in the catalog mail-order days to level the playing field. Most states with Use Taxes are pretty lax on making a big deal about it, but it is there, it is the law, and it has been enforced.

Bait and switch (4, Insightful)

Dunbal (464142) | more than 3 years ago | (#34349484)

in which the company and its employees enjoy the fruits of local taxes — police and fire protection, roads, hospitals, and other infrastructure that make its operations possible.

And I am sure that those employees pay their federal, state and municipal taxes, as well as sales taxes on just about everything they buy... I'm sorry what was your point again?

Ahh yes, the shameless grabbing of money by idiotic governments so addicted to spending that even the bonds they issue are worth little more than junk. Shame on you. Instead of reaching your hands out for more money like spoiled children, how about making real efforts to cut spending.

There's a law of nature - the more you try to tax, the less money you actually get. People and companies eventually move - out of state, or out of country. It's a simple decision - if the cost of moving is less than the cost of taxes, we move. Careful when you raise the cost of doing business. All the rules, regulations, by laws, and other problems associated with employing people in the US is what is driving business offshore (where things are SIMPLER) to begin with. I really don't see what exactly is anchoring a global company like Amazon specifically to the US. A plunging US dollar may be "good for exports", but it means that the line in the income statement that says "Income from the USA" is actually worth less and less every year.

Re:Bait and switch (0)

Anonymous Coward | more than 3 years ago | (#34349690)

as well as sales taxes on just about everything they buy

...unless they buy from Amazon, of course....

Re:Bait and switch (1)

Dunbal (464142) | more than 3 years ago | (#34349732)

I live outside the US and have to pay pretty much 50% customs duty on everything I buy, including from Amazon. So I really don't see what the point is arguing about 6% or so.

So you like slavery because it's efficient? (1)

sethstorm (512897) | more than 3 years ago | (#34349824)

That simplicity you speak of is because they allow slavery to a business. Who cares if the people die, we've got money to make!

If they can't get their products in, it won't matter. Customs can always reject them and anyone who tries to pass them off as something else.

Never mind that the US has quite a fine military and a very good intelligence department. There's nowhere to run or hide anymore, should you be a large enough thorn in their side. And plenty of citizens will thank them for doing their job against you.

Perhaps they avoid tax in the USA... (4, Insightful)

Lincolnshire Poacher (1205798) | more than 3 years ago | (#34349506)

> So, is Amazon's tax-free status unfair?

Amazon.com Inc may have "tax-free status"...

Amazon.co.uk Ltd, Amazon.de GmBH and Amazon EU Sarl most assuredly do not, yet we Old Europeans still shop there.

It's about the long-tail of products in the range, not prices. A lot of the items in the Amazon catalogue aren't even available through high-street shops, so what difference would a few dollars more make?

Re:Perhaps they avoid tax in the USA... (1)

Phoobarnvaz (1030274) | more than 3 years ago | (#34349764)

> So, is Amazon's tax-free status unfair?

Amazon.com Inc may have "tax-free status"...

Amazon.co.uk Ltd, Amazon.de GmBH and Amazon EU Sarl most assuredly do not, yet we Old Europeans still shop there.

It's about the long-tail of products in the range, not prices. A lot of the items in the Amazon catalogue aren't even available through high-street shops, so what difference would a few dollars more make?

In many rural places (most of the land mass of the US)...the catalog...now online has been the only way for many people to get items they need/want. Just because Congress refused to enact tax laws...doesn't mean much of the population of the US needs to pay higher prices because some chain store believes they need to level the playing field.

You want to do this...learn customer service and don't treat me like an annoyance while I'm in your store. Online...I don't have to look for a salesperson. I can read what experience others have had with the product. Online...I'm not having to wait in long lines at a cash register while you're standing around/talking/laughing about whatever stupid thing you saw or did. This is why you have people leave their items on the belt or in their cart and either order what they are looking for online or goto another store.

taxes are always invisible anyway (1)

arkane1234 (457605) | more than 3 years ago | (#34349526)

I just don't see how taxes can even be in play in this, since (at least in the USA) taxes are added after you've chosen to purchase the item. It's invisible during the shopping aspect, so it's not a direct factor.
I'm sure it's a peripheral factor, but it's not one of those "but.. but... but Best Buy's price is 8.5% higher than Amazon!" because of an 8.5% sales tax...
This arguments about like one state complaining the state just (north|south|east|west) of them having lower/no sales tax and being unfair.
ALMOST like a fat girl complaining that too many girls are "skinny", as well.

Re:taxes are always invisible anyway (1)

pyite (140350) | more than 3 years ago | (#34349860)

I'm sure it's a peripheral factor, but it's not one of those "but.. but... but Best Buy's price is 8.5% higher than Amazon!" because of an 8.5% sales tax...

Really? It directly factors into my purchases pretty much every day.

You probably still owe it (3, Informative)

markdavis (642305) | more than 3 years ago | (#34349550)

Just because Amazon doesn't COLLECT sales tax doesn't mean you do not have to pay it. In Virginia (and I expect most states with sales tax), you are required, by law, to list your out of state purchases each year on your income tax forms and pay the tax.

Alternative Calculation in some states (1)

TimTucker (982832) | more than 3 years ago | (#34349616)

Here in Michigan (and presumably elsewhere as well), there's an alternative calculation for "use tax" that you can enter in that's based on your income.

Since you're only obligated to pay the lesser of the two amounts, if you order a large amount online it's often in your best interest to just go with the calculation and forget about trying to keep track of purchases.

(In most years, I think I've wound up paying $50-60 or so with the default amount.)

It affects states differently (1)

antifoidulus (807088) | more than 3 years ago | (#34349580)

Its interesting to see how this affects various states' policies. For instance PA which exempts food, which is rarely bought online, from sales tax is probably losing a bigger percentage of its potential sales tax income than are states like Maryland who have a flat sales tax. I wonder if PA will eventually just give in and start taxing food as well.

It is a question of level playing field (4, Insightful)

140Mandak262Jamuna (970587) | more than 3 years ago | (#34349608)

If a small mom and pop restaurant or a minor retailer is forced to collect taxes internet companies should be asked to collect taxes too. The idea of multiple jurisdictions, exempted products etc are lame excuses. All these people coming out of the wood work cheering on this multi billion dollar corporation shafting tiny jurisdictions out of their meager sources of revenue go suddenly silent when there is a media frenzy urging the government to do something. Some wild fire in the prairie, Govt should airlift water using helicopters to douse it. Oil gushing from a well in the gulf, the govt is expected to boom thousands of miles of coast line. But the moment the crisis is over well funded anti-tax shills shout about govt inefficiency govt stupidity and cheer mega multi-billion multinational corporations tax evasion.

Whatever is the tax rate, we can not have one rule for one set of businesses and another for another set. Govt should not be biasing the field, it should not be picking winners and losers. By forcing off-line merchants to collect sales tax while exempting on-line retailers government is creating a non-level playing field. That is reason enough to be force the on-line guys to play by the same rules.

Re:It is a question of level playing field (2, Insightful)

Belial6 (794905) | more than 3 years ago | (#34349908)

It is an unlevel playing field that has existed for over 100 years, and the brick and mortar stores have dominated most markets. That might not invalidate your argument, but it is a factor that people seem to conveniently ignore.

Re:It is a question of level playing field (0)

Anonymous Coward | more than 3 years ago | (#34349950)

Well in the online world where is the transaction taking place? In your state, in the state where the company is headquartered, where the company's servers are? If my state has a sales tax and I buy something while in FL I do not have to report that sale to my state government. If I am at my house and buy the same thing from the same company, I now have to pay sales tax? Way because of my physical location at the time of purchase? You want to force the FL company to have to track and determine where I am when I buy something from them online. Good luck on purchases done through your cellular phone. How about you are at an airport in another state and you buy something from that same FL store. Do you owe sales tax to your home state, the state you are currently in or none because the company you are buying from is in FL?

Online purchases should be the responsibility of the person buying to report what their online sales are to their respective tax authority.

Unfair Advantage? (3, Interesting)

jgrabell (1695984) | more than 3 years ago | (#34349620)

On the one hand, no sales tax, long waiting times, shipping fees and hassles. On the other hand, sales tax, immediate gratification, no shipping.

Re:Unfair Advantage? (0)

Anonymous Coward | more than 3 years ago | (#34349792)

That's a heavily flawed - dare I say strawman - argument because real stores also need sales personnel, large display areas, dozens if nor hundreds of branches, less choice due to physical restrictions, customers have to drive to the store, parking lots, etc.

Re:Unfair Advantage? (0)

Anonymous Coward | more than 3 years ago | (#34349882)

For only $80/yr, I get free 48hr delivery and $2-4 overnight delivery. No taxes. Awesome customer service (I return things which arrive broken or are otherwise a problem, all the time - I've even returned software for an MMO after launch that was still completely unplayable after three weeks). I know that if I'm unhappy with something for ANY reason, they'll take care of me. On top of that, their prices are great. They're constantly giving me $10, $15, and $20 credits toward videogames every time I pre-order one.

I walked into RadioShack on Tuesday (5, Informative)

brokeninside (34168) | more than 3 years ago | (#34349654)

I was looking for a Firewire 400 to Firewire 800 cable. The salesman went into the back office to look up a product code, came back, and guided me to a rack with 4 pin to 6 pin Firewire 400 cables.

So I left, went to a a computer, fired up the web browser, pointed it at Amazon, and found the cable I needed in about sixty seconds.

When I'm shopping for books, I tend to have a similar experience. I'm always surprised when local shops have the titles that I want. But what is neat, though, is that with the Amazon Marketplace, nine times out of ten, I'm buying from a small bricks and mortar shop even though I'm purchasing from the 800 pound gorilla of e-merchants. Turns out that Amazon doesn't want to stock hardbound copies of Epictetus' Handbook or Farabi's Epistle on the Intellect. But their associates, small booksellers across the county that specialize in this or that, can do so and partner with Amazon to get national exposure.

Which is to say, Amazon's "unfair" advantage with regard to sales tax is a red herring.

NO !! NO !! NO !! (0)

Anonymous Coward | more than 3 years ago | (#34349718)

You walked into "The Shack", man !! There ain't no radio no more, man !! And firewire ?? You be a dinosaur !!

B&M are massively subsidised (0)

Anonymous Coward | more than 3 years ago | (#34349694)

Just try to figure out how much tax you B&M paid to your local govt during the past couple of year. They have zero infrastructure cost and deals to get multiple subsidies in the form of rebates. Although they still collect sales tax that is just a small fraction. There are no laws in most of the states on tax disclosures. These B&M companies typically have agreement with cities/counties where they put up a shop that includes free land, property tax discounts, income tax credit, sales tax rebates etc. (source: http://www.alternet.org/economy/27864). I am surprised that even after the subsidies they are still not able to efficiently compete with online retailers.

Farhad must hate military too (4, Insightful)

deapbluesea (1842210) | more than 3 years ago | (#34349696)

I've lived in 5 states in the last seven years, according to Farhad, I've "enjoy[ed] the fruits of local taxes — police and fire protection, roads, hospitals, and other infrastructure that make its operations possible". Guess what, I pay those local taxes in the form of sales tax on everything I buy. I'm currently helping to prop up the state of California with my hard earned dollar (and you wouldn't believe the cut in quality of life I had to take when I was assigned here).

The argument Farhad should be making is that those states are not benefiting from sales taxes on Amazon purchases. By talking about services paid for by local taxes (not sales taxes), he's getting muddled. But let's analyse that argument too. If states are benefiting from sales taxes paid by an out-of-state customer, then they would essentially be stealing from the state that customer lives in. The money that would be collected by, for instance, Kentucky, on each sale Amazon makes is money that would have been collected in the purchaser's state had they bought locally. In fact, to boil this down to a zero sum game is stupid. I don't simply bury the money I saved from buying at Amazon. Instead, I take my wife to the movies, go out to eat, maybe invest it. Each of these activities results in a business making a profit, which means a job is created or saved (to use a completely useless metric), and someone, somewhere takes a cut of that money in taxes.

Farhad simply lacks a broader perspective. It seems he'd rather complain about a company's success than understand how that success benefits the economy as a whole, which ultimately benefits him as well.

load of bollocks (0)

Anonymous Coward | more than 3 years ago | (#34349738)

"...police and fire protection, roads, hospitals, and other infrastructure.." The first 2 are paid for by Amazon with property taxes on their facilities. Roads are paid for by fuel, license, and weigh station taxes. In case you haven't heard, hospitals are now independent corporations. Amazon pays directly for "other infrastructure" like water, power, communications. Sales taxes are inherently regressive and hurt the poor the most. We don't do that sort of thing here in Oregon, for that reason. Tax those with the money. Amazon wouldn't pay them anyway--YOU the CUSTOMER pay sales tax. Governments don't have a right to tax. Governments everywhere just get bigger, and the tax burden just grows. It's time for that to stop, and be reversed. As for "clever legal tricks", I suggest you wise up. The Supreme Court ruled years ago that tax avoidance (as opposed to cheating) is perfectly legal, and is in fact a national sport in most countries around the world. Stop sucking up to government. Taxes should benefit the taxpayer, but all too often these days they don't. From walnut paneled legislative chambers and offices to multiple stupid wars, taxes too often benefit the upper crust. If they can avoid taxes, why don't you?

Perhaps they all need to work together. (1)

sethstorm (512897) | more than 3 years ago | (#34349768)

Provide a unified front against him, and you remove the weak points he's looking to use.

Unfair? (0)

Anonymous Coward | more than 3 years ago | (#34349794)

Yet Amazon skirts tax collection in most of these places through clever legal tricks.

That's not unfair. It's the American way.

Taxes (1)

knghtrider (685985) | more than 3 years ago | (#34349826)

Amazon pays local property and school taxes (either directly or indirectly); their shipping entities pay fuel surcharges and taxes, as an employer they pay taxes. They're not 'freeloading' on local police/fire services; because it's the local taxes that pay for that. Same for the roads; the monies from fuel taxes and surcharges is what states use to pay for them. Sales tax is just more 'stuffing' of the General Fund where states find new and creative ways to spend it. Here in PA; Amazon has at least three warehouses in the mid-state (Carlisle, Lancaster, and just south of Harrisrburg); with planned employment increases of around 1,000 people through the holidays. If I'm not paying state sales tax for something I buy via Amazon, more the better. If all states saw their 'General Fund' revenues drop due to online shopping, then they should find new and creative ways (such as elimination of unnecessary staff, pensions, more telecommuting and less leasing of space for employees, providing apartments for lawmakers, instead of expensive hotel rooms, etc, etc.) to save money; rather than finding new ways to fund already bloated programs. If you come to PA (as many from surrounding states do) and buy clothing; you pay no sales tax. If I drive to Delaware (as many from PA do) and buy anything, I pay no sales tax. What's the difference in buying a product from Amazon? If they have no legal requirement to collect the tax, I have no obligation to pay it.

Overtaxed Senior Citizens (0, Offtopic)

linuxiac (1831824) | more than 3 years ago | (#34349862)

Both retired military veterans, now 60+, we own 3 homes, and the taxes exceed $5,000 per year, in Florida! Then, we have a 7.5% local and state sales tax!!! The government (State, Federal, & Local) are sloppy wealthy, sucking taxes from our pensions, and our work, and wants more??? Let's stop them spending likd a drunken sailor! It is well past time to throw all the scoundrels out, impose the FAIRTAX that repeals the illegal 16th Amendment to the Constitution, which has NEVER been ratified! Eliminate the huge army of goons that comprise the IRS! Fairtax fully funds Medicare, Social Security, the Federal government, PLUS, makes the Criminal Mafia and drug dealers pay over $1.5 trillion into the tax system! You must be corrupt to want to keep the current system that criminalizes little old ladies, buys votes, supports the 100,000 lobbyists, with corruption, bribes, and promotes voter fraud!

Aren't taxes bad? (0)

Anonymous Coward | more than 3 years ago | (#34349870)

After all the country just elected a Republican dominated congress, and Republicans stand for lower taxes.

Anyway its not the retailer that pays the taxes, its the customer

Sales taxes are the wrong sorts of taxes. (1)

Dr. Spork (142693) | more than 3 years ago | (#34349904)

Look, maybe many Amazon customers don't pay sales taxes, but that's not the real problem here. Sales taxes are highly regressive (as in, poor people pay a much higher portion of their salary in sales tax than rich people). If you want justice for tax dodgers, you need to do three things: close the ridiculous corporate income tax loopholes, make our income tax structure more progressive, and raise capital gains taxes. Compared to that, sales taxes are small potatoes, and they're being paid by the wrong people.

4: Pursue them (1)

sethstorm (512897) | more than 3 years ago | (#34349938)

How about pursuing them across borders? The US has quite the military, and it'd reinforce the "nowhere to run, nowhere to hide" approach.

The states already have the power to fix this (4, Insightful)

Ichijo (607641) | more than 3 years ago | (#34349952)

It's quite simple. Eliminate the state sales tax.

Yes, it means the state might have to raise any fee that doesn't already cover the cost of the government service it's supposed to pay for. And the state might also have to raise the income tax, but that's a progressive tax.

So eliminating the state sales tax will make local businesses more competitive with Internet retailers while also eliminating a regressive tax. That to me sounds like a good deal for everyone.

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