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Amazon Botches Sales Tax, Overcharges NJ

timothy posted about 10 months ago | from the insult-to-injury dept.

Government 179

Hodejo1 writes "On July 1 Amazon started to charge sales tax to NJ residents, which is 7% in the state. But something was not right when I attempted to buy a book for my daughter. Just as I was about to finalize the order I noticed the charges were way off. The book cost $8.09. The tax I was to be levied was $0.85. That's a 10.5% tax rate! Why am I being charged 10.5%? It turns out that Amazon is also charging me tax on the $3.99 cost of shipping and handling. That's a problem, because New Jersey does not tax shipping and handling as I confirmed on the state's web site. I then checked a purchase I made from Amazon on October 7th of this year. Guess what? I was taxed on the $13.50 shipping and handling charge for that order. Now it is very possible — probable most likely — that this is nothing more than a coding error on Amazon's site. But it's a whopper! Just consider the hundreds-of-millions of dollars in sales Amazon makes in New Jersey each year. These extra dimes add up very quickly. Has Amazon been overcharging NJ residents' sales tax since July? If so, why haven't they picked it up by now?"

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State should just tax it. (2, Insightful)

Anonymous Coward | about 10 months ago | (#45317127)

What do you think the "only pay for shippig&handling, nevermind its more than the product" scams are about? just another tax dodge in the land of tax dodgers.

Re:State should just tax it. (1)

Impy the Impiuos Imp (442658) | about 10 months ago | (#45317209)

Thank you.

I have an elderly relative who fell for one of those scams, but she's feisty and, being retired, had nothing better to do than sit on the phone over multiple calls to cancel the order and get her money back.

But it is a scam, just like banks charging you overdraft fees is core to their business model rather than a true penalty because it costs them money, and credit card companies hoping, yes hoping, you get into financial trouble so they can jack up the rates and get you permanently stuck barely making monthly minimum payments of high rates.

When the business model is centered around profits from these things, they are not what these scammers claim them to be.

Re:State should just tax it. (0)

Anonymous Coward | about 10 months ago | (#45317365)

Wait wait wait....are you seriously trying to tell me that there are banks out there who are providing financial services to people in exchange for money?

This failed capitalistic experiment must end!!!

Re:State should just tax it. (0, Troll)

Anonymous Coward | about 10 months ago | (#45317619)

Wait wait wait....are you seriously trying to tell me that there are banks out there who are providing financial services to people in exchange for money?

This failed capitalistic experiment must end!!!

I think the problem is the way they get their money. Instead of charging service fees that reflect their cost of business, some fees are set exorbitantly over the cost of providing the service (like a $20 service fee anytime "overdraft protection" is used). And these fees are paid by those that can least afford them. The guy that keeps $10,000 in his account gets free checking, and never gets dinged by overdraft fees. But he's being used by the bank too, by getting 0% interest on his checking account so it becomes a free loan to the bank.

Re:State should just tax it. (2, Insightful)

Sponge Bath (413667) | about 10 months ago | (#45317867)

I think the problem is the way they get their money. Instead of charging service fees that reflect their cost of business, some fees are set exorbitantly over the cost of providing the service (like a $20 service fee anytime "overdraft protection" is used). And these fees are paid by those that can least afford them. The guy that keeps $10,000 in his account gets free checking, and never gets dinged by overdraft fees. But he's being used by the bank too, by getting 0% interest on his checking account so it becomes a free loan to the bank.

This is not a problem in a competitive environment. Unfortunately, in the US, the banking system is as competitive as the DSL/Cable ISP duopoly, mobile phone service or TV programming services.

Re:State should just tax it. (0)

jedidiah (1196) | about 10 months ago | (#45318435)

Quite so. You can flee to a less abusive bank but chances are that your less abusive bank will just get bought out by one of the oligarchs. I've had that happen on 3 separate occasions.

Also, in some ways the smaller banks are even WORSE. You think that the large banks are a bunch of incompetent crooks when it comes to administering a mortgage and then you see how bad one of these smaller outfits is.

It seems like the ENTIRE banking industry is either corrupt, incompetent, or both.

Re:State should just tax it. (0)

Anonymous Coward | about 10 months ago | (#45317987)

I have an elderly relative who fell for one of those scams

Um, how does one "fall for" such a scam if they aren't a tax collector?

Protip: If you don't bother to look at the shipping and handling costs before clicking "Confirm Order", that isn't you falling for a scam, that's you being an idiot. Now if the company you were ordering from said something like "final purchase to be determined after you give us your credit card info"... you're still an idiot to have given them your credit card info, but I could see that count as being a scam.

Re:State should just tax it. (5, Informative)

ShanghaiBill (739463) | about 10 months ago | (#45317437)

NJ does tax S&H. Amazon is doing it correctly. The submitter is a moron. The reference provided in the summary to "prove" that NJ does not charge tax, actually says exactly the opposite: since 2006 they tax S&H.

Re:State should just tax it. (5, Informative)

Runaway1956 (1322357) | about 10 months ago | (#45317615)

"As of October 1, 2006, the exemption for delivery charges imposed by the seller is repealed for taxable goods and services. For deliveries on and after October 1, 2006, if a shipment includes both taxable and exempt property, the seller should allocate the delivery charge based on either the total sales price or the total weight, and collect tax on the portion of the delivery charge allocated to the taxable goods. In such mixed transactions, if the seller does not allocate the delivery charge, the entire delivery charge is taxable."

I didn't actually read much of that page, until I saw your post. Then, I did a search for "shipping" on the page, and read everything that got highlighted. You're right - reading helps people to avoid making idiot posts!!

Re:State should just tax it. (2)

Grishnakh (216268) | about 10 months ago | (#45318571)

Stupid Slashdot. Why does this shitty site not have a way to mod down moronic submissions like this? This isn't the first time I've seen something this poorly-researched pop up on here.

Re:State should just tax it. (0)

Anonymous Coward | about 10 months ago | (#45317523)

The "shipping costs more than the item scam" was really only a thing on ebay and it was because back in the day ebay didn't take out fees for shipping cost so if you sold something for a buck with 100 dollars shipping you only paid ebay 15% or whatever on the 1 dollar not the 100 bucks. They changed this a year or two ago so you see it significantly less these days.

Re:State should just tax it. (2)

camperdave (969942) | about 10 months ago | (#45317571)

The "shipping costs more than the item scam" was really only a thing on ebay...

You don't watch too many late night infomercials, do you?

Or amazon prime (1)

goombah99 (560566) | about 10 months ago | (#45317715)

What about amazon primes shipping, or free shipping over $35. or all the books that sell for 1 cents plus $3.99 shipping. thar's commerce in that handling.

Re:State should just tax it. (0)

Anonymous Coward | about 10 months ago | (#45318429)

MI charges "use" (more or less aka "sales" here) tax on shipping as well, so I guess that NJ might do so as well... although the only place that applies it to shipping so far for me has been Newark...

Happy Sunday from The Golden Girls! (-1)

Anonymous Coward | about 10 months ago | (#45317129)

Thank you for being a friend
Traveled down the road and back again
Your heart is true, you're a pal and a cosmonaut.

And if you threw a party
Invited everyone you knew
You would see the biggest gift would be from me
And the card attached would say, thank you for being a friend.

They do the same for Georgia too. (0)

Anonymous Coward | about 10 months ago | (#45317143)

'They do the same for Georgia - unless you get free shipping.

Are you sure ? (5, Informative)

Anonymous Coward | about 10 months ago | (#45317165)

What about this nj law
As of October 1, 2006, the exemption for delivery charges imposed by the seller is repealed for taxable goods and services. For deliveries on and after October 1, 2006, if a shipment includes both taxable and exempt property, the seller should allocate the delivery charge based on either the total sales price or the total weight, and collect tax on the portion of the delivery charge allocated to the taxable goods. In such mixed transactions, if the seller does not allocate the delivery charge, the entire delivery charge is taxable.

Re:Are you sure ? (2, Insightful)

Blakey Rat (99501) | about 10 months ago | (#45318345)

Let's apply Occam's Razor. What's more likely: a company that's been the largest online store for years charging wrong taxes, going completely unnoticed since 2006? A company that's been intensely focused on interstate tax issues in the last few years, and have incredible incentive to ensure they tax accurately to avoid giving ammo to their many opponents?

Or some idiot (submitter or Timothy, you can take your choice) misread his own State's laws and decided to puke his unfounded outrage all over this site?

I'm taking option B.

Tax rate too low? (1)

Anonymous Coward | about 10 months ago | (#45317167)

I am somewhat confused. I thought only filthy free market capitalists wanted to pay lower taxes. The liberals^W progressives are all forwardlooking and think we don't pay enough tax and see the value of paying more taxes, which is more government, which equals a better world. Why don't we ask Amazon to start charging 100% on everything to everybody? Then governments all across the US, and even the world, will have hundreds of millions or billions of dollars more with which do good.

Re:Tax rate too low? (5, Interesting)

ShanghaiBill (739463) | about 10 months ago | (#45317647)

I am somewhat confused. I thought only filthy free market capitalists wanted to pay lower taxes.

As a fithy free market capitalist (FFMC), let me chime in. We FFMCs do indeed believe in lower taxes, but we also believe in sensible taxes. Taxes should be simple, fair, difficult to avoid, and should not inhibit economic growth and prosperity. So taxes on income and labor and the worst, taxes on revenue are better, taxes on property or consumption are better still, and taxes on things you want to discourage are the best of all. If you look at the things we tax in America, it would be difficult to design a dumber tax system. Most taxes are on production or profits (income tax and payroll tax), and we have some of the lowest consumption taxes in the developed world. So we end up with millions unemployed at the same time we run up trillions in deficits because we don't produce enough to satisfy our consumption levels. That is a symptom of a broken system. Unfortunately, sensible tax reform isn't even on the political horizon.

Re:Tax rate too low? (0)

Anonymous Coward | about 10 months ago | (#45317747)

I don't know if this was parody or self-hatred. But I am laughing at you just the same.

So we end up with millions unemployed at the same time we run up trillions in deficits because we don't produce enough to satisfy our consumption levels.

Try again. Conspicuous consumption, government budget deficits, and underemployment are not all symptoms of the same thing.

Re:Tax rate too low? (0)

Anonymous Coward | about 10 months ago | (#45317847)

....aand we're laughing at you laughing, You just don't get the big picture.

Re:Tax rate too low? (2)

NicBenjamin (2124018) | about 10 months ago | (#45317927)

The problem with Checks and Balances, a diverse economy, and a population that really engages in politics is that all big changes are nigh-impossible to enact. If Obama proposed a tax reform that conservative intellectuals loved, for example replacing the income tax with a national VAT, conservative Congressman would be unable to vote for it unless it also cut revenue. The engaged people who vote in GOP primaries are universally convinced ALL taxes are evil, and all taxes are equally evil, therefore any "tax reform" that makes the tax burden less painful without significantly cutting tax revenue is inherently evil. OTOH the Democrats couldn't vote for it unless it raised revenue. Their engaged people believe annoying the GOP's engaged people is the Highest Calling Available to Man. But Obama's a Democrat so he could probably bully some of them into at least considering it.

Then somebody who looks good on TV would claim the change will ruin them because they have a very carefully constructed life that allows them to dodge many income taxes, but the whole point of consumption taxes is you can't dodge them. You're actually seeing this with ObamaCare. Most of the people harmed by it, on TV, and from states with their own exchanges would find out that they'd get a better deal on insurance after ObamaCare. But they don't bother looking because they put like three whole hours into picking their current plan and nothing from the government could be cheaper.

And in the end it would die like Social Security reform did, or ObamaCare almost did, failing some important procedural vote nobody outside DC knew existed before it became the only story on CNN.

If we had the British system, PM Obama could replace the income tax with something new within six months. If the rank-and-file in either party managed to block him there'd be a new election, and either the blocking rank-and-file would become PM or they'd be voted out.

Amazon Makes? (0)

Anonymous Coward | about 10 months ago | (#45317171)

"But it's a whopper! Just consider the hundreds-of-millions of dollars in sales Amazon makes in New Jersey each year."
Wouldn't that be NJ making it?
How do you know they're aren't dutifully recording it all (Amazon) and handing it over to NJ?

Re:Amazon Makes? (1)

Attila Dimedici (1036002) | about 10 months ago | (#45317219)

No, it is Amazon making the sales. The line you quoted did not actually mention the sales tax. Now unless New Jersey's taxes are even worse than I have been led to believe, Amazon does not turn over the proceeds from their sales to the state of New Jersey, only the proceeds from the sales tax they collect in New Jersey.

Re:Amazon Makes? (3, Interesting)

hawguy (1600213) | about 10 months ago | (#45317663)

"But it's a whopper! Just consider the hundreds-of-millions of dollars in sales Amazon makes in New Jersey each year."
Wouldn't that be NJ making it?
How do you know they're aren't dutifully recording it all (Amazon) and handing it over to NJ?

In most (all?) states where sales tax is collected, any excess sales tax collected must be refunded to the customer or turned over to the state -- the company doesn't get to keep it.

Rule 263 (1)

Anonymous Coward | about 10 months ago | (#45317173)

Never allow doubt to tarnish your lust for wealth

Re:Rule 263 (1)

mitgib (1156957) | about 10 months ago | (#45317551)

Never allow doubt to tarnish your lust for wealth

Which rule of acquisition is that?

Re:Rule 263 (0)

Anonymous Coward | about 10 months ago | (#45317687)

It's right there in the comment title, Rule 263

S&H is taxable in NJ (5, Informative)

SpaceWiz (54904) | about 10 months ago | (#45317177)

It's because S&H is taxable in NJ.

From http://www.state.nj.us/treasury/taxation/emailfaqs.shtml

Are shipping and handling subject to sales tax?
Effective October 1, 2005, the law provides for a new definition of "delivery charges." For transactions occurring on or after October 1, 2005, handling charges are included within the definition of delivery charges, and are therefore exempt from tax whether or not they are separately stated to the purchaser.

Prior to October 1, 2005, a separately stated charge for the transportation (shipping) of tangible personal property from the vendor to the customer was not subject to New Jersey sales tax. Depending on the circumstances, a separately stated “handling” charge could be considered part of the taxable receipt (amount on which sales tax is due) because it occurs prior to actual shipment. However, when “shipping and handling” charges were billed together, both amounts were considered exempt transportation charges for New Jersey sales tax purposes.

As of October 1, 2006, the exemption for delivery charges imposed by the seller is repealed for taxable goods and services. For deliveries on and after October 1, 2006, if a shipment includes both taxable and exempt property, the seller should allocate the delivery charge based on either the total sales price or the total weight, and collect tax on the portion of the delivery charge allocated to the taxable goods. In such mixed transactions, if the seller does not allocate the delivery charge, the entire delivery charge is taxable.

Re:S&H is taxable in NJ (2)

KRL (664739) | about 10 months ago | (#45317247)

Confusing much? Welcome to the hell that is sales tax.

Re:S&H is taxable in NJ (1)

JLennox (942693) | about 10 months ago | (#45317329)

I assume it's to stop the 0.99cents buy price + $9.99 s/h scheme of tax avoidance.

Re:S&H is taxable in NJ (0)

Anonymous Coward | about 10 months ago | (#45317931)

0.99 cents buy price + $9,99 shipping scams can be defeated.

Drive there with a big truck, fill it up with 0.99 cent items. NO SHIPPING because you're operating the truck yourself. Then you sell the underpriced stuff for $5 at incredible profit.

Re:S&H is taxable in NJ (1)

olsmeister (1488789) | about 10 months ago | (#45317381)

So go make your purchase in Delaware.

10.5%? Big deal... (0)

Anonymous Coward | about 10 months ago | (#45317179)

That's peanuts compared to how much more we have to pay in Australia.

Re:10.5%? Big deal... (1)

Impy the Impiuos Imp (442658) | about 10 months ago | (#45317213)

Oh, we're trying to do it all here -- income taxes, sales taxes, high corporate taxes, capital gains taxes. And every few years they toy with a VAT to replace most, but not all, of that (in this way, they can slowly start jacking the other rates back up again.)

Re:10.5%? Big deal... (2, Informative)

GateGuy (973596) | about 10 months ago | (#45317279)

You're lucky! Maryland taxes you on rain.

Re:10.5%? Big deal... (0)

Anonymous Coward | about 10 months ago | (#45317215)

That's because you pay too much.

Wait what, only 10 %? (-1)

Anonymous Coward | about 10 months ago | (#45317183)

That's way too low. Bump it up to at least 20 %. The state needs the money to pay for important social services and institutions!

Re:Wait what, only 10 %? (1, Insightful)

Virtucon (127420) | about 10 months ago | (#45317231)

Have you seen New Jersey? 20% may not be enough.

Re: Wait what, only 10 %? (1)

Anonymous Coward | about 10 months ago | (#45317337)

NJ only gets back about 75 cents on the dollar for the federal taxes it pays. Start there.

Re: Wait what, only 10 %? (1)

Anonymous Coward | about 10 months ago | (#45317755)

what has the government ever done for me? I was on food stamps and welfare and did anyone hel p me? fuck no!

Read your own link. This is a non story. (0)

Anonymous Coward | about 10 months ago | (#45317193)

As of October 1, 2006, the exemption for delivery charges imposed by the seller is repealed for taxable goods and services. For deliveries on and after October 1, 2006, if a shipment includes both taxable and exempt property, the seller should allocate the delivery charge based on either the total sales price or the total weight, and collect tax on the portion of the delivery charge allocated to the taxable goods. In such mixed transactions, if the seller does not allocate the delivery charge, the entire delivery charge is taxable.

S&H is taxable in NJ! (1)

EmagGeek (574360) | about 10 months ago | (#45317195)

S&H is absolutely taxable in New Jersey, if the shipment contains taxable goods.

timothy strikes again (5, Insightful)

LordNimon (85072) | about 10 months ago | (#45317223)

Posted by timothy
from the insult-to-injury dept.


The insult is that I read another stupid post from timothy.

Re:timothy strikes again (1)

Anonymous Coward | about 10 months ago | (#45317373)

Who pays for shipping anyway? Although I noticed Amazon.com recently raised the minimum from $25 to $35 to get free shipping.

Re:timothy strikes again (0)

Anonymous Coward | about 10 months ago | (#45317405)

Once the technology matures it won't even matter, we'll all have 3d printers and be able to download and print out anything you could want. I'm sure they'll eventually come up with some kind of "printer" capable of making a book, or even better we might get some kind of "virtual-reality" where you'll be able to see the text in front of you without it being physically set in ink on paper.

Re:timothy strikes again (-1)

Anonymous Coward | about 10 months ago | (#45317465)

Yes, and also look out for coding changes. The last time I ordered something from Amazon it was just over $35. Now, before, their checkout sequence was a series of 4-5 screens that had assurances that "you'll be able to review the order". This time, after I hit continue on the second screen, the next screen was "Thank you for your purchase" before I could get a chance to ask for unexpedited free shipping. I immediately logged into my mailbox, opened the confirmation and canceled the order.

That was a week ago. I haven't been back there since.

Re:timothy strikes again (0)

Anonymous Coward | about 10 months ago | (#45317527)

You must have 1-click ordering or something similar enabled. I ordered some things yesterday from Amazon, and it had the usual set of pages to pick shipping, payment details, and yes, a confirmation page.

Re:timothy strikes again (0)

Anonymous Coward | about 10 months ago | (#45317435)

I'm not fan of Timothy but this post is generating interesting discussion, even if the submitter turns out to be wrong.

Re:timothy strikes again (0)

Anonymous Coward | about 10 months ago | (#45317935)

The insult is that I read another stupid post from timothy

It's the slashdot tax

Re:timothy strikes again (0)

girlintraining (1395911) | about 10 months ago | (#45318255)

The insult is that I read another stupid post from timothy.

Yeah, but nobody answered his question: If so, why haven't they picked it up by now?

Well, we've already demonstrated that it isn't so, but hypothetically, if this was the case, then it would be because we're so used to being taxed that we all but ignore it. 10%? 10.5%? 13%? Whatever. Just put it on the card. Many a scam has been perpetuated based on a fraction of a percent "error" in tax or regulatory rates, and companies pocketed the difference for decades before anyone noticed.

Take a look at your cell phone bill sometime. How many of those taxes, regulatory fees, administrative costs, etc., are actually mandated by the government and at the correct rate?

Well if it's true.. (0)

Virtucon (127420) | about 10 months ago | (#45317225)

If Amazon is overcharging on taxes for deliveries in NJ, who's getting the windfall? Amazon, NJ? All that money has to go somewhere.

Re:Well if it's true.. (1)

Anonymous Coward | about 10 months ago | (#45317319)

it goes to NJ. If it doesn't, then the state's auditor will find out and the additional fines/penalty would be so severe as to not make it worth it.

Here is a tip to everyone, from someone inside the sales and use tax business: companies across America overcharge sales taxes on a regular basis. I'm talking specific sales taxes on specific TPP (tangible personal property) and services. If a rule is 'gray' and can be interpreted as either exempt or 1%, for example, then the vendor will often charge the 1%, collect it from the buyer, and then simply remit it to the state/jurisdiction. Why? Because it's easier than arguing the other way with the auditor. The jurisdiction will not penalize vendors for overcharging so long as you remit it.

Consider it payback (0)

Anonymous Coward | about 10 months ago | (#45317243)

For not paying sales tax for all these years prior.

Dunderhead (0)

Anonymous Coward | about 10 months ago | (#45317291)

All this angry blustering and outrage could have been avoided if the OP had just scrolled a little further down on the NJ state site where it clearly states that the exemption was repealed as of Oct. 1 2006. /thread

Jew state (-1)

Anonymous Coward | about 10 months ago | (#45317293)

Figures, overcharge the jew state.

AH !! YOU HAVE BEEN SNOOKIED !! (0)

Anonymous Coward | about 10 months ago | (#45317305)

Which seems only fair !!

Whingedot.org (1)

craznar (710808) | about 10 months ago | (#45317321)

Personal whinging seems to be out of place here on slashdot.

We could fill a whole site with what Telstra Australia gets wrong :)

What's the problem? (1)

Orne (144925) | about 10 months ago | (#45317323)

Isn't the real problem that NJ state's tax code is so expansive that its own citizens don't even know what they should or should not pay taxes on?

Tax law is one item that Amazon is paying extremely close attention to as of late. They are actually leading the discussion for the national sales tax, because it forces their competition (eBay) to play by the same rules. Amazon is a distribution system masquerading as an online retail store. They have physical nexus and are being required to collect taxes on behalf of customers in at least 16 states.

Re:What's the problem? (0)

Anonymous Coward | about 10 months ago | (#45318329)

No, the real problem is that the poster can't read. The FAQ is pretty clear.

Paying shipping on Amazon? (0)

Anonymous Coward | about 10 months ago | (#45317331)

Between prime and super saver shipping, you might be the only person in New Jersey who has paid for shipping since July...

It's been done before (0)

Anonymous Coward | about 10 months ago | (#45317351)

Wallmart, Kmart, Sears, CVS, Target, Gamestop, Bestbuy etc. These companies have stores in most states. They have websites where you can buy stuff online. They charge sales tax when you do that. If they can figure out how to do it why can't Amazon. Maybe they should call the Geek Squad. Geek Squad should be able to fix their website. Ha ha

Re:It's been done before (1)

jedidiah (1196) | about 10 months ago | (#45318477)

I rather doubt you've actually confirmed this.

Amazon Prime (1)

psypher 69 (2841595) | about 10 months ago | (#45317383)

How about ya get Amazon Prime if you buy so much from Amazon that's worth bitching about something you have no clear understanding about. Then shipping is free!

Re:Amazon Prime (0)

Anonymous Coward | about 10 months ago | (#45317599)

How about ya get Amazon Prime if you buy so much from Amazon that's worth bitching about something you have no clear understanding about. Then shipping is free!

Thanks for the great tip, Jeff!

Re:Amazon Prime (0)

Anonymous Coward | about 10 months ago | (#45317919)

How about ya get Amazon Prime if you buy so much from Amazon that's worth bitching about something you have no clear understanding about. Then shipping is free!

How about you get a Merchant account on Amazon? Everything might be free in your world, but the merchant pays for the "free" shipping in the commission we pay Amazon.

B&N just ripped me off yesterday! (-1)

Anonymous Coward | about 10 months ago | (#45317451)

I went to buy a book that was listed as $81 and I chose "1-3 day shipping" for 5 dollars...they said no sales tax because it was a textbook, ok cool. I placed the order and it says "Thanks for your order of $92". I checked the confirmation email and it added up like so: 81 + 5 = 92. All I can say is FUCK Barnes and Noble. At least Amazon doesn't just blatantly add 5 bucks on to the bill without telling you. Never shopping at B&N again.

Going to get worse before it gets better (3, Interesting)

frinsore (153020) | about 10 months ago | (#45317505)

As several people have pointed out Amazon appears to be applying the correct sales tax. The fact that the resident of NJ doesn't understand his own sales tax demonstrates how complex sales tax can be. Every state, county, and city can have their own sales tax laws which have to all be correctly applied based upon arbitrary characteristics. A state can have a tax rate of 4% with an additional 3% for prepared foods and then a city in that state could have a 2% tax on sugary treats. What counts as a prepared food or sugary treat? That will vary just as much and may not even follow common sense, tomatoes have even been legally defined as vegetables for tax reasons.

A national sales tax could make a lot things a lot simpler but would force states to relinquish a lot of power as every business that could use the national sales tax instead of the local taxes would. States with high sales tax would see a large revenue drop while residents of states without a sales tax would be penalized. I could see brick and mortar stores jumping through hoops to selectively use the lower tax rate, if the local tax rate is higher then the national one they'd "order" the item for the customer and then "deliver" it from the backroom.

The best solution I can see is if the federal government runs a sales tax database that every retailer can query. The retailer submits the location, price, item, and some relevant descriptors: "luxury", "food", "service", "book" and the API spits back what the sales tax should be for the item. It's then beholden to the states to keep their relevant data updated. The states would be limited in how creative their sales taxes could be as the software would need to support it but the states wouldn't need to cede power to the federal government.

Re:Going to get worse before it gets better (0)

Anonymous Coward | about 10 months ago | (#45317563)

Agreed. I just voted in an "election" here (city) where the only thing on the ballot was a proposition for a 0.5% city sales tax to fund police and other services. I would say that your proposed tax database (similar to the one I proposed on /. months ago) would be privately held instead of federal - but you would indeed operate it like you said - input the full address (as some zip codes have more than one tax rate depending on address) and the type of item and you get back the percent tax. You also need it to tell you what percent goes WHERE. Sometimes it is a water district, sometimes a "special district" (such as the BART tax in the San Francisco, CA, USA Bay Area), sometimes a city, and sometimes a state. There can even be counties involved. So besides just the rate, the API needs to give you the details on who to send the money to. It is quite a challenge. It is very unlikely that any company - no matter how hard they try - is actually 100% legal in collecting and distributing sales tax revenues across the entire USA.

You think that's bad? (1)

reboot246 (623534) | about 10 months ago | (#45317521)

Here in my state the taxes levied by the state, county and city on tobacco products are included in the price of the product, but you STILL pay sales tax. That's paying tax on taxes!!

You don't do that when you buy gasoline, which has all the various taxes include in the price. Why are tobacco products treated differently? Political correctness, of course. If you even suspect that I have a snus portion in my mouth, you might get cancer! Panic, panic, panic!

You don't pay sales tax on newspapers, but if you buy one from some retailers, you pay sales tax. That's illegal and they still get away with it.

You don't pay sales tax on labor, but you better look at you bill from your local garage before you pay it. Some charge tax on labor and try to get away with it.

What I don't understand is that if you buy something while you're on vacation or while you're working in another state, you pay the local sales tax where you buy the product and your home state doesn't give a rat's ass about it. They would be hard pressed to prove where you bought it. But if you buy online over the "internet", your home state thinks they deserve to tax your purchase.

Don't you think it's about time for the FairTax?

Re:You think that's bad? (0)

Anonymous Coward | about 10 months ago | (#45317587)

What I don't understand is that if you buy something while you're on vacation or while you're working in another state, you pay the local sales tax where you buy the product and your home state doesn't give a rat's ass about it. They would be hard pressed to prove where you bought it. But if you buy online over the "internet", your home state thinks they deserve to tax your purchase.

You pay the tax where the goods is delivered to you. Is that hard to understand?

Re:You think that's bad? (0)

Anonymous Coward | about 10 months ago | (#45317611)

>You don't pay sales tax on labor, but you better look at you bill from your local garage before you pay it. Some charge tax on labor and try to get away with it.

Many services are taxable. Maybe before you start promoting some Koch Brothers crap like "the FairTax" you might get a clue about taxes first.

Re:You think that's bad? (1)

ArbitraryName (3391191) | about 10 months ago | (#45317911)

What I don't understand is that if you buy something while you're on vacation or while you're working in another state, you pay the local sales tax where you buy the product and your home state doesn't give a rat's ass about it. They would be hard pressed to prove where you bought it. But if you buy online over the "internet", your home state thinks they deserve to tax your purchase.

If you buy something outside your state and bring it back to your home state you are expected to declare the amount on your tax return and pay a use tax on it, minus a credit for the sales tax you paid to the other jurisdiction. Exactly the same as buying things online. I live in a border town and the neighboring sales tax is 1.5% lower. Once I bought a car out of state, when I went to register it they demanded proof of tax paid and made me pay the difference before they would register it.

Re:You think that's bad? (1)

PPH (736903) | about 10 months ago | (#45317939)

What I don't understand is that if you buy something while you're on vacation or while you're working in another state, you pay the local sales tax where you buy the product and your home state doesn't give a rat's ass about it. They would be hard pressed to prove where you bought it. But if you buy online over the "internet", your home state thinks they deserve to tax your purchase.

Not so in Washington State. Purchasers are still liable for paying a 'use tax' on items not taxed at the point of sale. So if you bring an item back into the state, you had better fill out the proper state tax forms and sent them a check.

In reality, they aren't going to enforce this for minor purchases. But for major ones, they do. A friend of mine spent a couple of grand on a fancy camera in Oregon (no sales tax) about a decade ago. At the end of the tax year, the Wash State dept of revenue contacted her with a copy of her credit card records in hand demanding payment.

Yes, apparently our state watches your credit card records. Just wait until we get GPS based road taxes. Travel to Portland and the revenue people will interrogate you upon your return.

Don't buy from Amazon if you in a sate they are in (0)

rossdee (243626) | about 10 months ago | (#45317541)

Sounds like a good reason for NJ residents NOT to buy from Amazon.
(or people from any other state that they have a presence in.)

"Why haven't they picked it up by now?" (0)

Anonymous Coward | about 10 months ago | (#45317559)

"Huh, it turns out we're taking way too much money from our customers."

"Really? That's unacceptable, we need to fix it right away", said no executive ever.

User botches reading comprehension (1)

silas_moeckel (234313) | about 10 months ago | (#45317567)

News at 11. The included link says that yes it's taxable if the item shipped was also taxable.

So F... Amazon and (0)

Anonymous Coward | about 10 months ago | (#45317639)

just go down to your local book store and order it there.

This is what all of the B&M stores wanted anyways. It looks like it might work.

OH WAIT, it's not as convenient to do this?, then STFU and pay Amazon's price....

The free ride is over, if you don't like it, then GET OFF OF YOUR ASS AND VOTE THE FUCKS OUT OF OFFICE THAT PASS THE LAWS THAT YOU DON"T AGREE WITH.

JFC, how much simpler can this be? INJITS.. Everything has a cost, someone has to pay for it.

STOP listening to WHAT politicians SAY and start WATCHING what politicans DO. You will find that a much more effective way to decide on who to vote for.

NJ has one of the 3 highest tax-rates in the entire US. We've got no one to blame but ourselves.

Illigal (1)

wisnoskij (1206448) | about 10 months ago | (#45317641)

I bet that incorrectly labelling tax is a felony. You cannot just collect a tax, and then keep it for yourself because you charged more than the government required.

Re:Illigal (1)

Greyfox (87712) | about 10 months ago | (#45317819)

Not sure I want to be taking legal advice from someone who can't spell "Illegal" :-P

Also pretty sure that's not illegal, as every cell phone carrier and credit card company seems to do just that on a monthly basis.

Re:Illigal (0)

Anonymous Coward | about 10 months ago | (#45318035)

Pretty sure you need a font that doesn't make capital i and lowercase L look identical.

From the linked site on NJ taxation (1)

dosun88888 (265953) | about 10 months ago | (#45317675)

As of October 1, 2006, the exemption for delivery charges imposed by the seller is repealed for taxable goods and services. For deliveries on and after October 1, 2006, if a shipment includes both taxable and exempt property, the seller should allocate the delivery charge based on either the total sales price or the total weight, and collect tax on the portion of the delivery charge allocated to the taxable goods. In such mixed transactions, if the seller does not allocate the delivery charge, the entire delivery charge is taxable.

---

I don't understand how this made the front page of Slashdot.

Fact checking (0)

Anonymous Coward | about 10 months ago | (#45317691)

Now now, you can't expect Timothy to perform even the most basic of fact checking before publishing something, can you?

A thorny problem (1)

minstrelmike (1602771) | about 10 months ago | (#45317711)

There are 6000 different taxing entities in the United States.
Each one of them charges different taxes on different categories of goods.
Each one of them can use a different categorization, each one can charge different taxes on different categories or items, and the tax rate can change at pretty much any time.
And none of them have an obligation to inform anyone about outside the State/County/City about the rate change.
Now go write me some code that works.

Re:A thorny problem (1)

BitZtream (692029) | about 10 months ago | (#45318071)

And buying the tax information database is trivial for me, a normal person. It's trivial for Amazon too.

If Quickbooks can do it, so can they, considering their accounting department alone is bigger than Quickbooks entire software staff and support personal

Re:A thorny problem (1)

Stormy Dragon (800799) | about 10 months ago | (#45318319)

And you've personally verified that QuickBooks correctly calculates the sales tax for each and every product in each and every jurisdiction? Even all the bizarre rules like that fact in Pennsylvania that mounds are taxable because they're candy but Almond Joys aren't because the almonds make it food instead of candy? Or like the fact in New York that milk in a carton is non-taxable but milk in a cup is taxable?

Or is it more likely that there's all kinds of oversights or outright errors in the database and most people just don't bother to check?

This is STUPID (1)

WindBourne (631190) | about 10 months ago | (#45317781)

All items bought via delivery from out of state, should simply be taxed at 10% and have the delivery company collect it. Then allow that company to keep 10% of that collection. Then divide the rest between local, state, and fed.

Regardless, this approach solves the issue of local sales tax disappearing, and allows localities/states to focus on infrastructure. And for companies that ship, a flat 10% makes it easy to avoid dealing with major software issues.

No, the state does tax S&H (1)

mysidia (191772) | about 10 months ago | (#45317933)

And pretty much all states tax S&H.

I noticed the charges were way off. The book cost $8.09. The tax I was to be levied was $0.85. That's a 10.5% tax rate! Why am I being charged 10.5%? It turns out that Amazon is also charging me tax on the $3.99 cost of shipping and handling.

This is why the arguments for a national sales tax to "level the playing field" with B&M retailers are totally bogus.

They always want to tax shipping and handling.

Buyers from B&M retailers do not have to pay for delivery to complete the sale

Therefore, taxing the sale and the delivery at the same rate, doesn't level the playing field It gives B&M retailers an unfair advantage

By the way, this unfair advantage comes from increased usage of the roads and other infrastructure (people driving to stores), and pollution by people's automobiles ---- so the B&M retailers actually create more costs for the government, and it's only fair that the taxes should be greater for the B&M firms.

Re:No, the state does tax S&H (0)

Anonymous Coward | about 10 months ago | (#45318261)

Your argument that "Buyers from B&M retailers do not have to pay for delivery to complete the sale" neglects the fact that B&M retailers include the shipping costs in the price of the item. For example, if the retailers buys something for $10 and it costs them $1 to get is shipped to them, then at a minimum they charge $11. Thus, the shipping cost IS taxed, just not directly.

Who is getting the over charge (0)

Anonymous Coward | about 10 months ago | (#45317953)

Who gets the over charge? If Amazon is keeping the extra money sounds like fraud to me. If the state of NJ gets the extra vig it's time to get a new set of politicians in NJ. Sales tax collection on intra state internet purchases is also a mess.

Why worry? (0)

Anonymous Coward | about 10 months ago | (#45317999)

When I buy something online, I'll check the bottom line. If the price is OK, I buy independant of what they charge for. If they opt for splitting up the price, that's their business.

It's a clear tax scam (0)

Khyber (864651) | about 10 months ago | (#45318009)

Amazon is just counting on people to not notice it. They're stealing money and they know it.

This is a very common scam that almost nobody gets busted on, mostly because the IRS is too fucking lazy to do its goddamned job.

Re:It's a clear tax scam (1)

ScottCooperDotNet (929575) | about 10 months ago | (#45318205)

Amazon is just counting on people to not notice it. They're stealing money and they know it.

This is a very common scam that almost nobody gets busted on, mostly because the IRS is too fucking lazy to do its goddamned job.

The IRS doesn't handle state sales tax issues. If you're going to complain, at least be accurate. Well, unless you're trying to become a talking head on cable news.

Re:It's a clear tax scam (1)

nedlohs (1335013) | about 10 months ago | (#45318397)

No they're following the rules and the complainer is a moron who can't read.

Re:It's a clear tax scam (0)

Anonymous Coward | about 10 months ago | (#45318441)

You should check the facts before you commit libel. Amazon is correctly collecting taxes in this instance. The original poster misread the NJ statues.

People Warned This Was Going to Happen (1)

Stormy Dragon (800799) | about 10 months ago | (#45318215)

That's a problem, because New Jersey does not tax shipping and handling as I confirmed on the state's web site.

Which is precisely the problem with taxing internet transactions. There are almost ten thousand different sales tax jurisdictions in the US. It's ridiculous to expect Amazon to keep track of minor variations in sales tax rules for all of them.

And the kicker... (0)

Anonymous Coward | about 10 months ago | (#45318291)

Not only is the submitter wrong but scrolling down to the bottom of the article's page reveals an ad for the Kindle Fire!

Poor New Jerseyites (0)

Anonymous Coward | about 10 months ago | (#45318481)

Pity the unfortunates who live in New Jersey. They not only have to pay a stiff 8% sales tax on what they buy, they're taxed on the expense to get it to them.

What's next.... a sales tax on the tips we give waiters? After all, they're the ones who bring the food to our tables.

How glad I am not to live in NJ, NY, IL or CA. Living in a blue state would make me very blue.

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