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Slate: Amazon's Tax Stance Unfair and Unethical

Soulskill posted about 3 years ago | from the pretend-it-was-an-oil-company dept.

Government 949

theodp writes "We've talked before about Amazon's reluctance to collect sales tax, with Jeff Bezos going so far as to say it's unconstitutional. So it's not too surprising to see Amazon support a California referendum to repeal sales tax for online retailers. Slate's Farhad Manjoo loves buying from Amazon and would hate to pay higher prices, but says the e-tailer 'has no intellectually sound arguments against collecting taxes from residents — by all ethical and civic standards, its position is unsound.'"

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Just that pesky Constitution (5, Insightful)

Anonymous Coward | about 3 years ago | (#36748846)

Damn those federal rights over interstate commerce.

Re:Just that pesky Constitution (2)

Seumas (6865) | about 3 years ago | (#36749146)

Don't worry. There is a clearly movement growing to "redo the constitution". Look at the recent Time article and that CNN douchebag Fareed Zakaria's comments about how it's "time to update the constitution". After all, Iceland is writing a new constitution for the second time in the past sixty years or so using the comments of citizens via Facebook and Twitter and Youtube. Why shouldn't we? After all, our founding fathers had no idea when they wrote the constitution that freedom of speech would hurt so many people with thin skin, right? They were just a bunch irrelevant dumbasses from olden times, right? (I also heard Clinton speaking somewhere recently where he went on and on about the same idea).

http://globalpublicsquare.blogs.cnn.com/2011/06/20/is-it-time-to-update-the-u-s-constitution-2/ [cnn.com]

Re:Just that pesky Constitution (3, Insightful)

darkmeridian (119044) | about 3 years ago | (#36749336)

There are many aspects of the Constitution that need updating. I mean, this bears repeating however obnoxious, but some of the Founding Fathers were slave owners. They were not necessarily the most in tune with human rights.

Perhaps we want to clarify gun rights. Perhaps we should put in a very clear right to privacy (such as the right to contraception, to interracial marriage, and to abortion, perhaps) instead of having a non-elected Supreme Court cobble that together.

I don't know if it's a good idea. I would reject it because we'll end up banning free speech given the current political climate. But it's not stupid enough to dismiss out of hand. If we had another shot at drafting a Constitution, we might be able to do a better job than the Founding Fathers did.

Re:Just that pesky Constitution (4, Insightful)

EraserMouseMan (847479) | about 3 years ago | (#36749164)

Which have been abused and used nothing today like what the framers had in mind.

if he's so concerned (5, Insightful)

jaymz666 (34050) | about 3 years ago | (#36748866)

He should pay the use tax and be done with it, like a law abiding citizen

Re:if he's so concerned (2, Insightful)

Wonko the Sane (25252) | about 3 years ago | (#36748900)

He really shouldn't throw terms like "intellectually sound" around if he's in favor of taxes because the idea that's it's ethical and moral to use the threat of violence to force people to purchase services that they are not willing to purchase voluntarily rests on pretty shaky ground itself.

Re:if he's so concerned (4, Insightful)

geekoid (135745) | about 3 years ago | (#36749038)

Actually it creates a firm ground in which we can build a thriving, prosperous, and advancing civilization.

Re:if he's so concerned (2, Insightful)

Anonymous Coward | about 3 years ago | (#36749078)

our civilization is none of those things

Re:if he's so concerned (0)

Anonymous Coward | about 3 years ago | (#36749158)

...because there isn't enough tax revenue collected to pay for them.

Re:if he's so concerned (0)

Anonymous Coward | about 3 years ago | (#36749202)

Well, the vendors of goods and services that you take or use and are unwilling to pay for are more than happy to use the force of the law and threat of violence to get you to pay for those goods and services as well. If not the police, than Luigi and Mikko will do it.

On the other hand, Amazon already pays taxes on the goods and services it uses to provide you your goods and services. It does pay taxes for using roads through FedEx, UPS and USPS, just like any other user of those services does. It pays its telecom taxes, just like the rest of us do.

Its usage of the goods and services offered by municipalities and the state is different than a brick-and-mortar store. It doesn't have stores that need police and fire protection, that use city water and sewer systems, etc. Where it has warehouses, it should pay warehouse taxes like any other warehouse does, because its warehouses and distribution centers then are no different than a car parts warehouse or grocery distribution center. If the state the warehouse/distribution center is in (say, Nevada) doesn't have that tax, then... win for Amazon.

Why should it have to pay what brick-and-mortar stores have to pay for something it doesn't use?

Re:if he's so concerned (1)

FooAtWFU (699187) | about 3 years ago | (#36749250)

Yeah. I mean, I can respect both the position that Amazon should pay sales taxes and the position that they shouldn't as belonging to two differing schools of thought and ideology, and just because I don't agree with one of those schools doesn't render the other position "intellectually unsound".

We're mostly pretty intelligent people here. We don't need a line of political reasoning shoved down our throat.

Re:if he's so concerned (1)

Anonymous Coward | about 3 years ago | (#36748956)

The problem is that there is no "intellectually sound" reason for the tax to exist.

The sales tax was to cover services that B&M retailers needed from the state, county, and city. Amazon, being a net business, uses none of those services.

The only reason I can see is that the tax is to protect the retailers physically in the State who support the politicians with campaign gifts and to get around the restraint of trade clause in the Constitution.

Re:if he's so concerned (0)

Anonymous Coward | about 3 years ago | (#36749162)

No, standard business taxes cover those expenses, which is why those taxes are paid for by the business. Sales tax is paid by the consumer to cover the state services those consumers use, in lieu of high state income taxes which are much harder to pass without an uproar from state residents.

Re:if he's so concerned (0)

Anonymous Coward | about 3 years ago | (#36749178)

The sales tax was to cover services that B&M retailers needed from the state, county, and city.

[Citation needed]

Amazon, being a net business, uses none of those services.

[False]

Re:if he's so concerned (1, Insightful)

rotide (1015173) | about 3 years ago | (#36749180)

"The sales tax was to cover services that B&M retailers needed from the state, county, and city. Amazon, being a net business, uses none of those services."

I can't really comment on what sales tax was meant to cover, however, to say Amazon uses no resources/services of a state it ships items to/through is dishonest.

Amazon may not directly transport items across state owned roads in _every_ state, but it does indeed depend on those roads to exist so their products can be transported by other companies. Beyond that, they also need protection from the state/local police in every state they ship items to. They need all the supporting services just to keep the roadways open. And that's just the tip of the iceberg, I'm sure.

That being said, I think a tax already exists to cover this "issue" on taxes, Use Tax.

Re:if he's so concerned (0)

bmo (77928) | about 3 years ago | (#36748966)

Indeed.

If I order something by mail or drive up to New Hampshire and buy an item, I am responsible for paying the tax here in Rhode Island.

How is this any different than ordering something over the internet?

I have an idea whose argument is intellectually bereft, and it's not Amazon's.

--
BMO

Re:if he's so concerned (0)

Anonymous Coward | about 3 years ago | (#36749118)

Actually, depending on the state you live in, probably yes, you are liable. I lived in CT a while ago and the state expected you to pay sales tax if you went shopping in NYC.

Re:if he's so concerned (2, Insightful)

causality (777677) | about 3 years ago | (#36749106)

He should pay the use tax and be done with it, like a law abiding citizen

Yeah, no kidding. Also I love the completely unbalanced perspective from the summary:

Slate's Farhad Manjoo loves buying from Amazon and would hate to pay higher prices, but says the e-tailer 'has no intellectually sound arguments against collecting taxes from residents — by all ethical and civic standards, its position is unsound.

"Civic standards" I can buy, but ethics? We're talking about government here: the only entity legally authorized to use lethal force in order to achieve its goals. Government is force. For wise laws and unwise laws alike, they are all enforced by an implementation of "might makes right". Even when they ask nicely, it is understood that force or threat of force will be used to deal with non-compliance. This is carried out by men with guns and other weapons, typically known as either police or agents.

Amazon may be acting flippant but there is no moral equivalence here. Government at its finest is a benign parasite, a necessary evil that takes its money (and property) instead of earning it. We have one simply because that's a little better than not having one. It is not something to glorify, hold in high esteem, or celebrate to the tune of patriotic music. Government at its worst is a bloated, overgrown cancer that destroys its own nation and its own people. Government's style of "might makes right" is scraping the sludge at the very bottom of the barrel when it comes to ethics. At least you can refuse to ever allow Amazon to affect your life. You can simply not do business with them.

Then there's the entire Constitutional notion that there are actually good reasons why we don't have states regulating interstate commerce. If Amazon were breaking a law, why haven't they been prosecuted? Until a prosecutor proves otherwise, they're presumed innocent. They're presumed to be simply doing something that certain people don't like. Those people want to do what, force Amazon to do otherwise? Make it conform to their personal whims? By what manner of legal threat? How ethical is that?

Re:if he's so concerned (3, Insightful)

cforciea (1926392) | about 3 years ago | (#36749150)

I always hate when people say things like that. The whole reason we have a government from a economic game theory perspective is to act as a mutually accepted arbiter to enforce cooperation to avoid a Tragedy of the Commons [wikipedia.org] scenario for shared resources. The economically rational choice is always to not take the cooperative action unless you can ensure everybody else is going to.

Donating to charities might still make sense because you aren't doing it necessarily in the context of rational self-interest, but the government is specifically a mechanism to leverage people's rational self-interest. There's no way to get away from that context. It therefore never makes sense to tell people to donate tax money except in the childish "if you love the government so much why don't you marry it" sense.

Re:if he's so concerned (0)

Anonymous Coward | about 3 years ago | (#36749268)

in other news, people and institutions behave irrationally. thus your theories are irrelevant and the more we continue to use them to develop "insight" the more corrupt and awkward our society becomes

Re:if he's so concerned (2)

jaymz666 (34050) | about 3 years ago | (#36749308)

It's not a donation if you are required to pay it. If the tax code requires you to pay it, then pay it.

Add to the pile of dung (0, Troll)

DigiShaman (671371) | about 3 years ago | (#36748876)

In America at least, the entire tax system is broken. To continue to support it in its current incarnation is -- by al ethical and civic standards, an unsound position. Hey Jeff, let's start with the premise that the entire tax system needs a complete overhaul and move forward from there.

Re:Add to the pile of dung (2)

geekoid (135745) | about 3 years ago | (#36749060)

It needs radical change, not complete overhaul. A complete overhaul would be disastrous. that term is just used to create an emotion response.

But what needs to be changed is so emotion entrenched that it could never happen.

Perfectly sound legal arguments (4, Insightful)

Eggplant62 (120514) | about 3 years ago | (#36748886)

Someone please tell me how a corporation based in Washington State and legally incorporated in Delaware suddenly becomes a tax collector for states in which it does not have a physical presence? I can see being held liable for Delaware and Washington State, but until someone amends the tax codes of the remaining 48 states and other U.S. territories, I think it should remain that we don't pay sales tax on out-of-state purchases. I don't live in Ohio and I don't expect to pay Ohio state sales tax on a purchase I made over the Internet, nor do I expect the state of Michigan to tax my purchase from a company outside of Michigan.

Re:Perfectly sound legal arguments (0)

cratermoon (765155) | about 3 years ago | (#36748976)

Amazon has a physical presence in California. Did you read the article? Oh wait, this is /., of course you didn't.

Re:Perfectly sound legal arguments (3, Informative)

Osgeld (1900440) | about 3 years ago | (#36748978)

you know they have warehouses scattered about the entire country right? So how is it any different than other e stores, for example if I buy from newegg I pay sales tax, its not a company based in my state, but they do have a warehouse located 3 hours southwest from me

Re:Perfectly sound legal arguments (5, Informative)

Bill_the_Engineer (772575) | about 3 years ago | (#36748992)

Someone please tell me how a corporation based in Washington State and legally incorporated in Delaware suddenly becomes a tax collector for states in which it does not have a physical presence?

I think the problem Amazon is having is that they had associates that were based in California. These associates have a physical presence in California and forces Amazon to abide by state law. Amazon wants to continue to have an associate program, yet not have to keep track of sales tax for each state that an associate exists. This is why Amazon is lobbying for this referendum in California.

Re:Perfectly sound legal arguments (1)

LWATCDR (28044) | about 3 years ago | (#36749132)

That is a very fuzzy presence. The associates put links on their sites which are just advertisements for items in Amazons store. That would be like saying that a company has a presence in a state because they bought an add on a local TV show.

Re:Perfectly sound legal arguments (2)

Kenja (541830) | about 3 years ago | (#36749242)

If I live in California, then buy something from an Amazon Associate in California and my product is shipped from California to me, how is that "fuzzy"?

Re:Perfectly sound legal arguments (0)

Anonymous Coward | about 3 years ago | (#36749002)

states in which it does not have a physical presence

Because it does have a physical presence in those states. Warehouses mostly, by my understanding.

Re:Perfectly sound legal arguments (0)

Anonymous Coward | about 3 years ago | (#36749024)

Actually they do collect sales tax in states where they have a physical presence... for example here in North Dakota, they collect sales tax from me on my orders, due to the fact they have a warehouse in Grand Forks. The part they are fighting is the assertion that somehow they're responsible for collecting sales tax in states where they do not have a presence.

Re:Perfectly sound legal arguments (2)

Osgeld (1900440) | about 3 years ago | (#36749122)

that might be fine if they did not show up at every state they want a presence in and instantly demand sales tax immunity

Re:Perfectly sound legal arguments (4, Insightful)

OverlordQ (264228) | about 3 years ago | (#36749168)

Someone please tell me how a corporation based in Washington State and legally incorporated in Delaware suddenly becomes a tax collector for states in which it does not have a physical presence?

Because it's easier trying to get the corporation to pay a sales tax then going after their own citizens for not paying the use tax.

Re:Perfectly sound legal arguments (3, Insightful)

im_thatoneguy (819432) | about 3 years ago | (#36749286)

I think it should remain that we don't pay sales tax on out-of-state purchases. I don't live in Ohio and I don't expect to pay Ohio state sales tax on a purchase I made over the Internet, nor do I expect the state of Michigan to tax my purchase from a company outside of Michigan.

Except that you're missing the entire point of the law. You *already have to pay sales tax* on out of state purchases in pretty much every state with a sales tax.

The only change is that California in this instance wants to put the collection process in Amazon's hands.

This isn't requiring Amazon to pay California taxes for all of their sales. This is requiring Californian citizens, who already are required to pay taxes an easier and more straight forward system of paying at the point of purchase as if it was a physical store instead of filling out a form and keeping receipts.

Re:Perfectly sound legal arguments (1)

cpotoso (606303) | about 3 years ago | (#36749326)

Well, lets make it simple then: amazon is no longer legally able to sell to CA residents. All solved. If you do business with CA then I find it fair that you will collect taxes like any other business. It is highly unfair to those business in CA that they have to collect the taxes bu amazon does not (it effectively gives amazon a ca. 10% discount over the competition).

Unless (1)

Danathar (267989) | about 3 years ago | (#36748898)

Unless you disagree in which case it is intellectually sound (from the standpoint of the person disagreeing)

Taxation is unethical (1, Insightful)

jdavidb (449077) | about 3 years ago | (#36748910)

Winning a stupid popularity contest did not give people the moral right to take the money of other people, even for allegedly good causes. Taxation is simply theft. Apparently this is lost on the people of Slate, however, if they feel that "by all ethical and civic standards, Amazon's position is unsound." They are dismissing my standard of ethics out of hand, unconsidered, unrefuted, and I feel that the burden of proof is on them to prove that taxation is ethical in the first place. My ethical position may be a minority position, but a majority is not always correct, and I have yet to see a justification for taxation that does not amount to "the end justifies the means," which is not even close to ethical.

Re:Taxation is unethical (0)

Anonymous Coward | about 3 years ago | (#36748962)

Taxation is necessarily theft.
Taxation is necessary theft.

Re:Taxation is unethical (2, Insightful)

TooMuchToDo (882796) | about 3 years ago | (#36748988)

You are free to move to a country that doesn't tax its citizens if you're unhappy about it. I think you'll be hard pressed to find a developed country that doesn't tax it's citizens to provide necessary services.

Re:Taxation is unethical (3, Insightful)

eddy the lip (20794) | about 3 years ago | (#36749068)

I don't know, I hear Somalia's quite the libertarian paradise.

Re:Taxation is unethical (0)

Anonymous Coward | about 3 years ago | (#36749096)

I hear Somalia doesn't collect taxes. Sounds like a great place to raise a family.

Re:Taxation is unethical (0)

Anonymous Coward | about 3 years ago | (#36749254)

Our country didn't used to tax its citizens, and it managed to provide necessary services. The government was fully funded by tariffs.

Re:Taxation is unethical (1)

Anonymous Coward | about 3 years ago | (#36749062)

Fine, leave. Find some country with 100s of millions of people, where the government collects no taxes. Heck find a country with 100s of millions of people with no government and see how things go.

Have fun driving around on the roads, oh wait there wouldn't be any roads. Have fun going to school or sending your kids to school, oh, wait, there wouldn't be any school except for the wealthy who can pay for it. When your house gets burglarized call the police, oh wait, there wouldn't be any and they couldn't get to your house do to lack of roads.

Well since there would be no basic infrastructure to go anywhere, I guess you could just hang out at your cities public park or the library. Oops, those don't exist either in your world.

You sir are a fucking idiot.

Re:Taxation is unethical (0)

Anonymous Coward | about 3 years ago | (#36749170)

Big talk AC!

The roads are paid for by gas taxes. Oh wait! They're stealing that money for other things! I don't have kids so I'm supposed to subsidize yours? And my house has gotten burglarized and the FADM* are busy at the donut shop. They usually show up 30-45 minutes after getting called - if at all.

* Fat Asses Donut Munchers

Re:Taxation is unethical (0)

Anonymous Coward | about 3 years ago | (#36749080)

How about "you use public utilities (road/transport/police/firefighter/medical/military protection/schools/water) every day, and we expect you to pay your fair share"?

I don't understand how someone can be so blind that they see the tragedy of the commons in its starkest terms and react with "yes! Screw those commons! Let's go, everyone else pay up!" Is it a basic misunderstanding of elementary game theory? A basic misunderstanding of society and public services? Do people advancing this argument actually believe that all of their income is entirely due to them -- they received no help from anyone on the way, and anyone asking for any money clearly is stealing it? This baffles me so that I can come up with but 2 reasons before being forced to include strawman positions as possible justifications.

Re:Taxation is unethical (0)

bmo (77928) | about 3 years ago | (#36749084)

>Taxation is simply theft

You rely on civilization for your daily needs.

Pay for it.

--
BMO

Re:Taxation is unethical (0)

Anonymous Coward | about 3 years ago | (#36749154)

OK how much?

Re:Taxation is unethical (1)

Seumas (6865) | about 3 years ago | (#36749214)

Perhaps the original poster should have said current taxation is simply price-gouging.

If our extraordinary amount of taxes were spent wisely and responsibly, we would all probably be happy to contribute and we'd probably live in a world much closer to utopia. However, nobody likes having excessive money taken from them so that it can be put into a corrupt and thieving machine of obscurity which barely functions.

Re:Taxation is unethical (2)

TheRaven64 (641858) | about 3 years ago | (#36749102)

That money they're taking... why do you think it has value?

Re:Taxation is unethical (1)

geekoid (135745) | about 3 years ago | (#36749200)

No, it is not unethical.
There isn't even a debate. To say taxation in unethical s to say letting people rot in caves and never advance is ethical.

Without taxation, we would not be having this discussion becasue there would be no communication that could ahppen for more then a few mile from where you live.

Our founding fathers recognized the need for taxes, as did the Romans the Greeks. Pretty much every advance society can only move forward by creating a common use infrastructure. An infrastructures that can be used by all classes, freely.

Without taxes, Archimedes would be unknown, same with Newton, Einstein, Tim Berners-Lee, and many others.

Without taxes, disease and plague would ravage the world regularly.
I can go on, but I doubt you are actually rational about this issue.

Re:Taxation is unethical (1)

Joehonkie (665142) | about 3 years ago | (#36749232)

I hope you don't use any public services or infrastructure, then.

Re:Taxation is unethical (1)

Anonymous Coward | about 3 years ago | (#36749252)

You need to tone down your rhetoric. Taxes are legally collected, and most of the laws in place (e.g., income tax) were voted on when most of these 'thieves' you refer to weren't even born yet. We are trying to understand what pushes the trend toward increasing taxation, and we are trying to build a prosperous and _free_ economy. Perhaps you should be part of the solution, instead of participating in obviously baseless personal attacks.

FYI... (1)

_0xd0ad (1974778) | about 3 years ago | (#36749294)

Taxation is simply theft.

Taxation without representation is theft is the way that particular meme goes, IIRC.

Re:Taxation is unethical (1)

Anonymous Coward | about 3 years ago | (#36749298)

I will refer to Jesus for the ethical and moral justification for taxation.

Show me the coin used for paying the tax.” They brought him a denarius, and he asked them, “Whose image is this? And whose inscription?” “Caesar’s,” they replied. Then he said to them, “So give back to Caesar what is Caesar’s, and to God what is God’s.”
http://www.biblegateway.com/passage/?search=Matthew%2022:15-22&version=NIV

Who prints the dollars you work for? Who's name is on it? It's the good ole USA. So if they want some of it, give it to them.

If you quit getting paid in US dollars, the US government will quit asking for them.

Countries don't need taxes (-1)

Anonymous Coward | about 3 years ago | (#36748926)

Look at Somalia, no taxes there!

Schools, F-22 Raptors and roads will all magically pay for themselves through self-sustaining wars like Iraq.

Pay taxes? (2)

kenholm3 (1400969) | about 3 years ago | (#36748928)

Amazon won't pay taxes, they'll just collect them from you and me. WE will be the ones paying those taxes...

Re:Pay taxes? (1)

ScentCone (795499) | about 3 years ago | (#36749206)

Amazon won't pay taxes, they'll just collect them from you and me. WE will be the ones paying those taxes.

And then Amazon has to raise their prices to cover the huge administrative costs of policing all of that, debiting/crediting for returned items, complying with what different counties in some states consider to be taxable items (real food vs. snack food? medicine vs. cosmetics?) while other counties within the same state do not, at different times of the year, and on and on. What happens when a particular municipality in a state decides to have a pre-school-season sales tax "holliday" on specific classes of items (clothes, under certain dollar amounts, and books - but only certain kinds of books - and such)? This adds an enormous layer of complexity to an out-of-state company's business accounting, all because California can't get its own citizens to comply with their own laws and pay use taxes on items they've bought from a business in some other state.

Re:Pay taxes? (1)

Seumas (6865) | about 3 years ago | (#36749234)

Correct, that is how it is supposed to be.

Sponsors (4, Insightful)

crow_t_robot (528562) | about 3 years ago | (#36748932)

This Slate article has been brought to you by Best Buy, Target, Walmart, etc.

Sears (2)

whoda (569082) | about 3 years ago | (#36748936)

So Sears Roebuck owes the states 70 years or so of back taxes?

Re:Sears (1)

SvnLyrBrto (62138) | about 3 years ago | (#36749094)

Sears actually took this very issue all the way to the supreme court and WON. That's how we have the "physical nexus" rule, any why Amazon's Fernley, NV distribution center handles most orders in California, in the first place. The ironic thing is that now Sears has done a 180 and wants Amazon to have to pay the tax that Sears does not. Fortunately, the ruling protects everyone, not just Sears.

How the state legislature thinks they can override the SCOTUS though, I don't know.

Re:Sears (0)

Anonymous Coward | about 3 years ago | (#36749246)

This is the part I really don't understand. People talk this up like it's a new issue, when, yeah, there's existing case law about this very practice and how it relates to state collection of sales tax.

I think it's very much worth noting that no one really seemed to give a rat's behind until a few years ago when some states (*cough* California *cough* New York *cough cough*) suddenly found themselves on the wrong end of rather larger budget deficits.

None of this even addresses the fact the article's arguments are very poorly presented (making no mention of Sears Roebuck, or the interstate commerce clause for two examples), as most Manjoo pieces are.

Re:Sears (1)

LWATCDR (28044) | about 3 years ago | (#36749160)

Actually it could be well over hundred years.

Re:Sears (1)

ScentCone (795499) | about 3 years ago | (#36749216)

No. Sears has been collecting and remitting sales taxes all along, because it has stores physically in those states. That's the difference.

Re:Sears (1)

geekoid (135745) | about 3 years ago | (#36749218)

No. People who bought goods from them and didn't pay their local sales tax owe the state taxes.

Nobody admits... (1, Insightful)

GooberToo (74388) | about 3 years ago | (#36748968)

...but states are already collecting taxes on etailer sales. They pay those taxes on transportation costs. These places also generate jobs. Those people buy things which also allow for taxation.

States are just pissed that their double dipping means they might actually have to be good at their job to remain in office because balancing a budget becomes more important. Whereas the traditional school of thought is you're elected to funnel state and federal dollars to your buddies - or to declare eminent domain for an illegal land grab which is then promptly gifted to your buddies. And if you can't distract people with the slush funds lying around, how are they supposed to get away with crime as usual?

I mean, no crime, forced to actually do your job within a reasonable budget? What is this world coming to?

Re:Nobody admits... (2)

Kenja (541830) | about 3 years ago | (#36749344)

So normal retail sources dont have transportation costs or generate jobs?

Again. If I live in a state, order something from someone in the state and the goods are shipped within the state to me, why should I not pay taxes just because I used the internet to place the order?

If you are against sales tax in general, fine. But thats a whole other conversation. I can think of no logical reason to exclude internet orders from existing tax laws just because the order was placed on the internet. What if I have a regular store front but I have customers who walk into my store buy things on a web kiosk I setup and then hand them the items. Should that also be excluded from taxes?

It's a practical nightmare (4, Insightful)

localroger (258128) | about 3 years ago | (#36748970)

The problem is that sales taxes are a patchwork nightmare. Not only do different states have different rates, different collection mechanisms, and different auditing requirements, so do counties and municipalities. Just doing sales taxes for a small company that does business in 3 or 4 states is a nightmare; for a national company, it would be almost impossible. Then if you don't collect the right amount of tax, when the offended entity gets around to auditing you they hand you a bill for the tax on every transaction you've ever done since their last audit. I can understand why Bezos is so adamant about this; it's not about civic duty, but about practical possibility. If the tax was flat across the country and there was a single unified mechanism for remitting it, I doubt he would care so much.

Re:It's a practical nightmare (0)

Anonymous Coward | about 3 years ago | (#36749124)

Are you an idiot? You are aware that there are many companies that manage to successfully collect sales tax in more than one state, right? I've heard rumors that there are even some companies that have stores in EVERY state, though I'm not sure I believe that.

Amazon doesn't want to collect sales tax because it's one less price advantage they'll have over their bricks and mortar (or even just local) competitors.

Re:It's a practical nightmare (1)

geekoid (135745) | about 3 years ago | (#36749264)

yeah... you might have a point if massive retailer weren't already doing that.

What the difference in wal-mart doing it centrally and pushing that data out to specific stores, and amazon needing to keep track?

Re:It's a practical nightmare (1)

aaarrrgggh (9205) | about 3 years ago | (#36749292)

Cry me a fucking river.

I have to deal with engineering licenses in 10 states, all with different CEU requirements, ethics exams, codes of conduct, and codes of practice. Business licenses in about 20 cities and four states, property taxes, gross receipts taxes, payroll taxes, and various other filing requirements.

This for a company with about $5MM revenue, 25 employees, and a single office in a city that has no special taxes or filing burdens. All this translates into a single person full time, plus external accountants.

To say that Amazon can't figure out how to report to less than 1,000 entities is just stupid. Conversely, an entity with less than $100k in a city, state, or other tax body could reasonably argue hardship.

Re:It's a practical nightmare (1)

LWATCDR (28044) | about 3 years ago | (#36749322)

Yep sales tax rates very from town to town. Amazon might have a the staff to deal with it but it would be a nightmare. Just imagine how bad it will be for some little we retailer or even worse some small traditional catalog company. Some where Moonchild organic and heirloom seed company in New Hampshire is looking down the barrel of a the California department of taxes because someone in California has a link to their Mother Merry tomato seeds on their blog along with a google ad for the website.
Oh and if you say that they will not go after a little company like that, is that fair? The law should be the law for everyone right?
 

Why should Amazon do the work of the government? (1)

Anonymous Coward | about 3 years ago | (#36748980)

The government should collect taxes, not amazon. They need to implement + maintain tax code. If they are required to collect the taxes, they should be credited full costs for doing so (licensing, labor etc).

Beyond this requirement, there's the question of why a non-local business should collect local taxes when they don't even exist in that state. The taxes paid by Fedex, UPS etc cover the use of the public services involved.

Too many tax rules for different locales (1)

Scooter_Libby (939947) | about 3 years ago | (#36748984)

Every state, many counties, cities, &c., have different tax rules all of which online retailers are to manage and process? Add to this the fact that the myriad tax laws can change. Who is in charge of notifying the online retailer / ensuring compliance when a municipality changes the sales tax law? Whether some one can make an "ethical" argument for paying sales tax to a locality in which there is no physical presence aside, the attempt to shift the burden of implementing tax collection for a large set of arbitrary laws across the nation is absurd.

Re:Too many tax rules for different locales (1)

beschra (1424727) | about 3 years ago | (#36749184)

Who is in charge of notifying the online retailer / ensuring compliance when a municipality changes the sales tax law?

There are for-profit businesses that do this. Vertex is big in the field. You can pay for their service which provides monthly updates to all sales and use tax rates in all jurisdictions in the US. Lots of software that business use to run their books is able to import and use this data.

You can make a case that there shouldn't be a need for this type of service, but it is available.

Just Federally Coordinate the Sales Tax Already (0)

realxmp (518717) | about 3 years ago | (#36748996)

Whilst the Federal government may often be accused of overreaching the powers as defined by the constitution, this is not one of those times. Having many different forms of sales tax made sense when 99% of sales was brick and mortar but it's pretty much unworkable now. And the argument that congress won't agree to it isn't an excuse, if Europe can do it for VAT then the USA can do it for Sales Tax*. Besides I'm pretty sure if someone like Walmart threw their weight behind it with a few choice campaign contributions you could get it through. * Whilst VAT isn't a sales tax, it is a similar idea.

Mod Parent Up! (1)

Cassini2 (956052) | about 3 years ago | (#36749174)

Bang on. A single federal tax is the way to go. Unfortunately, with the current Obama-Republican-Tea Party fight in Congress, a federal tax is unlikely to happen.

A federal tax would go a long way to fixing the deficit however.

Re:Just Federally Coordinate the Sales Tax Already (1)

ScentCone (795499) | about 3 years ago | (#36749270)

Then you're also asking all of those states, counties, and cities to completely re-write their tax codes and even re-charter their constitutions because of differences in how they raise state revenues (some have no sales taxes, and opt for higher property or income taxes instead ... or some simply have different mixes of those things). You're talking about telling a state like Wyoming that it now must consider its revenue strategy in the same way that New York does. Which is culturally, geographically, seasonally, and otherwise crazy talk.

Re:Just Federally Coordinate the Sales Tax Already (2)

Seumas (6865) | about 3 years ago | (#36749282)

Exactly. The United States of America was completely built around the concept of having power concentrated from one primary location, out to the spokes of the rest of the empire. Oh wait, it wasn't.

Also, what are you going to do about the states that don't have sales tax?

Also, you're really going to hold the europe/the eurpean union up as an example of economic sanity?

oversimplified (0)

WillyWanker (1502057) | about 3 years ago | (#36749032)

It's ridiculous to say that online retailers shouldn't have to collect taxes in states in which they have a presence. Sorry Amazon, if that's what you're fighting for you're going to lose as those terms are spelled out in the Constitution and by federal Congressional powers. States have no ability to repeal such statutes.

What states CAN do, and what has been the crux of the issue (I think), is in redefining what constitutes a "presence". And this is where things get very grey and murky. Trying to get affiliates declassified as a "presence" certainly isn't unconstitutional. It's constitutionally-questionable to consider them as a presence to begin with. Traditionally a presence required just that -- a physical presence in the state -- a warehouse, and office, a distribution center, etc; NOT just some kind of affiliation with someone else doing business from the state in question.

I suspect this issue is going to wind up in SCOTUS's hands. Typically one could guarantee the corporate entity would win considering how deep SCOTUS is in Corporate America's pockets, but this issue has corporate giants on both sides of the battle so there is no way of predicting which way it'll go.

Durp durp. Pay it yourself, Dudley Doright. (1)

Seumas (6865) | about 3 years ago | (#36749036)

I'm baffled by morons, like this. The obligation is that the citizen of a state pay their taxes owed to that state. If you choose not to have your employer collect your income tax, then you are obligated to pay that tax at the end of the year. If you made purchases that should have been subject to sales tax, then you are obligated to pay that tax at the end of the year, when you settle up.

I fail to see where it's the responsibility of any business (especially outside of the state) to do that work. And if they're supposed to be obligated to collect sales tax for every state, then why shouldn't they be responsible to do the same for every other country on the planet, too?

So many people eager to jump on the bandwagon of disingenuous brick and mortar chains who can't compete and just want to hobble the competition in any way they possibly can, with no regard for the principal.

Plus, aren't we a little tired of the incessant taxation? My income is taxed when it comes in. It's taxed when it goes out. And then the guy who receives it has to pay income tax on the same money that I just payed income and sales tax on. It never fucking ends.

How much do you want to bet the same guy advocating this doesn't pay a use tax on items he bought out of state while on vacation, once he crosses the border back into his own state?

bad enough dealing with it at single location (1)

ebunga (95613) | about 3 years ago | (#36749040)

Talk to the manager of a grocery store to see what they think about sales tax rules. It is a heinous burden to force that on a single store located in a single locale. Now multiply that by the number of cities and counties in the US. There is no way any company could ever comply with that in any reasonable manner.

You work and toil and earn bread, and I'll eat it (5, Insightful)

Kohath (38547) | about 3 years ago | (#36749050)

It is the eternal struggle between these two principles -- right and wrong -- throughout the world. They are the two principles that have stood face to face from the beginning of time, and will ever continue to struggle. The one is the common right of humanity and the other the divine right of kings. It is the same principle in whatever shape it develops itself. It is the same spirit that says, 'You work and toil and earn bread, and I'll eat it.' No matter in what shape it comes, whether from the mouth of a king who seeks to bestride the people of his own nation and live by the fruit of their labor, or from one race of men as an apology for enslaving another race, it is the same tyrannical principle.

-- Abraham Lincoln, October 15, 1858 Debate at Alton

Unethical? Fix the Law Then. (5, Informative)

salesgeek (263995) | about 3 years ago | (#36749058)

Here's what California has done:

They changed the definition of having a location in California such that if you have a 1099 contractor doing advertising for you, you have a location in California, and therefore have to collect sales tax.

This is unconstitutional and irrational at the same time. If I hire an ad agency in your state, that does not mean I have moved there. It's no different than hiring an accountant, lawyer, or for that matter, a shipping company with a location in your state to define location (nexus). There's a reason why our constitution gives sole power to regulate and levy duties (tax) interstate commerce in a *uniform way*. This prohibition is to prevent trade wars between the states and to prevent large states from using taxation to force businesses to relocate there.

OK, so what about the poor, local businesses being put under by ______________.com?

Well, if you are a small local business, and sell mail order, you don't have to collect sales tax for shipments to anywhere other than your home state. That gives you an advantage in 49 states.

Re:Unethical? Fix the Law Then. (0)

Anonymous Coward | about 3 years ago | (#36749296)

ok, i'm in the UKso i don't understand everything going on here...

why would you ever by anything from your own state (convenience aside) if you can avoid paying the tax by mail ordering from another state.

what if your home is on a state boundry?

do you not pay tax to anyone?

Huh (0)

Anonymous Coward | about 3 years ago | (#36749070)

Taxation is ethical? Always viewed it as institutional theft.

Let's just do away with sales tax (4, Insightful)

spiffmastercow (1001386) | about 3 years ago | (#36749098)

Sales tax is a regressive tax -- it hurts the poor the most, and is barely a burden on anyone beyond middle class. In addition, sales tax hurts local businesses, who have to compete not only on direct prices with the likes of Amazon, but then have to charge you an extra 5-10% as well. Instead, states should make up for lost sales tax with increased income tax. You'll get more consistent tax revenue, a healthier business community, and the added bonus of being able to know exactly how much you have to pay for stuff at the store before checkout without using a calculator.

This may be a bit simplistic, but... (2)

Neitokun (882224) | about 3 years ago | (#36749104)

Why don't we just replace all state sales taxes with one federal sales tax?

My idea of a fair solution... (1)

scharkalvin (72228) | about 3 years ago | (#36749114)

First, I'd define where an e-retailer was located. This could be where their web server is located, where their goods are shipped from, where their CEO has his office or most probably the state where they are incorporated in. They would be responsible for the collection of sales tax to THAT location for certain as part of their business license under their incorportation papers. Any state that wants to collect sales taxes from this e-retailer for sales made in their state would have to sign a contract with that e-retailer, and the state would have to pay the e-retailer for the cost of collecting the taxes. Only the federal government, or the state government of the e-retailers home state have the power to collect taxes from the e-retailer. Other states THINK or WISH they have this power, too bad you don't (at least not until the US Supreme court says otherwise).

This issue would be terribly easy to resolve... (2)

MikeRT (947531) | about 3 years ago | (#36749120)

If anyone in the state legislatures or Congress wanted to do it the right way. What you'd do is set up a system with these features:

1. Each state would be allowed to set one rate for the entire state.
2. Each state would publish its rate with the IRS.
3. The IRS would provide a simple web service for looking up compliance information, including rate and mailing addresses for each state's tax office.
4. The federal government would indemnify all businesses who comply with the IRS's published information from any civil or criminal charges in the event a state failed to keep its IRS records accurate.
5. Any state fails to keep its compliance records accurate with the IRS would be barred for 90 days from compliance coverage (the federal government would effectively declare that businesses could legally commit tax evasion if they are not based in the state).

"by all ethical and civic standards" (3, Insightful)

couchslug (175151) | about 3 years ago | (#36749126)

Bring legal standards or STFU. "Ethical" and "civic" standards are subjective. That's one reason LAWS were written.

All the Slate statement boils down to is "we haet Amazon, herp derp".

They do this in other countries too. (2)

bagorange (1531625) | about 3 years ago | (#36749142)

Amazon "imports" DVDs from the tax haven island of Jersey to its UK customers so it can dodge VAT and be cheaper than bricks and mortar shops in Britain.

It didn't occur to me until I read about this ongoing saga that this is a worldwide policy.
They see sales tax as a rule that does not apply to them. Anywhere

No sound argument FOR collecting them (1)

Gothmolly (148874) | about 3 years ago | (#36749224)

Leave it to Slate to fall to the assumption that taxes are a normal, inescapable part of life.

Living in Wonderland (2, Interesting)

frankxcid (884419) | about 3 years ago | (#36749244)

I am always floored how intelligent educated people will argue for something as ridiculous as people being under-taxed. There is no way a person can really believe that it would be more fair if more taxes are collected simply on the fantasy that if etailers are punished somehow brick retailer will get more customers? Do people really forget that any activity that is punished with more taxes will reduce. On the other side, brick retailers will not see any increase in business from taxing etailers unless their own taxes are reduced. The belief that fairness is that all parties get punished equally is the fundamental flaw in liberal ideology. I hope Amazon has the balls to fight this and them tell the California Government to F- themselves as they sell their products only to the other 49 states if they were loose.

Tax the resident? (0)

Anonymous Coward | about 3 years ago | (#36749262)

Taxing the purchaser is the way it works for mail order [wikipedia.org] . You make the purchase and then pay the sales tax where you live. Of course, can anyone here honestly say that after they ordered anything on-line or by regular snail mail they paid the applicable local sales or provincial tax? I'm not even sure who you'd send the money to, but I'll bet there's a form somewhere that almost nobody ever uses.

Anyway, all states and provinces are probably being consistently shafted when it comes to residents paying sales tax for out-of-jurisdiction purchases delivered to a resident. It also isn't exactly fair for retailers that are inside the local jurisdiction that their product gets local taxes applied, but outside purchases don't. It's a situation that discourages local purchasing. The simple solution is to tax at the point of sale regardless of where it is going, like they do in Europe, and have purchasers claim the tax back if that tax was not applicable to them. That approach has its downsides too, but would put local and out-of-jurisdiction retailers on the same footing.

I completely understand why companies like Amazon would oppose this, given that it gives them a significant price advantage over local retailers if they don't have to apply sales tax, but why should they benefit from that obviously unfair situation? What they're really asking for is a sales tax exemption for product sent out-of-state. Other than long-standing tradition, what are the reasons should they get that versus ordinary retailers selling to people in the state who do have to collect the tax?

This isn't an ethical issue ... (2)

quietwalker (969769) | about 3 years ago | (#36749304)

... it's one of convenience.

When you, as a consumer, buy an item out of state, receive a gift, or win money from gambling - or a slew of other sources - you're expected to report your winnings to the state so they can tax it. The problem is that people don't. They either don't know, don't care, or don't worry about residental-level tax evasion being enforced. So technically the mechanisms for taxes already covers this, but it would take each state a lot of effort to track down each evader and retrieve their monies due (though one could argue that, along with fines and the jobs this would create, it could be a good thing for the state). So, basically it's really tough for them, since they wrote laws which are hard to enforce.

That's the issue. It's not convenient for the state to collect tax money.

So now they're attempting to change the laws so it's easy - they make the online retailers responsible for collecting money on their behalf and it's fine. Then they have one place to go to collect, instead of hundreds of thousands that have to be litigated. They're attempting to make online retailers - like Amazon - bear the burden that they themselves do not wish to shoulder (granted, it's easier for Amazon, but by no mean effortless). They're stretching the interpretation of existing laws to claim that in-state third parties Amazon has a business relationship represent a direct presence by Amazon, and thus they must follow the state laws for brick and mortar vendors.

If you ~had~ to bring up ethics, you should probably look at the state lawmakers. They're acting like the stereotypical royal taxmen: they see you have money, and they will make up any excuse they can to liberate it from you. Moreso now, due to budget/economy constraints they have to work under.

That's a good idea (0)

Anonymous Coward | about 3 years ago | (#36749316)

Did this guy just brag publicly about committing tax evasion?

Hello? Is this thing on? "Tax Shipping!" (3, Insightful)

transami (202700) | about 3 years ago | (#36749318)

I only repeat this every single time the subject comes up, but no one ever seems catch on. I repeat...

Since online retailers must SHIP product they are at a disadvantage with brick-and-mortar shops. Moreover, requiring sales tax collection for every state of every online retailer would create undue burden on MANY THOUSANDS of small business sellers and drive them out of business.

If taxes must be collected on online retail, there is only one sensible place to lay the burden -- on shipping. The shipping companies are already well equipped to handle per-state pricing structures and already have the computer infrastructure to easily add to a new line item.

Sidestepping for a moment... (1, Insightful)

dpilot (134227) | about 3 years ago | (#36749324)

Sidestepping for a moment the entire issue of the ethics of taxation, etc...

Early on, I supported the idea of keeping internet purchases tax-free, as an incentive to let things grow. In a similar vein, I support the idea of making goods manufactured in outer space tax-free. But the "need for incentive" time is long past. In fact, if anything the brick-and-mortar stores are now in serious trouble and the sales tax increases their disadvantage. I won't sit here and say that a sales tax on internet purchases the right, ethical, and Ayn Rand approved way of doing this, but it's the mechanism we've got.

It was Oliver Wendell Holmes Jr., a justice of the US Supreme Court, who once stated that "taxes are the price we pay to live in a civil society."

In recent years, in a rather brutish way we've begun tugging at the threads that weave our civil society together. Is everything optimal? Certainly not. Is there waste? Certainly. I won't argue with either of those points. I argue with the rather careless tugging at the threads, and the inattention to what it's doing to the fabric of society, the seeming attitude that, "Keeping MY money is the most important thing." Once things start falling apart - and they are falling apart - we don't know where they will stop. It's easy to say, "All we need are the basics!" but beyond not everyone agreeing on what those basics are, we may not understand the underlying web of dependence on even those things we agree are basic. OK, we need firetrucks, but without roads and fire hydrants what good are they?

Sometimes I think the US is the only nation actively aspiring and working to achieve thrid-world status.

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