Welcome to the Slashdot Beta site -- learn more here. Use the link in the footer or click here to return to the Classic version of Slashdot.

Thank you!

Before you choose to head back to the Classic look of the site, we'd appreciate it if you share your thoughts on the Beta; your feedback is what drives our ongoing development.

Beta is different and we value you taking the time to try it out. Please take a look at the changes we've made in Beta and  learn more about it. Thanks for reading, and for making the site better!

Amazon Pulling Out of Texas Over $269 Million Tax Bill

Soulskill posted more than 3 years ago | from the not-a-reliable-method dept.

Businesses 811

ralphart writes with this excerpt from the Dallas Morning News: "As a result of an ongoing tax dispute with Texas, Amazon.com has decided to take its ball and go home. The online retailer said Thursday that it would shutter its Irving distribution facility April 12 and cancel plans to hire as many as 1,000 additional workers rather than pay Texas what the state says is owed in uncollected sales tax. Texas wants $269 million from Seattle-based Amazon in past-due sales tax. It sent the bill to the company last October." We've discussed the online retailer's tax battles with other states in the past.

cancel ×
This is a preview of your comment

No Comment Title Entered

Anonymous Coward 1 minute ago

No Comment Entered


Texas Budget Deficit (4, Interesting)

eldavojohn (898314) | more than 3 years ago | (#35176544)

While they're by no means the only state with budget problems, it is kind of coincidental that we're seeing this from Texas in the midst of a budget deficit [kwtx.com] . With $10 billion in lost revenue, they're starting to get creative [bloomberg.com] like demanding university offer a $10k bachelors degree. Oh the abuse of the educational system, both lower and higher education. It's probably going to come down to just cuts across the board [digitaljournal.com] . My friends from Texas have often bragged about it but Texas doesn't have income tax so it's sort of asking a lot to do all this on 6.25% sales tax. You can make promises like "no new taxes" and "more tax cuts" but it looks like they'll run Amazon out of town on this one. Well, they were right that taxes hurt businesses! Bye bye Amazon!

Re:Texas Budget Deficit (2)

tthomas48 (180798) | more than 3 years ago | (#35176732)

Meh. This isn't an onerous business tax. Pretty much all states have this tax. You have a physical presence in the state you pay sales tax. Dell does it. I have no clue why Amazon thought they could skirt it.

Re:Texas Budget Deficit (1)

firesyde424 (1127527) | more than 3 years ago | (#35176778)

Sales tax isn't a tax on businesses, not directly. It's a tax on consumers. What is at issue here is the perceived total price of an item. All other things being equal, when two different companies offer the same product, consumers will choose the one that is cheaper 100% of the time. If Amazon offers something that Tiger Direct offers for the same price, chances are Amazon will get the sale because Tiger Direct charges sales tax.

I am not saying I agree with Amazon, but from their perspective, they do not need to have a physical presence in Texas to sell to consumers in Texas. I highly doubt they put a distribution center in Texas solely because they thought they wouldn't have to charge sales tax. They likely built a distribution center in Texas because of a corporate tax incentive designed to lure business to Texas or perhaps because of Texas's longtime anti labor union practices.

Re:Texas Budget Deficit (2)

hedwards (940851) | more than 3 years ago | (#35176888)

Mostly right, but the problem is that in most states with a sales tax there isn't a sane way of consumers paying their sales tax if it isn't collected by the store. What I mean is that it pretty much involves keeping track of the receipts yourself and then there has to be some way of sending the money and the receipts in to the state.

I'm not aware of any state that actually advertises the process or enforces compliance. Really the best thing would be to just cave and provide a system for telling retailers how to calculate the tax for various parts of the state. Providing that free of charge would almost certainly result in more tax revenues for the state in one way or the other.

Re:Texas Budget Deficit (-1, Troll)

Moryath (553296) | more than 3 years ago | (#35177032)

The problem right now is that the TX legislature got full of a bunch of Retardicans and PeeTardiers who want government to simultaneously provide them cheap everything without being willing to pay for it.

They have this lying jerk "Michael Quinn Sullivan" who runs around claiming that the public education system is "wasting money" because it has a "1 to 1 ratio" of teachers to nonteachers. Technically he's true - because his definition of "teacher" is "runs a homeroom."

He counts as nonteachers the speech therapists, sign language interpreters, ESL teachers, art teachers, music teachers, and anyone else who teaches but doesn't run a homeroom. And then on top of it he counts everyone down to the janitors and bus drivers in his "1 to 1 ratio." I bet there is a 1 to 1 ratio, but it's not a bad thing - ask his supporters what category of employee they can cut without actually screwing up the education system, and these retards just default back to "but but but 1 to 1 ratio but but but" sputtering and retardedness.

The rest of the state budget is similarly afflicted. Their "Dan Patrick" Senator actually was caught on his radio show saying that anything but engineering and medical research is "research nobody cares about." [wikipedia.org]

That's what you get when you let the extreme right-wing nutbags into power.

Re:Texas Budget Deficit (3, Informative)

Maxo-Texas (864189) | more than 3 years ago | (#35176824)

The tax rate is 8.25% for many of the residents.

Plus property taxes are about $1,000 per $50,000 home value.

Our problem is the Perry sucks as governor in the same way Bush did.

Instead of being a true conservative, he was a spendthrift.

Dan Patrick (who is too socially conservative for my tastes) *may* be a true fiscal conservative which would be nice.

Re:Texas Budget Deficit (0)

rwv (1636355) | more than 3 years ago | (#35176898)

Business helps cash flow through the economy by selling products and creating jobs.

State needs money to operate and takes some of that money.

State uses money to provide necessary services to people who buy products and work jobs.

Business gets tax bill from the State and decides to relocate to a different State.

Business sends message to people: we don't want to subsidize your necessary government services.


Obviously Amazon is within their legal rights to seek out favorable tax havens to operate within the United States, but hardball tactics like this make them appear to be quite evil. I'm curious how long it will be before Texas (and other states) start sending them tax bills for the privilege of selling products to residents within their states. If I'm not mistaken, sales taxes are never added to Amazon purchases because of loopholes in the Online Sales / Across State Lines mechanisms involved in buying things over the internet. Obviously Amazon will just pass these taxes along to their customers, but at least they'll finally be competing (tax-wise) on even footing as WalMart and other brick-and-mortar stores.

Every state but one has a 'budget deficit' (5, Insightful)

nido (102070) | more than 3 years ago | (#35176952)

The only state that's NOT having budget problems is North Dakota. Ellen Brown [webofdebt.com] says North Dakota is sitting pretty because they own the Bank of North Dakota [wikipedia.org] .

See How the Nation’s Only State-Owned Bank Became the Envy of Wall Street [motherjones.com] .

All the other states are slaves to their financiers on Wall Street. For example, the City of Phoenix (Arizona) borrowed a billion dollars over the past 5 years to build out the water system. Now the water department wants to raise an extra $24million a year by raising water fees... 'Cause the usury always gets paid first.

I calculate that the interest charge on a billion dollars a year (at 5%) is $50million. If Arizona owned a bank like North Dakota, the Bank of Arizona would have financed the Phoenix water expansion (at, say, 3%). Most of the $50million the city is now bleeding out to Wall Street would instead be flowing into the state's treasury.

The financial crisis is easily fixable, with the right solutions. Money and the Crisis of Civilization [realitysandwich.com] , and ... Richard Clark's A Bailout for the People [richardccook.com] are also on my recommended reading list.

Re:Texas Budget Deficit (1)

cayenne8 (626475) | more than 3 years ago | (#35177052)

It isn't just 6.25% sales tax. They DO have pretty hefty property taxes if I recall.

All states get you..one way or another...one tax or another.

87 comments on the newspaper page (0)

Anonymous Coward | more than 3 years ago | (#35176560)

87 comments on the newspaper page as of a minute or two ago.

How fast before Slashdotters push it over 200?

They still owe texas money. (1)

Anonymous Coward | more than 3 years ago | (#35176608)

Even if the move out they still owe texas $269 million.

Re:They still owe texas money. (2)

Mechagodzilla (94503) | more than 3 years ago | (#35176652)

Yes, but the Amazonian lawyers (ooh, what a visual) will make Texas burn at least that much to get the money...

Re:They still owe texas money. (2)

ColdWetDog (752185) | more than 3 years ago | (#35176846)

Yes, but the Amazonian lawyers (ooh, what a visual) will make Texas burn at least that much to get the money...

One breast, a bow and and a briefcase sends my brain some very mixed messages.


Re:They still owe texas money. (0)

Anonymous Coward | more than 3 years ago | (#35176682)

True but it will be a lump sum deal and they will never get it again. Now they will have to possibly pay unemployment for all or most of Amazon's former employees. Taxes Amazon did pay for operating in the state are lost. etc. Texas is the loser in this deal.

Re:They still owe texas money. (1, Insightful)

Dan East (318230) | more than 3 years ago | (#35176714)

Yes, but Amazon will no longer have a physical presence in the state, thus Texas will not be able to collect on any future sales tax. Texas needs to cut some sort of compromise deal with Amazon or they will lose out in the long run, but in lost revenue from jobs and physical infrastructure, as well as potential future sales tax.

See the problem is Amazon did not collect sales tax for Texas from those past sales, thus this money has to come out of their bottom line, instead of literally just taking money from the state population and giving it to the state government when sales tax is tacked on as normal.

Re:They still owe texas money. (4, Insightful)

Dunbal (464142) | more than 3 years ago | (#35176854)

Not only that, but it will make other businesses think twice about Texas, too. There's a law about taxation: the more you try to get, the less you actually get. Bankrupt and irresponsible countries, states and municipalities should correct their spending binges instead of looking for creative taxation.

Re:They still owe texas money. (5, Interesting)

Mr. Slippery (47854) | more than 3 years ago | (#35176890)

Texas needs to cut some sort of compromise deal with Amazon or they will lose out in the long run

No, if every state stood up to parasites like Amazon, they'd go out of business, leaving the field clear for thousands of small businesses to spring up. That's the long-term win, not kowtowing to corporate bastards.

Re:They still owe texas money. (3, Insightful)

hedwards (940851) | more than 3 years ago | (#35176948)

You mean like we in WA have been doing with MS? Right now MS owes our state just about enough money alone to plug our deficit. What we really need is for the federal government to step in and start doing something about the mess that is interstate commerce. States aren't going to be able to negotiate when they're faced with what is typically handled like the prisoners dilemma

Enough of this (4, Insightful)

schnikies79 (788746) | more than 3 years ago | (#35176636)

I can't blame Amazon at all for this.

This whole tax from the state it comes from/tax from the state you live in needs to be decided (federally) and set in stone once and for all. Same goes for who collects it and when.

Re:Enough of this (1)

chispito (1870390) | more than 3 years ago | (#35176908)

I can't blame Amazon at all for this.

This whole tax from the state it comes from/tax from the state you live in needs to be decided (federally) and set in stone once and for all. Same goes for who collects it and when.

You mean a sensible use of the Commerce Clause? Unheard of!

Re:Enough of this (1)

curmudgeous (710771) | more than 3 years ago | (#35176960)

"...it would shutter its Irving distribution facility April 12..."

Sounds like they have a storage/distribution center in Texas. If so, they owe the state sales tax. That's pretty much how it's done everywhere.

Re:Enough of this (5, Interesting)

natehoy (1608657) | more than 3 years ago | (#35176980)

IANAL, but I've done a lot of tax programming for major retailers over the years.

While I agree that sales taxes are ridiculous and hard and all that, I feel it's important to point out that Amazon actually has a presence in Texas, and therefore when they sell product to Texans they actually do need to be collecting sales tax and remitting it to the State of Texas. This is commonly known as "nexus" in sales/use tax circles. This is what Texas is asking for - sales/use tax from sales to Texans from Amazon (who has a presence in Texas and is therefore subject to the laws of Texas with regards to their sales in Texas).

If Amazon was being told they needed to collect on behalf of, for example, Maine, they have the absolute right to tell Maine's comptroller to go straight to hell. In fact, as a citizen of Maine, I'd love to be able to listen to that conversation. I'll never be able to tell our comptroller to go to hell, so it'd be great to be able to hear someone else say it.

Amazon has no presence here in Maine, therefore they have no obligation to follow Maine's regulations surrounding sales/use taxes, which are intrastate law, not interstate. The sales/use tax on things I buy from Amazon is my responsibility to track as a Mainer doing business with a company outside the state, and I owe that money to Maine at the end of the year (and we have a system called "Alternative Use Tax" where I pay a small stipend based on income tax to cover any incidental out-of-state purchases I happen to make if I don't want to track them all, which I use).

But Amazon has a presence in Texas. In the same way that the company I currently work for has to start collecting and remitting State sales taxes every time we open our first store in each State (or call center, or warehouse, or business office, or whatever), Amazon really does owe that sales tax to the State of Texas, whether they have been collecting it from their customers or not.

Now, they can certainly choose to pull out of Texas in order to avoid having to collect taxes there, that's within their rights. But they still owe the State of Texas $269 million (plus whatever other sales they make before they finish the pullout), because they were supposed to be collecting that money from their customers who live in Texas for the entire time they've had a presence there.

Note to Amazon: Please come to Maine. We could use the jobs. I'll happily pay sales tax on purchases made from you.

Normally (4, Insightful)

phantomfive (622387) | more than 3 years ago | (#35176640)

Good. Sales tax is a regressive tax, meaning poor people pay more than rich people. Even if you want to stick it to Amazon, in a very real way, sale tax is passed on to the consumer. The sooner we can get rid of that awful tax and move to a more equitable tax system, the better.

(Note: it is true you can soften the blow of a sales tax somewhat by exempting things like food, things that poor people buy; but then it's a hump tax, where the middle ends up paying the highest percentage. That's not equitable either).

Re:Normally (1)

funwithBSD (245349) | more than 3 years ago | (#35176672)

the middle class always gets humped, sans lube.

Re:Normally (2, Funny)

Dunbal (464142) | more than 3 years ago | (#35176924)

The middle class deserve to be humped. They're rich enough to consider themselves "better" than the poor, and not rich enough to realize that they're not.

Re:Normally (2, Insightful)

Anonymous Coward | more than 3 years ago | (#35176710)

Good. Sales tax is a regressive tax, meaning poor people pay more than rich people.

Yeah, cause the poor buy SO much more than the rich...

Re:Normally (3, Interesting)

somersault (912633) | more than 3 years ago | (#35176866)

They might. When I buy a £100 pair of trail running shoes, they last until the sole wears through - but cheaper shoes I've had in the past have sometimes only lasted a few weeks. I'm sure this applies to more than just shoes. When you can afford quality products, you don't have to buy stuff so often. Being rich means you can buy stuff more often if you wish to of course, but then again, I'm sure some rich people are now rich because they have saved, then invested wisely.

Re:Normally (1)

Anonymous Coward | more than 3 years ago | (#35176926)

Amen to that. It amazes me how some people think a flat tax is worse for the "poor". Um, if taxes were higher for the rich they would likely buy a little less. Less goods sold = less jobs provided. It's called trickle-down. And that kind of thinking does hurt the poor as they are the class usually employed in production lines.

Re:Normally (1)

Galestar (1473827) | more than 3 years ago | (#35177054)

In proportion to their income, yes actually they do. Some states had various "Luxury Taxes", or eliminate sales tax on "essentials" to offset this, but in general, sales tax is a regressive tax.

Re:Normally (1)

TaoPhoenix (980487) | more than 3 years ago | (#35176728)

Income Tax is a Hump Tax.

The poor have some neat credits, so they do okay, and we know the rich have even neater tricks, so they do great.

Re:Normally (2)

Dunbal (464142) | more than 3 years ago | (#35177006)

But thanks to the magic of inflation, even the poor eventually get moved into higher tax brackets over time. No new legislation required. Why do you think the Fed is printing money like mad again? Devaluation of the currency 1) devalues the debt and the interest on the debt, 2) destroys the value of savings, forcing people to make risky investments which "stimulate" the economy (efficiency be damned), 3) shoves people into higher tax brackets thus increasing government revenue. The down side of course is that the value of the currency is destroyed, but barring a revolution, all they have to do is replace the dollar with the New dollar and start again. Of course everyone becomes poor again except the Friends of the Fed, but then again what's new? So enjoy your million dollar houses, soon they will be billion dollar houses. That way you can feel you can afford your $10,000 toilet paper roll.

Re:Normally (2, Insightful)

Skarecrow77 (1714214) | more than 3 years ago | (#35176742)

Good. Sales tax is a regressive tax, meaning poor people pay more than rich people. Even if you want to stick it to Amazon, in a very real way, sale tax is passed on to the consumer. The sooner we can get rid of that awful tax and move to a more equitable tax system, the better..

I assume you're speaking as a relative percentage of entire income, because if you mean that in absolute terms, it's a pretty silly statement. I think it's a pretty safe bet that "rich" people purchase a good bit more than "poor" people do, and thus pay significantly more money in sales tax. In the unlikely event that such a statement isn't true, and that rich people aren't buying more than poor people... well maybe that's why the poor people are poor, maybe they should spend less?

I know, I know, rich man keeping the little man down, blah blah top 10% of the population has 80% of the wealth, etc. whatever. all I know is that I've met many "poor" people in my life who when they get that income tax refund or birthday gift of cash etc, go out and buy a couch or a tv instead of paying their credit card bill.

Re:Normally (1)

phantomfive (622387) | more than 3 years ago | (#35176856)

So what? In what world is "poor people pay a higher percentage of their income in tax than rich people" even remotely fair? And whether they want to pay off their credit card or buy a couch is their decision. It may seem like a bad decision to you (and it does to me also), but it is their decision, and it's not an excuse to take MORE money from them.

Re:Normally (3, Insightful)

Skarecrow77 (1714214) | more than 3 years ago | (#35176992)

So, you would suggest that rich people should pay sales tax in relation to their income? So if the poor person buys a pair of shoes and pays $3 sales tax on them, the same pair of shoes should rack up $300 for the rich person? In what world does that seem fair to you? That's massively penalizing success and encouraging failure. how is anybody supposed to succeed if success is penalized?

The whole idea of making more money is that you get to keep more of it, so your expenses are lower relative to what you earn. it sounds to me that you want to arbitrarily raise expenses based on what you earn, which of course defeats the entire purpose of attempting to better one's place in life. Maybe that's the idea comrade?

Re:Normally (0)

Anonymous Coward | more than 3 years ago | (#35176922)

I think it's a pretty safe bet that "rich" people purchase a good bit more than "poor" people do, and thus pay significantly more money in sales tax.

"The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.

Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.

But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.

This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness."

Re:Normally (-1, Flamebait)

dmgxmichael (1219692) | more than 3 years ago | (#35176934)

Heh heh yup. Poor people remain poor through, well, poor decisions. They do poor stuff. It's their poor way. And to all you bleeding heart liberals, I pulled myself up by my bootstraps from about as far below the poverty line as you can be and still live in the USA, so f*ck off - I'll make fun of those who choose, through their own bad decisions, to remain poor all I want.

I have little sympathy for those who will not try to better themselves or their station. Society owes no one anything. Shutting up now before this goes into a rant far larger than a slashdot post deserves.

Re:Normally (0)

Anonymous Coward | more than 3 years ago | (#35176748)

(Note: it is true you can soften the blow of a sales tax somewhat by exempting things like food, things that poor people buy; ).

Yeah cause those rich bastards got that way by not eating.

Re:Normally - Equity (2, Insightful)

Anonymous Coward | more than 3 years ago | (#35176762)

You got it wrong.... sales taxes are the only legitimate tax since it is broad based, not avoidable, and needs no IRS and no government intrusion into personal privacy.

You can completely exempt all sales taxes on the poor by a prebate of the amount of sales tax up to the poverty line to everyone, so no one pays sales taxes on the basic necessities.

It is the Fair Tax -- fairtax.org.

Re:Normally - Equity (1)

phantomfive (622387) | more than 3 years ago | (#35177000)

You can completely exempt all sales taxes on the poor by a prebate of the amount of sales tax up to the poverty line to everyone, so no one pays sales taxes on the basic necessities

OK, you are obviously blind-mentally since you didn't see where I addressed this point in my first post, but if you set up sales tax this way, inevitably the middle class ends up paying the highest percentage of their income as taxes. How is that fair? A real fair tax is built in such a way that the wealthy pay the same or a higher percentage of their income.

Some fairtax schemes are really fair. Abolishing income tax and replacing it with sales tax is a scheme by unscrupulous rich people to reduce their taxes under the name of fair. Also, if you think using sales tax will get rid of the IRS, you are ignorant. That's like saying, since our taxes are deducted automatically from our paycheck, we have no need of the IRS. No, the IRS will always be there.

Re:Normally - Equity (1)

hedwards (940851) | more than 3 years ago | (#35177010)

If you believe that, I've got a bridge I'd like to sell you. A sales tax in excess of 20% would kill the economy. That's not something which I say lightly. Taxing consumption by that much in what's become a consumer oriented country isn't good at all. And it's rather perverse to put up that amount of tax on something that you're trying to encourage.

Re:Normally (1)

markass530 (870112) | more than 3 years ago | (#35176826)

poor people may pay a higher percentage of their income, but not more then rich people. (for the record I'm very much poor)

Re:Normally (1)

initdeep (1073290) | more than 3 years ago | (#35176850)

yes, the person who spends $40k a year and pays an average of X% of sales tax (based on exempt and non-exempt items purchased) will pay more than the person who spends $100k a year and most likely has a a higher average tax rate because they purchase MORE of the non-exempt items (you know, more luxury items and fewer food items per dollar spent).
Oh wait.

sales tax is a set percentage.
every one pays the same percentage on non-exempt items.
if you want to argue that "poor people" spend a larger percentage of their total income than "rich people" then you may have a point (depending on your definition of rich).

Personally, I would wonder how Amazon is supposed to forward the sales tax amount to the state since they did not collect it in the first place?
So in reality, I have no sympathy for the State of Texas as they are trying to retroactively collect taxes that were never collected in the first place.
If they need the money, they need to start on a date and allow Amazon to charge the tax to customers as necessary so it can be collected and then forwarded.

Re:Normally (0)

Dunbal (464142) | more than 3 years ago | (#35176906)

Sales tax is a regressive tax, meaning poor people pay more than rich people

What? Run that by me again? Poor people, who by definition have very little money to spend and hardly ever buy anything, pay MORE sales tax than rich people, who are spending money all the time? Wait, did you work at Enron or a dot-com?

Re:Normally (2, Interesting)

Archangel Michael (180766) | more than 3 years ago | (#35176928)

All taxes are regressive. The lie of the left is taxes can be progressive at all. Everyone pays all the taxes. Hiding taxes among the 'rich' doesn't help people realize this, as the taxes just get hidden, and passed down to the little guy in the form of higher prices, lower wages and so on.

But this suits the "progressives" because it creates class warfare upon which to win elections. And when you pit the 'rich' against the 'poor' the people in the middle get screwed the most. If everyone were to realize how much of what they buy is "tax" they throw a fit and toss all the bums out of the legislature and executive branches of government.

Here's a picture: We're taxed when we earn money. We're taxed when we spend money. We're tax openly and we're taxed in secret (hidden). We're taxed to stick it to the other guy without realizing we are the "other guy".

You want my solution to taxes, spending, and so on? It is simple. Vote on things you don't want society to promote, make it legal and tax those things. Legalize drugs, tax them. Legalize Prostitution, tax it. Legalize whatever you think is a "victimless crime" and tax the activity. You'll end up with far more revenue, far less crime (by definition) and the problems of society become controlled.

You can see this with Cigarettes. Legal, taxed to death, and we don't have nearly the problem with second hand smoke as we used to.

Re:Normally (1)

msauve (701917) | more than 3 years ago | (#35177040)

Sales tax is a regressive tax, meaning poor people pay more than rich people.

Only if poor people buy more than rich people, which I very much doubt. Sales tax is completely blind to a person's income - it's as equitable as a tax can be, unless you want to get rid of all current taxes by dividing the cost of government by the number of citizens, then passing out an equal bill to each. But, I suppose you consider it "equitable" when people are discriminated against on the basis of their success.

Re:Normally (0)

Anonymous Coward | more than 3 years ago | (#35177058)

You got modded insightful, which shows the mods are as ignorant as you are. Rich people buy more things and more expensive things a sales tax is the only fair tax there is.

Taxes (2)

MDillenbeck (1739920) | more than 3 years ago | (#35176648)

All I know is my state's law (Wisconsin) - basically, with most online sales it is the burden of the purchaser to report the purchases/sales taxes of items bought on the internet at the end of the year with your state income tax filing. However, I believe if you maintain a brick & mortar business in the state then it becomes the burden of the business to file the taxes (probably because they already must pay in their state taxes).

Unfortunately, there is no good solution with state sales taxes. If you put the burden on the purchaser, then the state will have to scrutinize every citizen (which is not practical/possible) - but this problem doesn't go away if you require businesses to collect them. There are thousands of small retailers who would have to file forms with every state they sold in, and the individual states would have to scrutinize every online business for sales (also not practical/possible).

Hmmm... maybe if we did away with a sales tax and made it a disposal tax....

Re:Taxes (1)

jgtg32a (1173373) | more than 3 years ago | (#35176782)

Yeah it's referred to as a Use Tax, and it doesn't only affect online stores it also affects stuff you bought in another state, you are suppose to pay the difference between their sales tax and you state's use tax. Naturally you don't get a refund if that value is negative.

Re:Taxes (1)

nametaken (610866) | more than 3 years ago | (#35176820)

It seems like the doable solution is actually for the state to collect sales tax from the business on all sales, regardless of purchasers place of residence. I suppose the problems there are that you'd have to make this mandatory at the federal level (which could be overstepping it's authority on the issue), figure out how to handle businesses that call one state home but do fullfillment out of another state (Amazon, et al), and then all states would have to compete on "business friendliness" to be able to collect sales tax. Now you have to figure out how to handle localized tax code, etc. Yikes.

I'd guess that no matter how you handle that, places like Chicago would be looking at a mass exodus at about 11% sales tax.

Re:Taxes (1)

hedwards (940851) | more than 3 years ago | (#35177070)

There's three problem, online retailers like being able to offset some of the costs of shipping with savings on tax, companies don't want to deal with the complicated system necessary to assess the correct sales tax for the numerous localities and lastly the federal government is the only part that can resolve the issue. The federal government doesn't really care because most states have an income tax and are more interested in other things.

Re:Taxes (1)

Archangel Michael (180766) | more than 3 years ago | (#35177076)

If you put the burden on the purchaser, then the state will have to scrutinize every citizen (which is not practical/possible) - but this problem doesn't go away if you require businesses to collect them.

Why does government feel the need to burden the people for anything? The government is here to help society, not put unreasonable burdens on it.

Texas asked for it in the beginning (4, Interesting)

Stumbles (602007) | more than 3 years ago | (#35176658)

Amazon just out of the blue did not decide to start operations in Texas. No, they had incentives, you know like tax cuts and the like. This is not an uncommon thing. The point here is this; many states have decided to suck the dicks of companies just so they will bring "tons-o-jobs" to their area. Companies have gotten used to this notion. The fault falls squarely on the states shoulders by allowing companies to expect no taxes.

Re:Texas asked for it in the beginning (5, Insightful)

MickyTheIdiot (1032226) | more than 3 years ago | (#35176956)

These tax breaks are the great folly of our time. They can bring in a large-looking number of jobs to an area and make a politician look good for a limited amount of time, then the companies bail and often the taxpayers got very little for their money.

It's amazing that everyone thinks that big business is what drives jobs. That's a joke. The real job growth comes with small business. Big businesses will soon just be only the elite people at the top ordering all their stock from the 3rd world sweatshops. They aren't going to save the economy of the U.S. Why aren't we spending our money to support these small businesses that actually care about their communities instead of giving these huge breaks to companies that will leave at the drop of a hat. My guess it all has to do with who have the most lobbyists.

Crazy Texas (-1, Troll)

b4upoo (166390) | more than 3 years ago | (#35176660)

Political corruption and whacked out laws are a very good reason for avoiding Texas either for businesses or for people. They have some of the sickest, knee jerk, back water laws known to man.

Re: Crazy Texas (0)

Anonymous Coward | more than 3 years ago | (#35176916)

Thanks for sharing your nuanced, informed take on the matter. I'm sure you live in Utopia.

Re: Crazy Texas (1)

SrJsignal (753163) | more than 3 years ago | (#35176988)

Care to state an example of a "whacked out law"? Oh, that's right you're just blowing smoke up everyone's ass pretending like you know anything about Texas or our laws.

Other States (5, Informative)

dunezone (899268) | more than 3 years ago | (#35176664)

Amazon thinks Texas is bad? Illinois is trying to get about 6 years back-taxes from online shoppers They want everyone who purchased goods in the past 6 years online to pay back-sales-taxes on those goods. How that is considered legal is amazing.

http://archive.chicagobreakingnews.com/2010/12/state-to-offer-sales-tax-amnesty-for-online-shoppers.html [chicagobreakingnews.com]

What's the dispute? (1)

hawguy (1600213) | more than 3 years ago | (#35176678)

The article doesn't say what the nature of the dispute is -- is Texas asking for use-tax owed by all Texas purchasers that were shipped from that warehouse? Tax for all Texas purchasers shipped from any warehouse? Tax for all purchases from that warehouse?

If they are asking for taxes owed by all Texas purchasers, I think Texas has a point -- Amazon has a presence in their state, so probably should be collecting sales tax. Though I'm sure Amazon feels differently. I thought Amazon only put distribution centers in states without a sales tax exactly for this reason.

Did Texans really purchase over $2 billion of goods from Amazon?

Re:What's the dispute? (2)

Esospopenon (1838392) | more than 3 years ago | (#35176852)

According to an article at Reuters [reuters.com] the dispute is "uncollected sales taxes for purchases that its residents made" from December 2005 to December 2009. The $269 million figure also includes interests and penalties.

Re:What's the dispute? (1)

Locke2005 (849178) | more than 3 years ago | (#35177036)

The problem is that legally it is the residents' responsibility to pay the sales tax, not the merchant's. Amazon should simply turn over their sales records of all items shipped to Texas residents during that time period and tell the state, "Go ahead... collect it from them!"

Re:What's the dispute? (1)

Raxxon (6291) | more than 3 years ago | (#35176874)

Sales Tax is collected for entities that have residence in state. The "sale" may happen in Washington, but because they have a presence here in Texas they are required by state law to collect and account for sales tax for purchases made in the state of Texas. The issue is they have a fulfillment warehouse here in Texas. Orders are processed and shipped from here. That means they have a presence here. Dell pays these taxes, Blizzard pays these taxes (WoW account subscriptions), Sony, Microsoft... I could go on. Why does Amazon think they should be exempt?

So what's the penalty? (5, Insightful)

dkleinsc (563838) | more than 3 years ago | (#35176698)

Last I checked, that makes Amazon tax evaders. They broke the law, and are now fugitives from justice. So I assume the state of Washington will be aggressively tracking them down and extraditing them to Texas for trial. Or maybe the state of New York will seize their assets on Wall St to pay the bill. Or maybe the feds will be getting involved and garnishing their profits.

Oh, wait. Sorry. That would be if a real person didn't pay a $269,000 tax bill. This is a corporation not paying a $269,000,000 tax bill, so they might get a slap on the wrist.

Re:So what's the penalty? (0)

Anonymous Coward | more than 3 years ago | (#35176834)

Uh, no. Maybe you should RTFA first. What texas is attempting to do is clearly against the law.

Re:So what's the penalty? (1)

DCFusor (1763438) | more than 3 years ago | (#35176894)

Or, Sony would be doing jail time for rooting all those boxes, instead of suing GeoHot for finding out how to turn on "other opsys" after Sony stole back the functionality.

The fault is giving corps the rights of people, but without the liabilities in my view. We poor humans have to die at some point, they don't. We go to jail when we break the law, they pay a fine that is usually far less than the ill gotten gains they made doing it, so to them there's no rational reason to obey the law.

Best law money can buy, but for who?

Re:So what's the penalty? (1)

Anonymous Coward | more than 3 years ago | (#35176896)

You should do some research. Texas at one time had exempted internet retailers in their state from the physical presence tax as long as they didn't actually have a physical store front (they also exempted manufacturing facilities from the physical presence clause). It was ended more abruptly rather than being gradually phased out as promised so companies like amazon were more or less blindsided.

Quit the melodrama (0)

Anonymous Coward | more than 3 years ago | (#35176910)

Amazon continues to appeal the tax bill through an administrative process, Spelce said, “and it’s going to be a while” before a decision and potential appeals are completed.

Texas courted them with tax breaks and such and then all of a sudden they changed their mind and handed over a huge bill. Of course Amazon is going to contest it. If the court decides that they owe the money, then they will pay, but it will also be the last sales tax they ever pay to Texas.

Re:So what's the penalty? (0)

Anonymous Coward | more than 3 years ago | (#35176994)

And aren't corporations the same as a person according to our Supreme Court?

Where's Obama? (1)

Dishwasha (125561) | more than 3 years ago | (#35176724)

This is exactly the kind of behavior that I thought the Obama administration was going to crack down on. Business using shelters and practices to avoid fairly contributing their taxes. I'll be interested to see if this gets any traction with the administration since I personally believe this is one of the biggest economic failures in America.

Re:Where's Obama? (0)

MickyTheIdiot (1032226) | more than 3 years ago | (#35177008)

In terms of corpratism, Obama is only slightly less rabid than Bush of Clinton.

He's a huge disappointment in this area and I won't vote for him again.

Re:Where's Obama? (0)

Anonymous Coward | more than 3 years ago | (#35177050)

Obama's "solution" isn't going to work. Those companies will just in turn move over-seas to different countries who have a less oppressive tax system (e.g. BP). Think of it from the company's perspective: they have a financial responsibility to maximize the profits for their shareholders. Otherwise, people would not invest in Amazon, which in turn would mean there would be no Amazon in the first place. States (and the current administration) needs to have a more realistic take on how free-market economies work, and not just take a stance that sounds good to the left-leaning ears. Also, keep in mind "fairly contributing their taxes" is solely defined by the Texas lawmakers, so there's a little circular reasoning with that argument.

Re:Where's Obama? (0)

Anonymous Coward | more than 3 years ago | (#35177068)

Riight... Even Amazon can't avoid taxes on interstate commerce, rest assured they are paying that... so you still want the Federal Government to intervene in state affairs, or is this just blaming Obama for anything you can think of? Get a civics degree you maniac, or just read the 10th Amendment.

Taxes from within the state or across the state??? (0)

Anonymous Coward | more than 3 years ago | (#35176756)

one thing the article fails to mention is if the taxes Amazon owes are for purchases made that were within state lines. That large figure could mean across the state, in which Amazon does not have to pay that at all and this is all sensationalist news.

Take for example, Newegg.com. I have a friend who pays sales tax when he buys something from newegg because he lives in Tennessee. And i know another person who pays sales tax because they live in California. So, if Amazon has a distribution center in Texas, then they have to pay sales tax for purchases made within the state!

If I buy from tigerdirect, I pay sales tax because their HQ is located in Miami, FL.

The beginning of the end for the US (2)

guruevi (827432) | more than 3 years ago | (#35176764)

With millions being added to the US debt in minutes now I wonder how long it will take for foreign countries to stop extending credit. Will it be when the debt to gdp ratio reaches over 100% (it's currently 97%) meaning we have about as much debt as product. US governments at all levels are currently bankrupt and it's companies like Amazon, Google and others that are the only thing that's left of the US, they can basically foreclose and take over the US government unpunished.

Re:The beginning of the end for the US (0)

Anonymous Coward | more than 3 years ago | (#35176870)

Even with all that the U.S. has one of the lowest debt to gdp ratios in the G8.

Re:The beginning of the end for the US (1, Interesting)

santax (1541065) | more than 3 years ago | (#35176976)

Let me put it this way, as a business-owner in Europe I don't let American companies buy on credit any more. It's just to dangerous, the US is printing dollars to make up for foreign debts and thus increasing it's debts and inflation. Combine that with the debt that is already out there... and I just know that if I want to see my money from US companies, they have to pay up front, because it won't be long before that whole system in the US will collapse. And I can see a lot of other companies doing the same at this point. Not just yet with the really big deals (MS and Google are good partners on a financial level) but I do believe that if the US keeps this up (printing money) it won't take 5 years before those big companies will have to pay up front also. It's just getting very risky doing business with the US... next to all the lawsuits you can get involved in, the unfair protecting of US manufacturers, and now this.... Man, the US should get it shit sorted before it's to late.

Somewhere in Texas ... (0)

Anonymous Coward | more than 3 years ago | (#35176770)

... a mayor is tearing apart a freshly printed out budget report.

Great news for local business! (1)

DogDude (805747) | more than 3 years ago | (#35176780)

This is great news for local business. The massive advantage that online retailers get for being able to get by not charging sales tax needs to end. Most consumers are too short-sighted, and too greedy to consider that when they buy online, they're short-changing their own community. Let's hope there's a blanket solution from the federal government in the works to permanently solve this very real issue.

Re:Great news for local business! (0)

Anonymous Coward | more than 3 years ago | (#35176954)

Absolutely. I've been thinking about this a lot lately, and I'd rather support my neighbor than Amazon. Nothing against Amazon, but they don't live next door to me.

Oh, yeah, and I heard something about those fleets of brown trucks delivering everything I being bad for the world or something.

Re:Great news for local business! (0)

Anonymous Coward | more than 3 years ago | (#35176958)

Small businesses like Walmart?

Re:Great news for local business! (2)

Even on Slashdot FOE (1870208) | more than 3 years ago | (#35176998)

I don't save 5% or 10% online, I often end up saving 30% or more even after taking shipping and handling into account. Remember, the cost to send it via UPS is offset at least partially by the cost of going to the store and picking it up myself.

Charging sales tax won't make physical businesses any more attractive outside of situations where I want the product right now, all it will do is ensure I buy less things from brick and mortar shops to make up the difference.

If local governments want to save money, they should actually shop for low prices instead of taking kickbacks. Or just giving the money to contractors who don't do the job and refusing to fine and/or prosecute them.

Amazon won't be missed in Texas (0)

Anonymous Coward | more than 3 years ago | (#35176800)

I can't imagine people read too many books in that state anyway.

From a business owners position (0)

Anonymous Coward | more than 3 years ago | (#35176868)

Well I for one applaud Amazon for sticking with their position. In states where there are burdensome taxes laws (Ohio I'm looking at you where every county / intersection has different tax rates) its just the state putting the labor/effort for taxes on the business owner. So I have to staff additional people just to keep up with the additional tax laws, rates, and changes - how does this bring value to my company or customers? It doesn't - I have to raise my prices to cover the overhead. I'd be lying if I said I didn't want to leave the states where I'm having to spend so much time/effort collecting taxes and providing audits and proof that I've collected taxes from individuals to the state/county. Its also not exactly fun arguing with my customers why they should be paying the taxes or tax rate (some are for profit some are not).

Corporation rights! We decide when&how much we (0)

Anonymous Coward | more than 3 years ago | (#35176930)

This just shows that more tax cuts for the rich and above is needed, we can't let them pay like poor people! Oh the horror for an equal free and fair society! We need less gavurnament intervention! Let the free market decide!

Maybe its time to make these sort of companies pay what is due like anyone else following the law or nationalise them and remove the business licenses from the group involved and re-sell them if it makes sense.

Stupid (0)

Anonymous Coward | more than 3 years ago | (#35176938)

Seems like Texas would make more in the long run in property tax and taxes from the stuff the 1,000+ employees would be buying.
Seems like in the long term Texas would make more money by having Amazon there then chasing them out.

I can only see Amazon growing and as it grows they will open more which means more employment for Texas residents.

The insistence on doing this is just a bad long term decision on Texas's part.

US Constitution : States cannot tax exports (0)

rcb1974 (654474) | more than 3 years ago | (#35176940)

Section 9: "No Tax or Duty shall be laid on Articles exported from any State." Are these taxes Texas wants to collect on stuff that Amazon exported to another state?

Amazon, welcome to Oregon! (1)

Locke2005 (849178) | more than 3 years ago | (#35176978)

We don't have any sales tax here, and we need the jobs! Where would you like to build your new warehouse, right next to PDX? We'll make it happen.

Dear Texas, does the phrase "Aim at foot. Pull Trigger." mean anything to you?

Sales Taxes as implemented are anti business. (4, Insightful)

LWATCDR (28044) | more than 3 years ago | (#35177042)

They way that sales taxes are collected are really a pain for any online business.
The sales tax varies not just state by state but even county by county. And for an online order where to you charge from? I work in one county and live in another. I if I buy something online at my office do they charge the sales tax of the place where I order or where it is delivered to?
What about when I use my cell phone and I am on vacation and I buy an app or a song?
Should it use the GPS and decide?
If I buy a gift for my mother in law from Amazon should I pay Florida or Texas sales tax?
Sales tax and online sales just don't work well. And if it is a pain for someone like Amazon which probably could deal with it but a nightmare for any small company trying to do business on the internet.

Good. Maybe they'll expand their Delaware shop (0)

Anonymous Coward | more than 3 years ago | (#35177060)

Amazon has a huge facility in Delaware now, where there IS no sales tax. Maybe this will get them to expand it. (Sales tax is unlikely ever in Delaware because the surrounding states have such tax, and lack of such is a draw for merchants in Delaware. Everyone realizes that putting in even a small sales tax would mean many of those businesses would move elsewhere or fail.

Load More Comments
Slashdot Account

Need an Account?

Forgot your password?

Don't worry, we never post anything without your permission.

Submission Text Formatting Tips

We support a small subset of HTML, namely these tags:

  • b
  • i
  • p
  • br
  • a
  • ol
  • ul
  • li
  • dl
  • dt
  • dd
  • em
  • strong
  • tt
  • blockquote
  • div
  • quote
  • ecode

"ecode" can be used for code snippets, for example:

<ecode>    while(1) { do_something(); } </ecode>
Sign up for Slashdot Newsletters
Create a Slashdot Account