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Amazon Drops California Associates to Avoid Sales Tax

samzenpus posted about 3 years ago | from the tax-the-tubes dept.

Businesses 623

PCM2 writes "Residents of California who participate in the Amazon Associates Program received an email warning them that the program will be terminated as soon as a new California law goes into effect. The law, which CA governor Jerry Brown signed, would require online retailers to collect sales tax on purchases. According to Amazon's statement, 'We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors.'"

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623 comments

i oppose Bezos' patents... (0, Flamebait)

Anonymous Coward | about 3 years ago | (#36621102)

...because they are unconstitutional and counterproductive.

Re:i oppose Bezos' patents... (4, Informative)

CRCulver (715279) | about 3 years ago | (#36621124)

Come on, even Stallman and the FSF called off their Amazon boycott years ago after being satisfied that the accumulation of patents was for defensive purposes only.

Re:i oppose Bezos' patents... (0)

Anonymous Coward | about 3 years ago | (#36621162)

Defending against competition, yes?

Re:i oppose Bezos' patents... (2)

somersault (912633) | about 3 years ago | (#36621600)

Defending against patent trolling competition, yes.

Re:i oppose Bezos' patents... (3, Insightful)

Oxford_Comma_Lover (1679530) | about 3 years ago | (#36621202)

> 'We oppose this bill because it is unconstitutional and counterproductive.'

Is your point how ridiculous the statement is?

If Amazon really believed it was unconstitutional, they would keep their associates and fight it in court. Even mid-priced lawyers would win if it were that simple and obvious, so the transaction cost of the lawsuit shouldn't preclude them from doing so. They figure there's a decent chance that it is not unconstitutional, which is why they are pulling out. (i.e. the downside risk of being ordered to pay sales tax.)

Also, if B&N is smart, they'll snap up a whole lot of business in Cali today.

Re:i oppose Bezos' patents... (5, Insightful)

xkuehn (2202854) | about 3 years ago | (#36621374)

Even if you are in the right, going to court is not easy and cheap.

You're also not guaranteed to win.

Great way to cut down on the affiliate link spam! (0, Troll)

tomhudson (43916) | about 3 years ago | (#36621108)

Now please extend this to the other 49 states.

Re:Great way to cut down on the affiliate link spa (1)

igreaterthanu (1942456) | about 3 years ago | (#36621156)

If all the states had the tax and so there would be no advantage to leaving California, why wouldn't Amazon continue the program?

Re:Great way to cut down on the affiliate link spa (4, Insightful)

tomhudson (43916) | about 3 years ago | (#36621184)

Because then they'd have to collect state and muni taxes, and their price advantage would either become much less, or go negative.

"Gee, I can buy it for $50 at the store today, or $50 on Amazon and have it Monday, but I'll get free shipping ..." - most people will just buy it locally.

Re:Great way to cut down on the affiliate link spa (5, Insightful)

CRCulver (715279) | about 3 years ago | (#36621208)

Because of the closing of many neighbourhood book and CD shops, and the shrinking selection at those locations that remain open, you often can't "buy it at the store today" and online is the only way to go anyway.

And what does this have to with taxes? (2, Insightful)

SmallFurryCreature (593017) | about 3 years ago | (#36621286)

This has nothing to do with the tax then does it? If you can't buy it at X then how much tax Y charges doesn't really matter anymore.

Also, might the unfair tax advantage of amazon have made it impossible for the local shops to compete? So if Amazon did NOT have its unfair tax advantage, you would still have a choice. But no, you saved a penny or two and now you got no choice.

Free market, I see you do work, I just don't like your results.

Re:And what does this have to with taxes? (2)

WhirlwindMonk (1975382) | about 3 years ago | (#36621448)

Also, might the unfair tax advantage of amazon have made it impossible for the local shops to compete? So if Amazon did NOT have its unfair tax advantage, you would still have a choice. But no, you saved a penny or two and now you got no choice.

Even pre-tax, Amazon is often much less than local retailers. $10 (Amazon now) $10 + 6% tax (Amazon with tax) $15 + 6% tax (Local store now). Somehow I don't think tax law is what's giving them their pricing edge.

Re:And what does this have to with taxes? (2, Insightful)

Tsingi (870990) | about 3 years ago | (#36621456)

This thread was a logical progression.

Yes, you save money with big corporations at the expense of small business. This is the trend and it takes money out of your pocket and your community. In the long run it costs you more, when the competition is gone, the price will go up.

Re:And what does this have to with taxes? (2)

DrgnDancer (137700) | about 3 years ago | (#36621846)

Sadly at this point it's all but impossible, outside of major metro areas, to find a decent local book store anymore. Huntsville is a mid-sized metro with a very high population of educated customer (lots of engineers and scientists per capita here), but we still don't have any that I am aware of. A few used book stores, a couple of "Christian" book stores; but for new general purpose books you have to go to B&N or BAM. I still try to go to the brick and mortar super stores, on the theory that they do at least employ people and while retail is retail, these aren't *awful* jobs.

B&N kind of cut their own throat to an extent there though. They finally convinced me to buy a Nook. Now the brick and mortar store is more like a showroom for me. I go in, wander about till I find the book I like, verify it's available as an e-book, and use their wifi to buy it. Barnes and Noble is still getting my money, but the local store is not. I worry a bit about that. I'd hate to have the store close, I still find the best way to find a book to be browsing in a physical store.

Re:Great way to cut down on the affiliate link spa (5, Insightful)

tomhudson (43916) | about 3 years ago | (#36621292)

And maybe the reason that those local stores closed down was from unfair competition - companies like Amazon that didn't have to charge sales taxes. The local store provided local jobs, and paid taxes that supported your schools and your police and your fire protection and your clinics. Amazon doesn't.

Keep in mind that you're still supposed to pay the equivalent "use tax", so any savings were a lot less, unless you're a tax cheat. The vast majority of people, given the opportunity, proved to be tax cheats, which was no surprise.

All California is doing is saying "if you want to compete, compete on an even footing, and don't enable tax cheats." Is it a cash grab? Look around - state governments everywhere need the cash. Which is better - that Amazon be forced to compete fairly, or that you pay for a state bail-out?

Re:Great way to cut down on the affiliate link spa (4, Insightful)

CRCulver (715279) | about 3 years ago | (#36621390)

Competition between out-of-state retailers and local business is not some new thing that arose with the internet. The Sears catalogue did the same thing in the 19th century and local businesses still survived. That there shall not be tariffs on commerce between states is a cornerstone of our nation. Do you want to junk it?

Re:Great way to cut down on the affiliate link spa (5, Insightful)

tomhudson (43916) | about 3 years ago | (#36621488)

That there shall not be tariffs on commerce between states is a cornerstone of our nation.

Pretty weak cornerstone to base a nation on. Also, the tax is not on interstate commerce - the goods are free to travel through the state without accruing tax liability. It's only when they find their way into the hands of an end user that they are liable to the sales tax, or the equivalent state use tax. If you can show that sales taxes, levied by the state against the local individual, as opposed to being levied by the state against the vendor, are unconstitutional, you'd have a point.

Just as important, it's not interstate commerce when you have a business presence in-state. The affiliates ARE that presence - affiliates are, after all, affiliated with Amazon, that's why they're called affiliates, duh!!! They're paid by Amazon, not some 3rd party. They're no different than having a commission sales rep working the state, because that's what they are, commission sales reps.

Re:Great way to cut down on the affiliate link spa (3, Insightful)

CRCulver (715279) | about 3 years ago | (#36621596)

Pretty weak cornerstone to base a nation on.

I'd recommend reading the debates around the writing of the Constitution (Signet Classics has published many of the relevant texts). Free commerce between states is vital for keeping the nation unified.

It's only when they find their way into the hands of an end user that they are liable to the sales tax, or the equivalent state use tax.

Use taxes are a fairly recent innovation that seeks to get around the longstanding tradition of no taxes on out-of-state purchases. They are a perversion of the law.

Just as important, it's not interstate commerce when you have a business presence in-state. The affiliates ARE that presence

I don't dispute that. But usually when the question of Amazon and taxes comes up, some on Slashdot post as if, regardless of presence, Amazon is doing wrong. They are doing nothing different from the long, accepted mail order tradition.

Re:Great way to cut down on the affiliate link spa (1)

chemicaldave (1776600) | about 3 years ago | (#36621270)

You're forgetting the fact that most big-box retailers don't have nearly the same inventory as Amazon and other online retailers. Some products -- like new turntables as I recently found out -- are impossible to buy in a brick and mortar store unless you live in a large metropolitan area because local stores simply do not carry a wide selection.

Re:Great way to cut down on the affiliate link spa (-1)

Anonymous Coward | about 3 years ago | (#36621430)

Bingo! Plus, why buy it at a brick-and-mortar store and listen to some pimple-faced punk try to tell me about how X is better than Y because X has more kinds of hookup ports, or try to upsell me with some stupid extended warranty? I'd much rather sit at home with a beer and read actual user reviews of X and Y on Amazon's website. Brick and Mortar stores did this to themselves when they refused to provide me with what I wanted: a comfortable, non-annoying shopping experience. Plus, anyone who's ever been to Best Buy knows that it's HARDLY the Best Buy. Only people who don't know any better shop there. There isn't much except fresh produce and gasoline that I want that can't be had at Amazon.com or Newegg.com. Why buy a big screen TV at Best Buy and go to the effort of borrowing a friend's truck to get it home, when I can have it delivered tax-and-shipping-free to my door in under a week? I can't remember the last time I actually walked into a store and bought a CD or DVD. That kind of media is just becoming irrelevant for all except the lower class and technological laggards. It sounds to me like the big box retailers are just whining because they haven't been able to keep their business model from becoming obsolete.

Re:Great way to cut down on the affiliate link spa (5, Interesting)

Anonymous Coward | about 3 years ago | (#36621402)

In Europe there are sales taxes in all countries and Amazon's local operations are able to work within the system. This is just a side effect of the US states not working together as one entity. It's very short termist and selfish on both sides.

Re:Great way to cut down on the affiliate link spa (2)

sa666_666 (924613) | about 3 years ago | (#36621574)

This is true for Canada as well. Sales tax for the appropriate province is applied at checkout, and everything seems to work out fine. And it still ends up being way cheaper to order from Amazon (and I say this from a province with a 13% sales tax).

Re:Great way to cut down on the affiliate link spa (0)

intheshelter (906917) | about 3 years ago | (#36621624)

I would say it's more greed on Amazon's part. They know they can strong arm with tactics like this and buy legislators so that is the approach they will take here in the states.

Re:Great way to cut down on the affiliate link spa (2)

bryanp (160522) | about 3 years ago | (#36621526)

Except it won't be the same price at both locations because a B&M store still has to pay rent, utilities, pay their cashiers etc... Having a physical presence in a community costs more than a web site and drop shipping from a warehouse in BFE.

Re:Great way to cut down on the affiliate link spa (1)

TheRaven64 (641858) | about 3 years ago | (#36621864)

There's an Amazon warehouse just outside the city here (although, strangely, I've never had anything shipped from it, things I order always seem to come from the other end of the country). When you go past, you really see the scale of their operation. Their warehouse is much larger than any local shops and almost as big as the out-of-town shopping centre, and it doesn't contain all of their inventory.

Remember the old dot-com joke, that Amazon made a loss on every sale, but made up for it in volume? It worked. They now shift so much that they can maintain the prices that they introduced as loss-leaders to get market share, only now their overheads are so low per item that they can undercut most other places. They can easily undercut companies that have to have physical store space for customers to walk around.

Re:Great way to cut down on the affiliate link spa (5, Interesting)

Todd Knarr (15451) | about 3 years ago | (#36621302)

Because things get insanely hairy. For instance, what is the tax rate for an affiliate in California? There isn't a single rate for the state, it varies by location. Besides the state tax you've got county and/or city taxes plus the occasional special tax district. And no you can't go just by ZIP code, because we've got plenty of ZIP codes that span multiple tax jurisdictions with different tax rates. And the state doesn't provide Amazon with any way to get an authoritative (as in "If you charge the rate we give you, you can't be legally touched if it turns out it was the wrong rate.") answer to the question of what the tax rate is for a given affiliate address.

And that's just California taxes. What happens when the affiliate is in California, the buyer is in Texas where Amazon has a warehouse and thus a physical presence, and both states claim sales tax is due? Does Amazon charge taxes for both states on the same sale? Or if Amazon only charges taxes for one state, what happens when the other sues for failure to collect taxes due under it's laws?

The states want to have these taxes collected, but they don't want to answer the hard questions about the actual implementation: what are the rules for which jurisdiction applies, and how is the merchant told what rates apply to any given transaction? Until the states are willing to address those questions, IMO actions like California's are simply unfair.

Re:Great way to cut down on the affiliate link spa (3, Insightful)

Loiosh-de-Taltos (247549) | about 3 years ago | (#36621404)

The Supreme Court already made their stance on the exact Affiliate issue known: http://en.wikipedia.org/wiki/Quill_Corp._v._North_Dakota [wikipedia.org]

"Quill Corp. v. North Dakota, 504 U.S. 298 (1992) is a Supreme Court ruling concerning use tax. Quill Corporation is an office supply retailer. Quill had no physical presence in North Dakota (neither a sales force, nor a retail outlet), however it did have a licensed computer software program that some of its North Dakota customers used to check Quill's current inventories and place orders directly. North Dakota attempted to impose a use tax on Quill, which was struck down by the Supreme Court."

Re:Great way to cut down on the affiliate link spa (0, Troll)

tomhudson (43916) | about 3 years ago | (#36621408)

Funny how Amazon "can't figure this out" with all their resources, but the local mom and pop nails it with few problems.

Maybe Amazon should resort to their "Mechanical Turk". It would be a better use than the 40% of all Mechanical Turk jobs that are devoted to spamming. [blogspot.com]

Or maybe they can go to the cloud! "Yay, cloud!" :-(

The truth: Amazon could figure it out - they just can't be bothered. They WANT to drop their affiliates, since they no longer need them to "get the Amazon name out." If you're an Amazon affiliate, your days are numbered - Amazon just wants to be able to blame someone else when they dump you.

Re:Great way to cut down on the affiliate link spa (5, Insightful)

CptNerd (455084) | about 3 years ago | (#36621544)

Considering that the "local mom&pop" only has to worry about the one rate that they are responsible for, it's not surprising they can keep track of it.

Apples and orchards.

Tax Distraction (-1, Troll)

crow_t_robot (528562) | about 3 years ago | (#36621120)

The tax battle is such a distraction from the real problem: Defense spending.

While the news is baiting the general populace into a fury by arguing about one group raising taxes or one group lowering taxes our government is funneling the GDP of world empires into useless defense spending.

Sorry to interrupt but you can now go back to bickering about the bikeshed.

Re:Tax Distraction (-1)

Anonymous Coward | about 3 years ago | (#36621150)

Typical idiot I've come to expect here. Did you know most people in this country don't pay taxes, and it's not the rich that you all hate so much.

Re:Tax Distraction (-1)

Anonymous Coward | about 3 years ago | (#36621322)

Typical teabagger I've come to expect... well... nowhere where sane people congregate. I guess those evil mooching non-rich have found a way to dodge sales taxes, gas taxes, etc.

Re:Tax Distraction (0)

Anonymous Coward | about 3 years ago | (#36621616)

The "how DARE you keep what you want to earn" is the modern day equivalent to the "how DARE you want to be free" mentality of the slavery days. It's just more subtle and widespread than it was 150 years ago.

I bet next you're going to tell us how we are all born into a "social contract" that we never agreed to and have no recourse against, right? Or that we all owe our success to society for letting us be free, because we couldn't have possible earned our success ourselves and freedom is a gift benevolently bestowed upon us by society and not self-evident, right?

It's really convenient how keeping what *you* earn isn't a civil right, but keeping what *other* people earn is...

Re:Tax Distraction (2)

CRCulver (715279) | about 3 years ago | (#36621690)

I bet next you're going to tell us how we are all born into a "social contract" that we never agreed to and have no recourse against, right?

You can always emigrate. Read Plato's Crito for a classical argument about recourse to the social contract (one the American founding fathers were well aware of).

freedom is a gift benevolently bestowed upon us by society and not self-evident, right?

Natural rights theory traditionally relies on a belief in a higher power who endows human beings with some rights regardless of what the community says. Theism isn't too popular these days, especially on Slashdot. Once you recognize there's no convincing proof of God for the people around you, the only defensible forms of political theory are the various brands of utilitarianism: you have these freedoms, because the community in general gets on better if you have them, not because they are somehow innate.

Re:Tax Distraction (0)

Anonymous Coward | about 3 years ago | (#36621172)

Yeah that 20-25% in defense spending is really out of control compared to the >50% (and growing) in entitlement spending, watch out!

Re:Tax Distraction (2)

MichaelSmith (789609) | about 3 years ago | (#36621246)

Yeah that 20-25% in defense spending is really out of control compared to the >50% (and growing) in entitlement spending, watch out!

The "entitlement spending" as you put it at least goes back into the US economy. "Defence" spending goes to chew up the top 10cm of Afghanistan.

Re:Tax Distraction (0)

Anonymous Coward | about 3 years ago | (#36621300)

No, moron. The entitlement spending goes straight to China. Ever seen a fat, system-gaming woman in the Wal-Mart line with her 10 children all had by different fathers and wonder how she has enough money to buy 50 pairs of No-Bo underwear for each one? At least in the defense industry, the country is keeping American technical jobs and some manufacturing on American soil. I'm pretty sure that those bombs used to turn Afghanistan and soon Pakistan (sigh) to glass were made here in the "good ol' U.S.A."

Re:Tax Distraction (0)

Anonymous Coward | about 3 years ago | (#36621304)

Riiiiiiight, because companies like Boeing, Northrup, General Dynamics, etc, etc, don't employ anyone in the US.

Exactly where do you think that money would go if Uncle Sam didn't take it from people in the US to begin with?

Re:Tax Distraction (0)

Anonymous Coward | about 3 years ago | (#36621320)

"The "entitlement spending" as you put it at least goes back into the US economy."

Yeah. I'll pay you $50 to clean my pool, and you pay me $50 for me to clean your pool. Instead of doing something useful, the net effect of entitlements is zero. Or, at least it would be zero if there were no sociological effects of receiving entitlements as a way of life instead of how it was intended: as temporary assistance. But the fact is that approximately 50% of the population of the US pays no income taxes. Have you ever dealt with a person who has made living on the public dole a way of life? I have. Their sense of pride, their work ethic, and their ability to reason is completely destroyed. Perhaps this was the intent of LBJ's Great Society all along. It certainly makes these people easier to manipulate if they can't stand on their own 2 feet.

Re:Tax Distraction (1)

ZaMoose (24734) | about 3 years ago | (#36621532)

Are you at all familiar with the defense procurement process? Do you *REALIZE* the regulations you have to comply with in order to even source parts from a foreign entity? "Export controls" are a *HUGE* headache for anyone in the DoD's procurement chain, such that the vast, VAST majority of Defense dollars stay States-side.

In fact, the net effect is such that it entirely negates your point: dollars spent on munitions manufactured by US firms are deployed in theater and used for creative destruction far from our shores. Would you rather we started carpet bombing Chicago instead?

Re:Tax Distraction (3, Insightful)

radl33t (900691) | about 3 years ago | (#36621702)

no, let's start with texas and then sweep through the south. It does not negate his point: Munitions are valuable good and they are created here with our scarce resources and end up as heaping piles of rubble over there. There is a massive opportunity cost of not using these resources for building ourselves up rather than tearing someone down. Creative destruction abroad is wasteful compared to domestic investment, unless your playing some Machiavellian game whereupon foreign aggression is actually indirectly benefiting the economy. In any event, any such plan would rely on pure conjecture and a healthy dose of negligence with regard to history.

Re:Tax Distraction (3, Insightful)

mc6809e (214243) | about 3 years ago | (#36621356)

Yeah that 20-25% in defense spending is really out of control compared to the >50% (and growing) in entitlement spending, watch out!

The only difference between military spending and entitlement spending is that you have to blow things up to get your free medical, free food, free housing, and free childcare.

Re:Tax Distraction (5, Informative)

Sparrow1492 (1962256) | about 3 years ago | (#36621432)

Do you even read what you're typing? At least try and get the facts correct. Free medical has not been that for a long time, with the exception of the unmarried troop on active duty using a military treatment facility. Troops have to pay for family dental for example and once you leave active duty you have to pay for your medical care too. Prescriptions outside the basics genrally have to be ordered by mail for a copay. Free food and housing are not that. There are allowances for these things, but they are based on a standard of living from 40 years ago as to what size place yu might need and never covers all the bills. Child care has never been free.

Re:Tax Distraction (1)

inode_buddha (576844) | about 3 years ago | (#36621504)

It's been that way for civilians too. Ever notice how the poverty line was determined from 1950's figures?

Re:Tax Distraction (0)

LoyalOpposition (168041) | about 3 years ago | (#36621368)

the real problem: Defense spending

I love being able to give people new information! As it turns out, California doesn't have their own army. They also don't have their own navy, air force, or marines. In fact, California's percentage of defense spending as a fraction of their total budget is very nearly zero percent.

~Loyal

Re:Tax Distraction (0)

Anonymous Coward | about 3 years ago | (#36621426)

You're an idiot. He does not mean California's defense spending, he means Defense spending in general. As usual, your "new information!" is useless.

Re:Tax Distraction (1)

radl33t (900691) | about 3 years ago | (#36621720)

California props up the federal government and the defense budget by paying out more than it receives.

Re:Tax Distraction (0)

hal2814 (725639) | about 3 years ago | (#36621388)

How much do you suppose the state of California spends on defense? I agree as a nation we spend too much on defense, but I'm not sure what sales tax collection in California has to do with it.

Re:Tax Distraction (-1)

Anonymous Coward | about 3 years ago | (#36621420)

Wait... uh California has defense spending?

Also it is not just defense spending that needs to decrease. Currently the US has about 56 trillion in outstanding obligations. The 'debt' of 14 trillion is just short term debt. Meaning they can not even meet the obligations so they borrow the money to make it. 3.6 trillion this year alone. They are arguing about 1-2 trillion over 10 years. They need more along the lines of 14-15 trillion over the next 10 years. That is just 'even'. Defense spending is about 1/3-1/2 of the total budget. It is a good place to start. But not everything can happen just there. The other 1/3-1/2 is entitlement spending. Which is set to explode due to previous laws and obligations.

Why are Libs so enamored with taxes? (2, Insightful)

Anonymous Coward | about 3 years ago | (#36621176)

Good one, Governor Moonbeam! You just killed the revenue stream of roughly 25k Amazon affiliates. So instead of just being content with the revenue collected from the income tax of those affiliates, you decide to double-dip and tax not only the income earned by the affiliate but the transaction as well. Instead of allowing you to double-dip, Amazon pulls the plug on their affiliate program in CA and your projected $200+M tax revenue increase goes up in smoke. CA is a turd circling the drain. They might as well give up and become part of Mexico already.

I just want to know why it is that when times are tough everyone except the government is expected to make due with less. Why don't politicians have to share in the hardship? Why don't liberals seem to understand that imposing a tax has a net effect of reducing economic activity? Why would you want to reduce economic activity when we're still in the midst of the worst recession in 2 generations?

Re:Why are Libs so enamored with taxes? (5, Insightful)

tomhudson (43916) | about 3 years ago | (#36621328)

How many of those 25k affiliates "forgot" to include their affiliate income? How many others were so insubstantial that no income tax was owing?

It's the same problem with ebay, and the crack-down is inevitable. Let them compete on an equal footing with the locals, and each will win their fair market share based on price, product, and service.

Instead, local business is indirectly subsidizing Amazon by carrying a disproportionate share of the tax burden.

Re:Why are Libs so enamored with taxes? (0)

Anonymous Coward | about 3 years ago | (#36621452)

tomhudson,

Thanks for your comment. I hadn't considered that angle before.

Re:Why are Libs so enamored with taxes? (1, Insightful)

tomhudson (43916) | about 3 years ago | (#36621598)

You're welcome. However, I think that the REAL story here, and the one everyone is missing, is that in reality, Amazon is just looking for any excuse to dump their affiliates without having to take the bad publicity. After all, unlike back in the '90s, Amazon now has a big enough market presence that they don't need to cough up a commission to an affiliate to get the sales.

In reality the headline should be "Amazon dumps affiliates to lowers costs, increase profitability, state takes blame.", because that's what just happened, and they'll do it at every opportunity while pretending to bemoan the whole thing.

Will Bezos now patent the "invention and method for cutting out affiliates"?

Re:Why are Libs so enamored with taxes? (5, Interesting)

Chaos Incarnate (772793) | about 3 years ago | (#36621520)

What tax burden is Amazon imposing on the state? They're not using any land in the state, they're not using any services that they aren't already paying for (the postage pays for the gas taxes that pay for the road use by the delivery company's vehicles) The state wants money without doing anything in exchange for it.

Re:Why are Libs so enamored with taxes? (3, Interesting)

mc6809e (214243) | about 3 years ago | (#36621774)

What tax burden is Amazon imposing on the state? They're not using any land in the state, they're not using any services that they aren't already paying for (the postage pays for the gas taxes that pay for the road use by the delivery company's vehicles) The state wants money without doing anything in exchange for it.

We're way past that.

Taxes are collected from those that make money to be given to those that do not.

You got it. They want it. You run away if you can. If you can't escape, tough. That's all you need to understand about taxation today.

Re:Why are Libs so enamored with taxes? (1)

msauve (701917) | about 3 years ago | (#36621780)

The state sales tax is paid by state residents, and used for their benefit. Amazon is merely being asked to be responsible for collecting it. It's a matter of efficiency and effectiveness. How many CA residents report purchases which weren't taxed, and pay those taxes when filing?

Retailers engaged in business in this state ... collect the tax from the purchaser and give the purchaser a receipt therefor.

- CA Article 17. Payment and Collection of Use Tax Regulation 1684

In general, if you purchase equipment or merchandise from an out-of-state retailer without paying California tax and use the property for a purpose other than for resale, the purchase is subject to use tax and must be reported

-http://www.boe.ca.gov/sutax/faqreturn.htm

Re:Why are Libs so enamored with taxes? (0)

Anonymous Coward | about 3 years ago | (#36621576)

It still wouldn't be an equal footing. Sales tax has a negligible impact on my online purchases. It's more of a hassle for the companies that have to collect it than for me to pay it. If states were smarter, they would pass a single state wide 'internet' sales tax rate, or the federal government (in a good use of the commerce clause) would pass a nationwide internet sales tax rate which could be redistributed to the states. Make it easy for Amazon to comply and they likely would or at the least wouldn't have a leg to stand on claiming an undue burden.

As a random example, the book Good Eats: The Early Years. As of the time I'm posting, the list price is $37.50 and its on Amazon for $21.38 or 43% off. If I went into the local book store, it would cost me $37.50 plus 7.5% tax for a total of $40.31. Even if Amazon charged tax, the total would be $22.98 or still roughly 43% off what I would pay in the store. Even if the brick and mortars didn't have to collect sales tax and Amazon did, it would still be ~ 38% cheaper to buy from Amazon. Sales tax isn't a competitive advantage. It's pass through, neither B&M nor Amazon derive a direct benefit from collecting.

Brick and Mortar still can't compete because of Amazon's economy of scale and the lack of traditional brick and mortar costs. Personally, lack of sales tax really isn't why I purchase online, its convenience and a substantially lower price, which I'm sure would be echoed by most people.

Re:Why are Libs so enamored with taxes? (4, Insightful)

bdsesq (515351) | about 3 years ago | (#36621778)

How many of those 25k affiliates "forgot" to include their affiliate income?.......

So anyone who has a different opinion from yours is a law breaker?
Or is that what you do when you think you can get away with it?

Amazon's position has been tested all the way to the Supreme Court.
Amazon is in the right and CA is trying to do something the Constitution prohibits.
Nuff Said!

Re:Why are Libs so enamored with taxes? (5, Insightful)

cyber-vandal (148830) | about 3 years ago | (#36621340)

Because liberals realise that the things we take for granted have to be paid for by someone. They also realise that Amazon affiliates have a state-granted advantage over local brick and mortar businesses and has decided to remove that advantage. What is it with righties and their belief that they shouldn't have to pay anything towards the wonderful developed world lifestyle they enjoy?

Re:Why are Libs so enamored with taxes? (1)

Anonymous Coward | about 3 years ago | (#36621410)

Simple greed.

They hide behind words like freedom and liberty, but really it's just plain old "I got mine, fuck everyone else."

Re:Why are Libs so enamored with taxes? (0)

Muad'Dave (255648) | about 3 years ago | (#36621412)

Because liberals realise that the things we take for granted have to be paid for by someone.

It is because those things were handed to you gratis by the government that you take them for granted.

Re:Why are Libs so enamored with taxes? (4, Insightful)

cyber-vandal (148830) | about 3 years ago | (#36621604)

No they weren't I had to pay a fairly significant percentage of my income for them. Everyone takes things like roads, street lighting and not being invaded by foreign armies for granted. Doesn't mean they magically pay for themselves.

Re:Why are Libs so enamored with taxes? (0)

Anonymous Coward | about 3 years ago | (#36621414)

Don't you dare tax me for my socialized roads! The free market pays for them, do you hear me? THE FREE MARKET!

Re:Why are Libs so enamored with taxes? (-1)

Anonymous Coward | about 3 years ago | (#36621754)

"Because liberals realise that the things we take for granted have to be paid for by someone."

That about sums up Liberalism, doesn't it? "Give me YOUR money so I can have what I want! It's MY GODDAMNED RIGHT!!! What's that, you say? Get a job? Help! Racism! RAAAAAACIIIISSSSMMMMMM!!!!!!!!"

Re:Why are Libs so enamored with taxes? (3, Interesting)

zraider (759486) | about 3 years ago | (#36621840)

Because it's not the government that provides us with that "wonderful developer world lifestyle". It's private enterprise like Amazon.

Re:Why are Libs so enamored with taxes? (1)

jpapon (1877296) | about 3 years ago | (#36621480)

How does imposing a tax have a net effect of reducing economic activity? Do you think the money that is taxed leaves the economy?

Look at it this way; the U.S. government currently runs a deficit, so for every dollar it receives in revenue, it spends more then a dollar. In other words, taxation acts as a multiplier, since the government spends all (and more) of the revenue it takes in.

Besides that, taxes are necessary to provide services that the private sector cannot provide well for various reasons; healthcare (lack of ability for consumers to choose when faced with death or buy it), education (children cannot pay for their own education), roads (not profitable), municipal services (not practical to give users choice, cost of entry too high), etc etc...

Then there's the even worse trend of privatizing things, only to keep paying for them with government funds, as is the case with prisons. So great, now you have a company running your prison, but the government is still paying 80% of what they were before, and now they have no control over where that money goes. So the wages of the prison guards drop, and the wages of the prison-company CEOs go up. Hooray! The American system works!

Re:Why are Libs so enamored with taxes? (0)

Anonymous Coward | about 3 years ago | (#36621586)

Congratulations! You win the award for the most simplistic, most boneheaded explanation of why taxation is good. Who taught you this; your middle school civics teacher?

Re:Why are Libs so enamored with taxes? (0)

Anonymous Coward | about 3 years ago | (#36621626)

How does imposing a tax have a net effect of reducing economic activity? Do you think the money that is taxed leaves the economy?

Look at it this way; the U.S. government currently runs a deficit, so for every dollar it receives in revenue, it spends more then a dollar. In other words, taxation acts as a multiplier, since the government spends all (and more) of the revenue it takes in.

say the multiplier is 2, for every dollar the gov takes in it spends 2. by that logic the only way to get rid of the deficit is to get rid of the government. gg.

Re:Why are Libs so enamored with taxes? (2)

Calos (2281322) | about 3 years ago | (#36621696)

To your first paragraph: the (faulty) assumption you're making is that moved around in private industry is the same as moved around by the government - that we shouldn't care what the is being spent on or to whom it goes to. This obviously isn't true; most people would rather it in a program like Amazon's than the defense contractors. Also, your analogy is terrible. Look at it this way: if the government taxes less, then they overspend by a larger percent, increasing the multiplier! Free money that no one will ever be accountable for! Genius!

To your second paragraph: with the exception of healthcare, all those things you list have been in place for about 100 years, and yet we've not had the states going bankrupt or the federal debt so ridiculously high. I don't think (most) people are going to argue against the use of these things, save healthcare, so this is just a red herring - especially because there are fees and taxes to these things based directly on use. There's obviously more going on here.

To your third paragraph: and now you've completely lost me. No, privatizing everything isn't good; but managed effectively, there are a lot of areas where it can do a lot of good. You (fail to) cite an example where it may have gone poorly, but you gloss over details and make it out to be the business's fault. Not saying it's not, but where's the accountability for the government, making such a poor decision? Who's to say the business didn't have friends in the government?

Re:Why are Libs so enamored with taxes? (1)

intheshelter (906917) | about 3 years ago | (#36621712)

I honestly hope this was an attempt to make a joke. If you really believe this you need to wake up and get educated FAST!

Re:Why are Libs so enamored with taxes? (0)

Anonymous Coward | about 3 years ago | (#36621722)

You have just fallen victim to the parable of the broken window:
http://en.wikipedia.org/wiki/Parable_of_the_broken_window

No taxed money doesn't leave the economy, it is redistributed (i.e. moved). The money becomes unavailable to the earner for his use and available to government. Some services must be provided by government (i.e. Public Safety , Military). Beyond that, the question should be - who is more efficient at making economic choices - private enterprises and individuals or government?

Re:Why are Libs so enamored with taxes? (-1)

Anonymous Coward | about 3 years ago | (#36621806)

Name one thing that the private sector can not provide better than the government, if it is allowed to provide it without governmental involvement. Please do not quote something you have heard from the media without proof to back it up i.e healthcare and education.

Dear conservative: Government is not a person (5, Insightful)

Anonymous Coward | about 3 years ago | (#36621564)

I just want to know why it is that when times are tough everyone except the government is expected to make due with less. Why don't politicians have to share in the hardship?

If you think that social security is too large, say that you think that the poor should make due with less. If you think that military spending is too large, say that you think we should bring the troops home. If you think that we spend too much on public infrastructure, say that the government should spend less money building roads, etc... All of those are valid views. However, realize that in none of those cases it isn't the government whose life is affected as government isn't any single entity separate from the people, neither does the government have feelings or a soul.

There is no such thing as attacking "government spending" even though certain people would like to make government appear as a faceless opponent that takes money away from the hard working people and burns it. When you say that government should do with less, you should specify which of the services that the government provides for people should be cut. When you speak about government as it would be a separate entity with goals, motivations, feelings, ability to make sacrifices, etc. I get the same feeling I get when I hear a paranoid person talking about "them". It doesn't make any sense as there isn't such a creature called "government" any more than there is "them". There is just a list of services that the democratic society has decided to provide to the people, the employees needed to provide them and the taxes that have democratically been set in order to provide those services. That being the case, attack the services, not the government.

Re:Why are Libs so enamored with taxes? (0)

intheshelter (906917) | about 3 years ago | (#36621694)

While I won't argue the double dipping part of your argument, they definitely tax about ten times over on the same money, I think it's a bit blind to just blame the governor for killing the revenue stream. He should be cutting spending (which would start an even more vile flame war against him), but Amazon is the one killing the revenue stream. They could comply with the law short term and challenge it if they want to, but they are trying bully tactics.

In the end they are all scum, government, big corporate business. About the only people I feel bad for are the affiliates.

Libs Don't Think Dynamically About Economics (1, Insightful)

geoffrobinson (109879) | about 3 years ago | (#36621724)

As a general rule, I find that conservatives and libertarians tend to think about consequences to tax policy, regulation, etc. If I take away money from person X, he'll have less money to save and spend. How will that impact the economy? If I put a regulation on the company, how will they respond to the increased cost? Will it outweigh the benefit of the regulation?

Liberals don't tend to think like this as much as far as I can tell from their reasoning.

Re:Why are Libs so enamored with taxes? (2)

polarsd (1329425) | about 3 years ago | (#36621728)

Well, isn't the obligation and responsibility of every CA citizen to pay a "Use Tax" (which equates to the Sales Tax) on items that they don't pay sales tax on and use in CA? So, what's the problem, Gerry Brown? Don't trust your own citizens to pay their taxes?

Re:Why are Libs so enamored with taxes? (5, Insightful)

chemicaldave (1776600) | about 3 years ago | (#36621826)

Why don't liberals seem to understand that imposing a tax has a net effect of reducing economic activity?

Because that's a falsehood repeated over and over by the right-wing. There is a mountain of historical data that shows a correlation between high tax rates and GDP growth. Just google "historical tax rates vs GDP growth" The results may surprise you. Increasing taxes on big business actually increases economic activity because you force people to reinvest in their business as opposed to just pocketing the money as income. Yes, unemployment is very high, but that hasn't stopped businesses from being profitable. If the economy is so bad, why are stock indexes back to prerecession levels? The Dow-Jones average is back to where it was at the beginning of 2007. NASDAQ has rebounded as well. S&P500 is back up.

When times are tough, the government does expect "everyone" to make due with less, they expect those can afford to, to make due with less.

California knew what would happen... (1)

Anonymous Coward | about 3 years ago | (#36621194)

Colorado did the same thing a couple years ago, and Amazon responded the same way.

Good on Amazon.

Losing Battle (1)

cgfsd (1238866) | about 3 years ago | (#36621334)

Amazon is fighting the good fight, but it is a losing battle.
With states hurting for tax dollars, online retailers are being targeted as a source of income for the states.

The days of tax free internet orders is coming to an end.

I do have sympathy for online retailers, if there was a simple tax rate for each state, it would not be so bad, but each county, each city, certain merchandise all have different tax rates. What a accounting nightmare to keep up with. Every time you turn around another city council is passing another tax on something, having to keep up with would be next to impossible.

Re:Losing Battle (1)

nitehawk214 (222219) | about 3 years ago | (#36621458)

Amazon is fighting the good fight, but it is a losing battle.
With states hurting for tax dollars, online retailers are being targeted as a source of income for the states.

The days of tax free internet orders is coming to an end.

I do have sympathy for online retailers, if there was a simple tax rate for each state, it would not be so bad, but each county, each city, certain merchandise all have different tax rates. What a accounting nightmare to keep up with. Every time you turn around another city council is passing another tax on something, having to keep up with would be next to impossible.

So the companies will move overseas. There is only so much money to go around, and the companies are going to do everything they can to hold on to it.

Re:Losing Battle (0)

Anonymous Coward | about 3 years ago | (#36621556)

I don't think it's about holding on to money. It's a technical and logistics nightmare to collect and distribute all of those taxes.

Re:Losing Battle (0)

Anonymous Coward | about 3 years ago | (#36621734)

You must not have had the pleasure of dealing with customs, tariffs, ITAR, and harmonized codes...plus shipping costs.

Re:Losing Battle (0)

Anonymous Coward | about 3 years ago | (#36621510)

I do have sympathy for online retailers, if there was a simple tax rate for each state, it would not be so bad, but each county, each city, certain merchandise all have different tax rates. What a accounting nightmare to keep up with. Every time you turn around another city council is passing another tax on something, having to keep up with would be next to impossible.

Not quite. While it does seem daunting, there are several companies that specialize in keeping track of it and providing software/tables to make computing it easy.

All a game (4, Insightful)

inthealpine (1337881) | about 3 years ago | (#36621370)

This is all a game between companies and the government (state and federal). CA has no money because they are stupid and elect individuals who spend it faster than it can be earned. The idea CA has is to tap revenue from outside the state, which is of course illegal since CA is not our central government.
The federal government is playing the same games since they are out of money (which is funny when you think that they are the ones with a printing press), but that's why you see Obama saying bad things about ATMs and Jets my guess being that ATMs and jets don't pay taxes.

All of this comes down to one thing, spending. Assuming you are not checking your bank account to see if your SS check was direct deposited into your checking account, the US will be at 200% GDP vs debt in our lifetime. That means that if every single American got a second full time job and paid all money from both jobs to the government then we could pay for our spending. As it stand now if we took all the money, 100%, from the top earners in the US FOREVER we still would never pay our debt off at the rate our spending is increasing.
Spending. Spending. Spending. Until we realize spending is the problem, the problems will continue.

Re:All a game (0)

Anonymous Coward | about 3 years ago | (#36621568)

The US is not even at 100% GDP vs. Debt.

200% GDP vs. Debt means you would need 200% GDP to pay off the debt...in a year. 200% GDP deficit is what you're talking about, which is not really going to happen. Here's a chart of debt vs. GDP over time: http://www.usgovernmentspending.com/include/us_deficit_full.png

You'll notice we're currently right around 5%.

Re:All a game (1)

inthealpine (1337881) | about 3 years ago | (#36621650)

CBO: Under the alternative fiscal scenario, by contrast, expiring tax provisions in the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) would be extended, and the AMT would be indexed to inflation. As a result, revenues would grow only slightly faster than the economy, equaling 22 percent of GDP by 2080. Slowly growing revenues combined with sharply rising expenditures would create an explosive fiscal situation. Under the spending and revenue policies incorporated in this scenario, federal debt would surpass 100 percent of GDP in 2023 and exceed 200 percent of GDP by the late 2030s.

http://www.cbo.gov/ftpdocs/104xx/doc10455/Long-TermOutlook_Testimony.1.1.shtm [cbo.gov]

Re:All a game (2)

radl33t (900691) | about 3 years ago | (#36621752)

*Neglecting 30 years of revenue cuts, of course.

Tax Principle #1: Minimized Disruptive Impact (2)

transami (202700) | about 3 years ago | (#36621490)

I've said it before and I'll say it AGAIN:

Tax the shipping companies and you wouldn't have all these problems!!!

Tell you what, politicians are terrible at looking "outside the box" for solutions.

Re:Tax Principle #1: Minimized Disruptive Impact (1)

Bacon Bits (926911) | about 3 years ago | (#36621578)

I've said it before and I'll say it AGAIN:

Tax the shipping companies and you wouldn't have all these problems!!!

So I send a package via USPS. Where's your tax revenue now?

Re:Tax Principle #1: Minimized Disruptive Impact (0)

Anonymous Coward | about 3 years ago | (#36621790)

using USPS is its own tax

Re:Tax Principle #1: Minimized Disruptive Impact (1)

Anonymous Coward | about 3 years ago | (#36621802)

That's more of a "the box" solution than an "outside the box solution", isn't it?

Just waiting for the backfire... (2)

rcrodgers (1233228) | about 3 years ago | (#36621540)

I don't know how long it's going to take, but I'm pretty positive that this will blow up in California's face. You can't fix a deficit that big by adding a new tax; you're just going to drive business and revenue out of the state. There was a moratorium on internet sales taxes for multiple reasons at the turn of the century, not the least of which was that it threatened business revenue. (Among the others were double taxation because multiple states might legally be able to tax any given order.) I guess states are getting desperate and stupid with the recession still going on...

The people this really hurts (0)

Anonymous Coward | about 3 years ago | (#36621622)

The people this really hurts are the affiliates who are no longer seeing revenue from Amazon.

I applaud Amazon (0)

Charliemopps (1157495) | about 3 years ago | (#36621638)

I know there will be a lot of flaming about Amazon not "paying their fair share" but the fact is, they aren't the ones that pay this... their customers are. Paying taxes is not our civic duty. It's not un-patriotic to feel the urge to keep your own damned money. There is a simple solution to Californians problem: stop spending so much.

Re:I applaud Amazon (1)

cyber-vandal (148830) | about 3 years ago | (#36621820)

That sounds reasonable. The government will be instead be presenting you with a bill for all the services you use which you will be able to pay with your own damned money. I often wonder about libertarians. Do you go to a restaurant and refuse to pay because you don't like the wallpaper?

will newegg have sales tax? (0)

Anonymous Coward | about 3 years ago | (#36621648)

Does this mean newegg will have to charge sales tax to those who live outside CA?

Smoke and Mirrors (2)

rogerdugans (902614) | about 3 years ago | (#36621664)

This comment section shows why our government has so many problems: citizens who blindly believe political rhetoric as fact and then continue to spout it and vote along lines which further the goals of the spin-doctors.
Examples:
50% of the people in the US pay no taxes and it isn't the rich.
Defense spending is where all the money goes.

Neither of the above is anywhere near the truth.

Every political entity has its own agenda and in a case like this one, so do businesses.
Amazon and the e-tailers have one: continue sales without tax to maintain the margin advantage.
Big brick and mortar stores (Walmart and such) have an agenda as well: to reduce e-tailer advertising in Cali because they are well aware that collecting state specific taxes for an e-tailer is not feasible. (Far too many variations in tax laws in the US.)

Customers will not see any direct changes: brick and mortar prices will remain what they are and e-tailer prices- and taxes- will also not change. The only losers will be those California residents who earn a portion of their income from advertising. They will not be getting paid by companies like Amazon anymore.

This is what I believe will actually happen, not spin, not an agenda. I don't live in California and the case has no direct bearing on me.

Discussing defense spending or the Teabag Party idea that half of the people in the US are not citizens is just muddying the waters and allowing politicians free reign to continue to mislead the public and treat us as idiots.

This is about sales tax people, and the fact that the Federal government needs to reform sales tax as it applies to internet vendors.
The vendors can NOT afford to deal with each and every tax code in the country- it is far too complex at this time, and if they comply with one out of state code they will have to comply with all of them.
However, local government does have the right to put their own codes in place- except where it conflicts with federal law.
A federal law that requires a common tax rate for the entire US, supercedes local code and applies to online vendors is needed.

As someone who purchases online as much as possible, I enjoy how often I am not taxed- but I recognize the need.

Now- discussing the issue at hand is what the founding fathers intended when this country began.
Dicussing other issues- defense spending, immigration, foreign wars- that is what the current political parties would prefer we do as a people. It keeps us from paying attention to what is really going on and lets them maintain the status quo.

Your choice folks.

Re:Smoke and Mirrors (1)

cyber-vandal (148830) | about 3 years ago | (#36621784)

Who is this 50%? The low-paid, the unemployed and prisoners? The solution to the first is to pay more, the second is similarly to make it more worthwhile to get a job and the third is similarly to make it more worthwhile to have a job than to be a criminal. These are not easy solutions but I'm not sure what else would get these people paying taxes rather than being a burden on the state. Shipping jobs to the Far East may give their citizens an economic boost but there is a downside which is largely ignored or sneered at.

Government on Taxes is like the Mob (1)

geoffrobinson (109879) | about 3 years ago | (#36621666)

If you explain to the Mob that you can't make your payment and instead of paying them what they want, you'd have to go out of business. How about taking a little bit less? No deal. Pay us.

That's the Mob as well as government. What they really care about is getting their cut. The negative consequences of their actions...they don't care about that.

Re:Government on Taxes is like the Mob (1)

jimbrooking (1909170) | about 3 years ago | (#36621836)

Can't cite a reference, but I'd venture to guess that governments were here before mobs. Your hypothesis might better have read "The Mob is like Government", but I suppose that would render the remainder of your argument meaningless. Oh wait, maybe we should turn essential services like police protection over to the mob!?
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