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Amazon Folds In California Sales Tax Deal

timothy posted more than 2 years ago | from the mussolini-would-be-proud dept.

Books 639

theodp writes "In a deal indicating all sides appear ready to call a truce, the San Jose Mercury News reports that Amazon.com is offering to back down from its referendum drive to repeal an online sales tax in exchange for a one-year moratorium on collecting the tax. Under the deal, Amazon would agree to begin collecting the tax from California residents in September 2012, unless Congress takes action on Internet sales taxes before then. The development comes a day after a NY Times editorial ripped Amazon over its sales 'tax dodge.'"

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639 comments

[sigh] (3, Insightful)

MyFirstNameIsPaul (1552283) | more than 2 years ago | (#37342014)

One more reason to leave California.

Re:[sigh] (1, Troll)

RightSaidFred99 (874576) | more than 2 years ago | (#37342074)

As a resident, _and_ as a business.

Re:[sigh] (-1)

Anonymous Coward | more than 2 years ago | (#37342080)

Everyone who is sane already left California over all the other crap.

Re:[sigh] (0, Insightful)

Anonymous Coward | more than 2 years ago | (#37342092)

Please do not let the door hit your butt. Enjoy your Randian paradise: Texas.

Re:[sigh] (1)

Anonymous Coward | more than 2 years ago | (#37342376)

Why so hostile? I live in California and I have to admit the online sales tax fucking blows. Aside from Amazon there is nowhere good to order computer parts online. Newegg would have charged me more than $150 dollars in sales tax for a recent order I made.

Re:[sigh] (1, Insightful)

h4rr4r (612664) | more than 2 years ago | (#37342462)

You do realize you have to pay that on your income state tax otherwise right?

If you don't like the tax vote or leave, do not just steal from your fellow man.

Re:[sigh] (0, Troll)

0123456 (636235) | more than 2 years ago | (#37342522)

Please do not let the door hit your butt.

That's what the left always say until the productive people take their advice and leave. Then the left realise they're about to lose all their taxes and start demanding exit visas and ranting about how the evil productive people have a duty to stay and work as slaves for the unproductive.

Re:[sigh] (4, Informative)

h4rr4r (612664) | more than 2 years ago | (#37342556)

Are you fucking kidding?

The Blue states are the only ones making any money. The red states are propped up with farm subsidies and other federal welfare.

The "leftist" state of Germany is the biggest economy in the EU, they are pretty much the only thing keeping it solvent.

Re:[sigh] (1)

alen (225700) | more than 2 years ago | (#37342118)

not like all the natives are always voting new spending via referendums and then complain about taxes

Re:[sigh] (2)

Kenja (541830) | more than 2 years ago | (#37342274)

Here's the problem with the California constitution. Spending and income must be two separate mesures on the ballot. This means (for example) extending the B.A.R.T line is one item to vote on, and paying for the extension is another. Often people vote yes on the spending but no on the income mesure.

Re:[sigh] (4, Funny)

h4rr4r (612664) | more than 2 years ago | (#37342500)

In that case the voting machine should be designed to smack them. A giant ACME cartoon style ballot blow to the head would also be acceptable.

Re:[sigh] (0)

Anonymous Coward | more than 2 years ago | (#37342152)

Done.

Re:[sigh] (0)

Anonymous Coward | more than 2 years ago | (#37342220)

If people would pay their taxes this wouldn't be an issue. Yes, I mean you.

Re:[sigh] (1)

geoffrobinson (109879) | more than 2 years ago | (#37342308)

So you think California's problem is that it doesn't get enough tax revenue not that it over-regulates businesses and its tax rates are too high overall? What is the proper level of revenue? At what point, will some people say "that's enough for all our real needs"?

Re:[sigh] (1)

h4rr4r (612664) | more than 2 years ago | (#37342534)

That is neither here nor there. If you do not like the tax code work to change it, instead of just being a tax cheat.

If California did not have to prop up the red states it would not have such high state taxes. Federal taxes are a losing proposition for California and many other money making states. That does not mean California citizens should not pay their federal income tax.

Re:[sigh] (1)

rubycodez (864176) | more than 2 years ago | (#37342624)

haha "Tax cheat", the California government are the cheats and thieves, spending into a hole. why bother with hopeless effort to bail them out?

Re:[sigh] (0)

Anonymous Coward | more than 2 years ago | (#37342232)

Good. Get out. I don't understand why any conservative/TEA party person would want to live in CA. You know what you are getting into, you have to adapt to the culture.

It has been nice not having sales taxes on-line, but it can't last forever.

Re:[sigh] (4, Insightful)

DJRumpy (1345787) | more than 2 years ago | (#37342322)

Why should Amazon be able to avoid paying taxes while any other business in the state does?

I'm sick of corporate America being treated like royalty. They have more voting power, more funds, lower taxes, and seemingly unlimited resources to control the political landscape to the detriment of the consumer. When they start hiring and stop giving all their money to their CEO's, perhaps I might have more sympathy, but until I see they are actually interested in supporting the states and municipals where they do business, then I can't seem to shed a tear for them.

Re:[sigh] (2)

betterunixthanunix (980855) | more than 2 years ago | (#37342424)

Why should Amazon be able to avoid paying taxes while any other business in the state does?

Why should California be able to levy a tax on a business that is run out of Washington? Oh, wait...

http://en.wikipedia.org/wiki/Quill_Corp._v._North_Dakota [wikipedia.org]

Re:[sigh] (0)

Anonymous Coward | more than 2 years ago | (#37342458)

Because Amazon has a physical business in California? Just a guess...

Re:[sigh] (2, Insightful)

Anonymous Coward | more than 2 years ago | (#37342476)

Because they do business in California.

I love how conservatives love states' rights, until the states decide to go ahead and do something they don't happen to agree with personally.

Re:[sigh] (5, Insightful)

teg (97890) | more than 2 years ago | (#37342392)

One more reason to leave California.

If you pay the use tax as you are supposed to, this doesn't matter. If it does matter, then it shows the point of why Amazon should collect sales tax...

Re:[sigh] (1)

tunapez (1161697) | more than 2 years ago | (#37342532)

Ziiiing!

Wait...er.... I forgot, this is /. Self-interest trumps rationale.

Re:[sigh] (1)

h4rr4r (612664) | more than 2 years ago | (#37342610)

Mod parent way the fuck up.
If it matters you are a damn tax cheat.

Actual link to the article (2)

very1silent (2194890) | more than 2 years ago | (#37342054)

The actual article is here:
http://www.mercurynews.com/california-budget/ci_18849537 [mercurynews.com]
You do need to log in though.

Given the fact that there is a supreme court ruling from the Sears days which is in Amazon's favor, I'm really surprised by this.

Re:Actual link to the article (2, Insightful)

Anonymous Coward | more than 2 years ago | (#37342370)

Given the fact that there is a supreme court ruling from the Sears days which is in Amazon's favor, I'm really surprised by this.

The ruling "from the Sears days" is that if you aren't physically in the state, you aren't required to collect sales tax in the state.

Amazon's shipping company is in the state. They probably had a 50-50 shot at snowing over gullible juries and/or convincing courts that their shipping/warehousing/fulfillment company, wholly owned by Amazon, named Amazon, and shipping only things ordered from Amazon.com is actually not at all related to amazon.com, that is, until Bezos started telling the various state governments that he'd shut down these shipping companies that he and his company are totally not related to and have absolutely no power over, costing the state X jobs if they didn't stop demanding that amazon.com collect sales tax. That's probably around the time the corp lawyer tackled him and told him to kindly shut the fuck up.

Actually... (1)

Anonymous Coward | more than 2 years ago | (#37342090)

Sales tax is the way I want to pay taxes... I don't mind if it's like 25-30% either... but only if they'd repeal those pesky income and property taxes.

Re:Actually... (2)

CrimsonAvenger (580665) | more than 2 years ago | (#37342132)

but only if they'd repeal those pesky income and property taxes.

Never happen. They'll just add the sales taxes on top of the other taxes.

And in a few years, they'll try to set things up so you have to pay sales taxes in both your state of residence and the state you bought something in. They won't succeed for a while, but they'll keep at it till they do.

Re:Actually... (1)

jdgeorge (18767) | more than 2 years ago | (#37342516)

Define "they". You already pay sales tax, but on-line retailers have had a sweet deal for a long time, at the expense of the businesses that support your local economy.

Iit doesn't matter which state gets the sales tax for a transaction, or how much the tax is. The important thing is to settle the question and put the on-line retailers on the same footing as local retailers. On-line retail doesn't need what is effectively a government handout anymore.

Re:Actually... (0)

Anonymous Coward | more than 2 years ago | (#37342616)

Online businesses have had a sweet deal? Best I can tell, all they escape is sales tax. But in the meantime, have to deal with shipping.

It's ultimately the same. It's just that our States are all broke from spending more than they can take in, year after year, for as long as we can remember.

And of course, spending less is NEVER an option, so you go hunting for new, bullshit ways to collect taxes on people OUTSIDE your state.

Re:Actually... (4, Insightful)

Ruke (857276) | more than 2 years ago | (#37342240)

Sales tax is the most regressive form of taxation in the United States. If sales tax is 30%, that means the poorest of the poor are paying an effective tax rate of 30%, because they need to spend every penny they make in order to survive. Meanwhile, if you look at someone who makes $30 million a year, spends $2 million on taxable goods, and invests or saves the other $28 million, they end up paying an effective 2% tax rate.

It's obviously not "fair" to tax each person the same dollar amount. Why do people think it's "fair" to tax each person the same percentage? I'd call it most fair to impose the same financial burden on each person through taxes, which means that we're able to take a much, much larger percentage of a very rich person's income before they're seriously inconvenienced by it.

Re:Actually... (2)

Actually, I do RTFA (1058596) | more than 2 years ago | (#37342318)

Meanwhile, if you look at someone who makes $30 million a year, spends $2 million on taxable goods, and invests or saves the other $28 million, they end up paying an effective 2% tax rate.

Only if the purchase of securities/other investments was exempt from sales tax. Otherwise, it's simply a flat 30% tax.

Re:Actually... (1)

The Gaytriot (1254048) | more than 2 years ago | (#37342338)

Sales tax is the most regressive form of taxation in the United States. If sales tax is 30%, that means the poorest of the poor are paying an effective tax rate of 30%, because they need to spend every penny they make in order to survive. Meanwhile, if you look at someone who makes $30 million a year, spends $2 million on taxable goods, and invests or saves the other $28 million, they end up paying an effective 2% tax rate.

It's obviously not "fair" to tax each person the same dollar amount. Why do people think it's "fair" to tax each person the same percentage? I'd call it most fair to impose the same financial burden on each person through taxes, which means that we're able to take a much, much larger percentage of a very rich person's income before they're seriously inconvenienced by it.

On the other hand, the poorer person may spend most of their money on food and items which may not be taxed while the wealthier will be taxed on non-essential purchases.

Re:Actually... (1)

Ruke (857276) | more than 2 years ago | (#37342612)

In this case, you need to raise the tax rate even higher, to make up for lost revenues from "poor-people purchases," which, in turn, is going to end up reaming the dwindling middle class. The problem is, the wealthiest, are still going to come off way ahead with sales tax, no matter how you slice it. Those who can afford to give the highest percentage of their income as taxes are the same people who feel compelled to spend the lowest percentage of their income on taxable goods.

I've never understood why people seem to think it makes the most sense to simplify the tax system to only apply to sales tax. Why wouldn't it be simpler,fairer, to simplify it to apply only to income? Only to net-worth? I simply cannot understand why the self-styled "populist" movement is proposing tax systems which will benefit the top tenth-of-a-percent of the population, to the severe detriment of the lower 95%.

Re:Actually... (0)

Anonymous Coward | more than 2 years ago | (#37342380)

There -are- ways to deal with this. For example, food and clothing can be exempted from sales taxes (as in Massachusetts).

Re:Actually... (1)

teg (97890) | more than 2 years ago | (#37342528)

Meanwhile, if you look at someone who makes $30 million a year, spends $2 million on taxable goods, and invests or saves the other $28 million, they end up paying an effective 2% tax rate.

To play the devil's advocate here, they will pay the sales tax when they eventually use the money... I agree with your second point, though. And one of the main issues of today's tax rules, is deductions and other strange issues like why compensation for hedge fund managers aren't income.

Amzon isnt dodging anything (3, Informative)

initdeep (1073290) | more than 2 years ago | (#37342096)

The consumers who are purchasing from Amazon and sites like it are dodging sales tax, not Amazon.
Those people have a LEGAL requirement to self-report those taxable items on their yearly tax returns and pay any and all sales tax due on said items at that time.
Just because those people aren't doing so, doesn't put Amazon and other online sites in the wrong.

Re:Amzon isnt dodging anything (0)

Anonymous Coward | more than 2 years ago | (#37342126)

Stop feeding the government!

Re:Amzon isnt dodging anything (4, Interesting)

Kenja (541830) | more than 2 years ago | (#37342156)

While thats true in theory, in actual practice the onus is on the retailer to collect sales taxes. The corner store here couldn't get away with not collecting sales taxes and then saying that it was up to their customers to deal with it. Frankly, I dont think there should be two sets of rules, one for brick and mortar stores and one for online. Especially when just about everything I order from Amazon ships from within the state. If I am in california and buy something from a company with a presence in California and my purchased items ship from California to me I should pay California sales taxes.

Re:Amzon isnt dodging anything (3, Insightful)

John Bresnahan (638668) | more than 2 years ago | (#37342260)

Should the corner store have to collect different sales taxes for the home state, home county and home city of every visitor who walks in and buys something from the store?

Re:Amzon isnt dodging anything (2)

Kenja (541830) | more than 2 years ago | (#37342296)

No, they should collect taxes based on the state they are doing business with. Just like the 7-11 in Texas collects different taxes then the one in California. Why should Amazon be different?

Re:Amzon isnt dodging anything (4, Insightful)

Jane Q. Public (1010737) | more than 2 years ago | (#37342498)

"While thats true in theory, in actual practice the onus is on the retailer to collect sales taxes."

No, it's not. In fact, if the retailer is in a different state, with no "physical presence" in the purchaser's state, then it is highly illegal -- unconstitutional in fact -- for the retailer to collect sales tax.

To get around this, states have enacted what they call "use taxes". But it is up to the individual -- very definitely NOT the retailer -- to report on, and pay, use taxes.

Re:Amzon isnt dodging anything (0)

Anonymous Coward | more than 2 years ago | (#37342180)

Horseshit. Before the Internet, interstate catalog sales were NEVER taxable. That the individual states have decided to get greedy and attempt to collect on sales tax for transactions out of their jurisdiction doesn't make it incumbent on the citizens to make it easy for them to do so. Shame on Amazon for caving on this.

Re:Amzon isnt dodging anything (0)

Anonymous Coward | more than 2 years ago | (#37342330)

Amazon was only "out of their jurisdiction" because of legal loopholes. Most of Amazon's engineer's were in California, but they managed to claim no presence? The bill Amazon was whining about was closing a legal loophole that was being exploited.

Re:Amzon isnt dodging anything (3, Insightful)

compro01 (777531) | more than 2 years ago | (#37342464)

Horseshit. Before the Internet, interstate catalog sales were NEVER taxable. That the individual states have decided to get greedy and attempt to collect on sales tax for transactions out of their jurisdiction doesn't make it incumbent on the citizens to make it easy for them to do so. Shame on Amazon for caving on this.

Horseshit yourself. They've always been taxable. The only difference is whether the tax is withheld by the seller or if the buyer has to include it on their income tax form.

You're wrong, Amazon is wrong, and that's all. (1)

Anonymous Coward | more than 2 years ago | (#37342182)

Amazon is in the wrong here, and I'm sorry you can't understand that.

Amazon, the beefy company that eats physical retail stores for breakfast and shits out their skeletons, needs to do it's goddamn part in this country.

Re:You're wrong, Amazon is wrong, and that's all. (1, Interesting)

betterunixthanunix (980855) | more than 2 years ago | (#37342518)

http://en.wikipedia.org/wiki/Quill_Corp._v._North_Dakota [wikipedia.org]

The only difference here is the relationship between Amazon and "subsidiaries" in California. Really though, states do not have the right to tax interstate commerce, only the federal government has that power. Sorry that the constitution got in the way here, but you know, it is the constitution.

Re:You're wrong, Amazon is wrong, and that's all. (0)

Anonymous Coward | more than 2 years ago | (#37342574)

Amazon doing its "goddamn part" in this country will inevitably result in Amazon declaring massive losses around 2013 because me and millions of other Californians will decide not to shop there. Congratulations, California.

I'll probably be making more purchases at Ebay from now on.

Re:Amzon isnt dodging anything (0)

Anonymous Coward | more than 2 years ago | (#37342192)

Just because a law is on the books doesn't make it legit. There are all kinds of laws on the books that are unenforced bacuase they are not legal.

Re:Amzon isnt dodging anything (0)

Anonymous Coward | more than 2 years ago | (#37342224)

Sales tax is taken at the time of purchase and done so by the seller, not reported on your tax forms for your yearly taxes. That would be a pain in the a** to fill out tax returns and compute that you owe thousands of dollars in non filed taxes from purchases. This would lead to so much fraud of, "I didn't purchase anything so I don't owe anything", that no state or federal gov't could keep up with.

Re:Amzon isnt dodging anything (1)

Ruke (857276) | more than 2 years ago | (#37342278)

A sales tax has officially and legally been levied against Amazon. If they try to change the law to make that tax no longer apply, I'd call that an attempt to "dodge" the tax.

Re:Amzon isnt dodging anything (1)

CrimsonAvenger (580665) | more than 2 years ago | (#37342480)

A sales tax has officially and legally been levied against Amazon. If they try to change the law to make that tax no longer apply, I'd call that an attempt to "dodge" the tax.

So, if New York were to pass a law requiring all residents of California pay New York income taxes, then Californians would be dodging that tax by trying to get that law overturned?

The Supremes have already ruled that you don't have to do Sales Taxes in any State you don't have a physical presence. Making a State Law that says you do is unconstitutional.

Note that the thing CA should have done is require the subsidiaries to pay Sales taxes. Which would have been legal (and probably is already being done), but they wouldn't get anywhere near as much money that way....

Re:Amzon isnt dodging anything (1)

The Gaytriot (1254048) | more than 2 years ago | (#37342288)

It's not just Amazon, either, what about all the 3rd party vendors who sell through Amazon? Although the argument for taxation here is obvious, I see a lot of vendors moving away from Cali because they'll be competing against vendors who are in states where they don't charge sales tax.

Re:Amzon isnt dodging anything (0)

Anonymous Coward | more than 2 years ago | (#37342456)

I don't mind paying sales tax on things. It pays for the services around me. Like roads/police/fire/etc...

What I would like to see is the sales tax UP front and IN the price (or at least shown...). Not after the fact. That way if something is advertised at 9.99 it really is 9.99 not 10.75 or something like that.

Also if they cut a deal with CA there are about 5 other states that are going to come looking for the same deal... I live in one of them.

Re:Amzon isnt dodging anything (0)

Anonymous Coward | more than 2 years ago | (#37342526)

Exactly. I would love it if I had to pay Amazon sales tax at checkout. It would save me the trouble of gathering up all of my online receipts and figuring out what I owe in use tax at the end of the year. The tax is owed whether people pay it or not. Why not change the onus of calculating and collecting the tax from the consumer to the seller and save us all a lot of trouble.

Re:Amzon isnt dodging anything (1)

fermion (181285) | more than 2 years ago | (#37342548)

Furthermore, that is like saying that moving into enterprise zone is dodging taxes. This is not the case. By virtue of geographic location the state of california given them special tax breaks not available to others not in the geographic zone.

The current situation is that sales tax cost jobs by reducing the amount that can be purchased with a given sum. States like Tx and Ca that insist on using sales tax as the basis for revenue are killing the private job market just to maximize the number of government jobs that can be offered. If we are to have a sales tax, make it durable goods or high value products that people tend to buy in state. Right now we have a situation in Tx where Perry does not want to pay tax on his yacht but expects the rest of us to pay taxes on our prepared food.

Expanding state sales tax is simply going to expand government jobs, not actually provide more services to the citizens. We will need whole new offices of tax collectors to chase the companies. There will not be much left for services.

Amazon vs. the CA legislature (1)

bigredradio (631970) | more than 2 years ago | (#37342116)

Like them or not, Amazon is a very forward thinking tech company with ambition, experience and a very well paid staff of top-notch Executives. They are up against an understaffed, underpaid group of Government workers. I doubt that they "folded". My guess is that they have a better plan up their sleeve.

Re:Amazon vs. the CA legislature (2)

compro01 (777531) | more than 2 years ago | (#37342212)

My guess is that they have a better plan up their sleeve.

Presumably they're thinking Congress will do something before the 1 year wait is over.

Re:Amazon vs. the CA legislature (3, Insightful)

nwf (25607) | more than 2 years ago | (#37342576)

My guess is that they have a better plan up their sleeve.

Presumably they're thinking Congress will do something before the 1 year wait is over.

Yea, congress is going to effectively increase taxes in an election year. Sure thing.

Re:Amazon vs. the CA legislature (1)

jmcbain (1233044) | more than 2 years ago | (#37342228)

This isn't a physical wrestling match. It's a company versus a state government. Yes, Amazon folded. End of story.

Re:Amazon vs. the CA legislature (1)

CrimsonAvenger (580665) | more than 2 years ago | (#37342230)

Well, note that they stopped pushing their referendum.

Which, unfortunately for California isn't the same as "there will be no referendum", since the private citizens of California might dislike the increase in prices also.

Note also that the legislature in California is trying to repass the law requiring Amazon to charge sales taxes to CA residents as "a matter of urgency" (I think that's the term they use), which cannot be overturned with a referendum.

Re:Amazon vs. the CA legislature (0)

Anonymous Coward | more than 2 years ago | (#37342520)

understaffed, underpaid group of Government workers

LOL

Re:Amazon vs. the CA legislature (0)

Anonymous Coward | more than 2 years ago | (#37342538)

They are up against an understaffed, underpaid group of Government workers

Ahem. You're talking about the most expensive, most powerful business (oops, government) in world history. Incompetent I can believe, but understaffed and underpaid? Excuse me while I laugh hysterically for half an hour straight.

just to be clear (4, Interesting)

loteck (533317) | more than 2 years ago | (#37342148)

Amazon also agreed to join with brick & mortar stores to begin lobbying Washington for a national internet sales tax. Think about that.

Re:just to be clear (1)

DanTheStone (1212500) | more than 2 years ago | (#37342628)

Come on people, where are his replies and +5 mod? This is obviously the key story here.

Re:just to be clear (1)

zero0ne (1309517) | more than 2 years ago | (#37342642)

Have any more information on this? I can do the general google search, but not sure which sources to really trust as some of them so far seem a bit cloak and dagger.

Borders is dead because of tax weasels like Amazon (1, Troll)

jmcbain (1233044) | more than 2 years ago | (#37342166)

The Borders brick and mortar bookstore chain is dead, 10000s of people lost their jobs, and I am out of a favourite place to explore books. All this occurred because customers flock to Amazon like buzzards to a carcass so they can buy merchandise without having to pay tax (outside of WA).

Level the playing field. Make Amazon enforce a sales tax just like every other company. Yes, I know buyers are supposed to pay an Internet use tax, but the reality does not match the theory.

And there is nothing wrong with paying taxes. It buys civilization. I pay $40K in taxes out of my salary each year. Do your fair share.

Re:Borders is dead because of tax weasels like Ama (1)

Kenja (541830) | more than 2 years ago | (#37342198)

No, they died when they tried to be a coffee shop way outside of town rather then a book store.

Re:coffee shop (1)

TaoPhoenix (980487) | more than 2 years ago | (#37342620)

Far from it - Borders did everything they could to avoid stocking sellable coffee shop items. Some friend of a High-Up pulled a deal to put a third rate food supply there. If I recall you couldn't even buy a coke or pepsi - it was all strange off-brands of expensive yuppy drinks.

Note to Self - go see what Barnes & Noble does for refreshments.

Re:Borders is dead because of tax weasels like Ama (1)

ErikZ (55491) | more than 2 years ago | (#37342272)

Sure. Define "Fair" first and I'll pay my fair share.

Also, how do you know you couldn't buy civilization for 5k in taxes?

Re:Borders is dead because of tax weasels like Ama (0)

Anonymous Coward | more than 2 years ago | (#37342302)

That's a bunch of crap. First, Borders (Waldens, et al) has had financial issues for years, even before online purchasing came around. Second, B&N and Borders did not try to compete, their prices always sucked. I never bought from Amazon becuause I could save $3 in tax, I bought because of price and the value added services such as reviews and recommendations.

Re:Borders is dead because of tax weasels like Ama (1)

DanTheStone (1212500) | more than 2 years ago | (#37342316)

I live in a state with no sales tax, and I still buy from Amazon. Explain me away, please.

Re:Borders is dead because of tax weasels like Ama (1)

Actually, I do RTFA (1058596) | more than 2 years ago | (#37342368)

I live in a state with no sales tax, and I still buy from Amazon. Explain me away, please.

The only states without sale taxes lack the kind of big city environs that Border's thrived in and/or you're too far from them? Unless you claim to live in Deleware, which everyone knows is a lie.

Re:Borders is dead because of tax weasels like Ama (1)

DanTheStone (1212500) | more than 2 years ago | (#37342508)

Up until a week ago I lived in Concord, NH, which has a going-out-of-business Borders in it at this very moment. I visited it every month or two but rarely bought anything, because their prices were too high. Everything I wanted was cheaper or available in better formats on Amazon.

Re:Borders is dead because of tax weasels like Ama (1)

betterunixthanunix (980855) | more than 2 years ago | (#37342332)

The Borders brick and mortar bookstore chain is dead, 10000s of people lost their jobs, and I am out of a favourite place to explore books. All this occurred because customers flock to Amazon like buzzards to a carcass so they can buy merchandise without having to pay tax (outside of WA).

...and Borders failed to adapt to a changed world. Why didn't Borders open up an online store? Why didn't Borders look into eBooks/eReaders the way Barnes & Noble did?

It is hard to feel sympathy for large companies that fail to keep pace with new technology. If you were lamenting the failure of small, family-owned, local bookstores, you would have more of a point.

And there is nothing wrong with paying taxes. It buys civilization. I pay $40K in taxes out of my salary each year. Do your fair share.

Amazon does pay taxes. The problem is that California wants to get taxes from a business that operates out of Washington. The tax should be managed at the federal level -- you know, the part of the government that the interstate commerce clause applies to? If you are curious, see Quill v. North Dakota.

Re:Borders is dead because of tax weasels like Ama (1)

John Bresnahan (638668) | more than 2 years ago | (#37342348)

Hmm...

Leveling the playing field would require local retailers to find out in which city, county and state each customer lives, and then charging them the appropriate sales tax. I'm sure the local donut shop would appreciate having to keep track of hundreds or thousands of different tax rates and applying and distributing them all correctly every time someone buys a donut.

Why is Borders better than Amazon or alternative? (4, Insightful)

SuperKendall (25149) | more than 2 years ago | (#37342364)

All this occurred because customers flock to Amazon like buzzards to a carcass so they can buy merchandise without having to pay tax (outside of WA).

I don't buy books from Amazon because I avoid taxes, I buy from them for the convince of wanting something and having it two days later without having to waste an hour to go get it. I like local bookstores for when I don't know what I want, and just want to browse... Borders did not deliver well on either use case.

Thus is Borders dilemma - why would I support them over Amazon? You get none of the happy feeling of supporting a small local bookstore. Yet you get none of the vastly larger selection that Amazon has. Borders were huge, but what was really in there? I always found a better selection either at a small local bookstore or as I said Amazon, and that was what really killed them.. there is no room in the middle for something inherently specialized where small local businesses can do a better job addressing regional tastes in books than a large chain.

Go to BN or go to the post office: It's a wash (0)

tepples (727027) | more than 2 years ago | (#37342444)

You still need to waste an hour to go to the post office and get it when there's nobody home to sign for the delivery. Compared to picking up a book at a Barnes & Noble store, it's more or less a wash.

Re:Go to BN or go to the post office: It's a wash (1)

mewshi_nya (1394329) | more than 2 years ago | (#37342622)

I haven't had to sign for delivery in 4 years of buying stuff from Amazon. Over 100 orders, and I've *never* had to sign for a single thing. Not even a computer.

And Borders' selection was never all that great. If I'm already near a bookstore, I'll go in, look around, see what looks fun, might even buy something; but if I have to go out of my way to get to a bookstore, screw it, that's what my Kindle is for. Guaranteed inventory vs. hopeful inventory -- which one do you think makes me feel less like I wasted my time?

Re:Borders is dead because of tax weasels like Ama (0)

Anonymous Coward | more than 2 years ago | (#37342378)

But I don't like your definition of civilization.

Re:Borders is dead because of tax weasels like Ama (0)

Anonymous Coward | more than 2 years ago | (#37342410)

What a load of crap. Make every other company have to pay FedEx, UPS, or whomever a shipping/handling fee that Amazon pays for our "free" shipping.

Re:Borders is dead because of tax weasels like Ama (1)

sehryan (412731) | more than 2 years ago | (#37342426)

Bullshit. I don't know anyone who is going to buy Amazon books over a brick and mortar over what would be a couple of dimes in sales tax. If that were true, then B&N would be out of business as well. Borders is out of business because their executives made poor business decisions, end of story.

No just lower prices (1)

ArchieBunker (132337) | more than 2 years ago | (#37342428)

The 10% savings on sales tax is a nice bonus but the real reason is Amazon offers the same items for 1/3 less than retail stores. How is that my problem? Makes a difference when a hardcover reference book is $99 at Borders plus sales tax when Amazon can sell the same thing for $66 without taxes and free shipping. Don't get me started on their $25 DVDs and $19 CDs that Walmart sells for way less...

Re:Borders is dead because of tax weasels like Ama (0)

Anonymous Coward | more than 2 years ago | (#37342474)

The Borders brick and mortar bookstore chain is dead, 10000s of people lost their jobs, and I am out of a favourite place to explore books .... because customers flock to Amazon ... so they can buy merchandise without having to pay tax (outside of WA).

Bullshit. I'm so tired of hearing this nonsense over and over again. Sales tax is a drop in the bucket. Retail stores have higher overhead that has to be paid for with a higher markup. I shop at Amazon because I am 50 miles away from the nearest bookstore, AND that Books-A-Million usually doesn't have what I want, AND even if it does, I'll end up paying more there (before taxes) than I would at Amazon, AND Amazon will deliver it to my doorstep within a couple of days.

To summarize, Amazon has a wider selection, at a lower retail price, and delivers to my door. Brick and mortar stores CANNOT COMPETE with that. If Amazon collects sales tax, I will still preferentially shop there. And so will many, many other people. Sales tax will not save brick and mortar stores.

Re:Borders is dead because of tax weasels like Ama (1)

BJ_Covert_Action (1499847) | more than 2 years ago | (#37342512)

All this occurred because customers flock to Amazon like buzzards to a carcass so they can buy merchandise without having to pay tax (outside of WA).

Actually all this occurred because I can buy shit on Amazon that I can't find in my local Borders bookstore. Couple that with the fact that I don't have to drive ten minutes to the Amazon store, I don't have to wait in line 10 minutes to checkout like I do at Borders, and I don't have to wander around a large, semi-organized floorspace to find the one book/author I want and Amazon becomes a much more pleasant shopping experience than Borders. Everyone I know that shops online does it purely for the convenience, and they typically aren't even aware that the are dodging sales taxes.

So, yeah, I don't think you can blame tax weaseling for online retailers kicking seven shades of shit out of the profit margins of brick and mortar stores.

Re:Borders is dead because of tax weasels like Ama (1)

Firehed (942385) | more than 2 years ago | (#37342562)

The only thing Amazon did that helped kill Borders is the Kindle - and it's hardly Amazon's fault that Borders couldn't keep up. I'd be astonished if sales tax made any appreciable impact on Borders' death.

I've placed Amazon orders from inside a Best Buy to get the better price*, but it's not worth the delay on books - certainly not over a dollar. On the rare occasion I found something of interest in dead tree form in any bookstore, I'd just buy it on the spot unless the Amazon price was very significantly lower. More often than not the difference was fifty cents or so. Big freaking deal.

* Because Amazon's price was lower, not because of sales tax. I did this many times while living in sales-tax-free NH. However, I have had big-ticket items shipped to my NH address while living in CA to avoid their absurdly high taxes. If the CA government was in any way remotely competent I'd agree with the "taxes buy civilization" idea, but that's just not the case here. Actually - scratch that. If any part of the government in this country was competent, I'd agree. Eliminate the waste, corruption, pensions, nepotism, and bullshit and we'll talk (I can deal with having someone I disagree with politically in office - it's not like they get anything done regardless. So long as "government contract" is always preceded by "lucrative", they can fuck right off)

Re:Borders is dead because of tax weasels like Ama (0)

Anonymous Coward | more than 2 years ago | (#37342568)

You think Borders died because people didn't want to pay taxes?!

I think you missed the boat.

The reason people flock to Amazon is because they provide an excellent storefront, with lots of options (not just books), and it's easy to do. For most folks, it has nothing to do with not paying taxes - it has to do with what is the best option.

Re:Borders is dead because of tax weasels like Ama (1)

nwf (25607) | more than 2 years ago | (#37342618)

The Borders brick and mortar bookstore chain is dead, 10000s of people lost their jobs, and I am out of a favourite place to explore books. All this occurred because customers flock to Amazon like buzzards to a carcass so they can buy merchandise without having to pay tax (outside of WA).

Please. Amazon's prices for books were much less than those of Borders, even without taxes. In fact, you could purchase books on Amazon cheaper than the clearance prices at Borders. Why pay $25 for a book when Amazon has it for $18? Same with music. I could buy a CD at Target for $14 or get it from Amazon for $10. Tax just isn't that high that I care to shop to avoid taxes.

Congress probably can't "take action" (1)

Jane Q. Public (1010737) | more than 2 years ago | (#37342186)

As another poster here has stated, there are high-court rulings from the past that clearly state several things about this, among them that a state has no power to tax a transaction that takes place in some other state. Thus the eventual creation of "use taxes", that tax residents of a state for goods that were purchased in that other state,, without actually taxing the transaction.

The problem is actually one of enforcement, since it is up to the individual resident to report on and pay their "use taxes". Which almost nobody does.

However, again as courts have repeatedly ruled, at all levels: difficulty of enforcing a law is not justification for infringing on rights.

Constitutionally, while Congress can "regulate" interstate commerce, it has no power to force any state to enforce (or even recognize) the laws of some other state, whether they be tax laws or any other kind.

Re:Congress probably can't "take action" (1)

Ruke (857276) | more than 2 years ago | (#37342402)

The problem is, if the purchase takes place over the internet, where can it be physically said to take place? The home of the purchaser? The place of business of the seller? The physical location of the server hosting the website, or hosting the credit-card-processing service?

Congress has said that taxes can be collected if the business has a physical presence in the state where the purchase takes place. Amazon tried to get around this by calling all of their places of business in California "subsidies." California is merely closing this loophole.

Good news (1)

Slash.research_Kat (2195516) | more than 2 years ago | (#37342202)

It's great to see a big corporation not being completely profit driven and screwing people over... wish they still had free student prime membership tho.

Re:Good news (1)

Spunkee (183938) | more than 2 years ago | (#37342314)

They're still completely profit driven and will screw people over to make one cent. They are obviously pulling some shady shit.

Re:Good news (1)

CrimsonAvenger (580665) | more than 2 years ago | (#37342550)

It's great to see a big corporation not being completely profit driven and screwing people over

What? You think Amazon is going to eat those CA sales taxes? Won't happen, the Californios will pay them (or not, if they're close enough to another State to get a PO Box in any other State. Or even use a false address, and have their books delivered to a friend next door as gifts).

The NY Times (1)

geoffrobinson (109879) | more than 2 years ago | (#37342236)

Based on the synopsis, are we supposed to infer some causation due to the New York Times editorial? "Oh no! An editorial that 99% of our users will never read was against us! What ever will we do?"

It makes no sense (1)

nedlohs (1335013) | more than 2 years ago | (#37342398)

Either a subsidiary does establish a physcial presence in the state for the parent company or it does not.

If it does then amazon should be collecting sales taxes for CA sales under the current system.

If it does not then CA passing law saying that it does it irrelevant since it is a Federal issue.

But clearly Amazon's lawyers know more than me about this. So can CA pass a law saying that "all companies who sell things to CA residents are now classified as having a physcial persence in CA"???

BS taxes (4, Insightful)

argStyopa (232550) | more than 2 years ago | (#37342404)

In case anyone forgot, the US gov't - and by extension the states - aren't automagically entitled to a piece of everything.

Property taxes are generally to provide for local services, police, fire, streets, education.
Income taxes are generally meant to fund the operation of government, and its (allegedly) limited functions.
Gas taxes are essentially a user fee, to fund use of the highway system (and ironically to help fund the poor struggling oil companies through tax breaks).
Sales taxes are likewise LOCAL in function - they're justified by the 'infrastructure' that allows commerce to happen.

So why should internet retailers pay local or state sales tax? Everything's already been paid for at least once.

In terms of the bandwidth needed to secure the transaction and the shopper, both the shopper (through his internet fees) and the vendor (through his bandwidth charges, etc) are already paying for the hardware - wires, property easements, hefty communication taxes. In terms of shipping the goods from the vendor to the customer, someone on one end or the other is paying postage that supposedly already covers this. The seller, through the price of his goods, covers his business costs, property taxes (and the concomitant services already covered therein), etc.

About the only thing that isn't explicitly or implicitly paid for in an internet sale is the bureaucracy involved in administering, levying, and collecting the tax. Put another way: without internet sales existing, government operates, and provides a certain level of services to the public. This should be covered by tax revenues. Now add internet sales to the picture. What specific service is the state providing that it didn't provide before? I can't think of a one. Sure, the police have started branching out their pedo squads to the interwebs, and the state Attorneys General have some more fraud cases to investigate, but I doubt either of those functions have been a net increase in manpower or services - rather, they've drawn resources from other functions already performed to add these to the mix.

Yes, cue the Liberal Left posters who cheerfully want to pay more taxes. I invite them to do so. But the fact is that the US and State governments are not entitled by their very existence to a piece of every transaction that takes place in this country.

We the people need to fund our government adequately, and we do so through a varied panoply of taxes. But a bewildering array of taxes doesn't mean that we need to sit back passively and let ourselves be double-dipped just because legislators have built too confusing a structure to figure out.

one-year moratorium (1)

pseudorand (603231) | more than 2 years ago | (#37342484)

> to repeal an online sales tax in exchange for a one-year moratorium on collecting the tax

Wait, who folded? If the tax isn't being collected, it sounds like California folded to me.

Legislature needs improvement (0)

Anonymous Coward | more than 2 years ago | (#37342554)

This legislature law is very poor, I agree with what a lot of people have already said in this thread.

http://www.salespider.com

There are bigger issues than doging taxes here. (1)

Anon-Admin (443764) | more than 2 years ago | (#37342578)

The problem they are running into is that technology has changed the way it is done.

In the past, company A was in NY and sold to person A in LA. If company A had a warehouse in LA then they had to collect sales tax. If everything was in NY then they only collected sales tax for the items sold to people in NY.

Enter the computer age. Company A is in NY but has web servers in data centers around the US. These servers are strategically placed to make sure that everyone in the US can get to there web page.
When an item is purchased by Person A in LA it is keyed in at there computer. A web server in LA processes the request and submits the Credit card info to a system in VA. The approval is returned to NY where it is processed into a shipping order and sent to the main warehouse in Tx for Shipping.

So, where was the sale at?
Was the sale made in LA where it was keyed?
Was the sale made in VA where the Credit Card was Processed?
Was it in NY where the company and there order processing systems are?
Was it made in Tx where the order was processed and the sale finalized?
Do they need to collect sales tax from people in La, Va, Ny, and/or Tx?
Do you think they should collect sales tax for every state some processing is done in?

If you agree with the last one then you are looking at La=4%, Va=5% , Ny=4%, Tx=6.25% so on a 100$ purchase you will have $19.25 in sales tax + Shipping. Where the same item from a store in La would only have 4$ in tax.

This puts internet based businesses at a major disadvantage over brick and motor local stores. IMHO it could cause a bigger dip in the economy as there are BILLIONS spent online every year.

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