In California, Amazon Pushes Hard to Kill a Tax

[TomCADem]

Source: NY Times

The struggling state of California thinks it has found gold in taxing e-commerce. But that money is proving much more elusive than it seemed just a few months ago.

Amazon.com, the Seattle-based retailer that is the state’s chief target, is fighting back with all the resources of a company whose stock market valuation is nearly $100 billion. In an unusual move that opponents say is a violation of the state constitution, Amazon is taking directly to voters its argument that it should not be required to collect sales tax.

Infuriated state lawmakers are responding with what some observers are calling “the nuclear option”: writing new legislation that goes after Amazon and other online retailers under an “urgency” clause. If they can get the new measure passed by a two-thirds vote before the end of the legislative session on Friday, it will trump Amazon’s efforts toward a voter referendum.

* * *
Opposing Amazon are traditional retailers as big as Wal-Mart and as small as the neighborhood bookstore — the few that are left. “Amazon is killing our business in bricks-and-mortar stores,” said Bill Dombrowski, head of the California Retailers Association, which was the driving force behind the original law.

Read more: http://www.nytimes.com/2011/09/05/technology/in-california-amazon-pushes-hard-to-kill-a-tax.html?_r=1&hp

---

Once again, a big corporation hires hundreds of signature gatherers to get Californian residents to give it a tax break. Last year, Exxon put millions behind Prop 26. This year its Amazon. In California, if you spend a couple million on an initiative campaign, you may net billions in return. Nevada may have gambling, but in California we have the initiative process that allows major corporations to bet real money.

[stockholmer]

1. if Walmart is for the tax, then I'm against it, plus the argument is more complex than you framed it

The struggle is proving divisive. Immediately after the law was passed at the end of June, Amazon cut off its California affiliates. These were the thousands of Web sites that referred customers to the retailer’s site in return for a cut of the transaction. If they constituted a physical presence under the law, Amazon wanted to be rid of them.

snip

Sabrina Nelson, who lives in suburban Los Angeles, is the opposite: full of rage at the state. She and her husband, Jeff, are the proprietors of Vegsource.com, a resource for vegans, and they say Amazon’s move deprived them of a healthy chunk of their income.

“Why didn’t these legislators who supposedly represent me care about us?” asked Ms. Nelson, who is in her mid-40s. “They did this law for Wal-Mart and Macy’s and Target. But the genie is not going back into the bottle. You’re not going to stop people from buying on the Internet.”

Nick Loper, 28, forced to choose between being an Amazon affiliate and being a Californian, decided to move. He says his shopping comparison and referral site, ShoeSniper.com, was on track to do $250,000 in revenue this year. When Amazon said it would no longer pay Mr. Loper his commission, most of that disappeared.

“I always figured my own stupid decisions would put me out of business, not some stupid law that doesn’t benefit anyone,” Mr. Loper said.

[Fumesucker]

17. This issue splits DU along different lines than usual..

When I'm on the same side as The Wraith I know things are getting weird. ;)

It is interesting watching a bunch of DU line up with Walmart on this. :rofl:

Edited due to caffeine deficiency.

[TheWraith]

2. Sales tax is paid by the customer, not the company. Amazon doesn't profit off this.

They benefit by people preferring them over buying locally, but they're fighting for a tax break for their customers, not them.

[Downwinder]

3. Amazon is fighting to keep a price advantage over local competition.

They are also fighting to avoid tax on past sales. If they lose in CA they will lose in TX and other states.

The whole thing goes back to Bush saying there will be no taxes on the Internet when he didn't know what he was talking about.

Why should retailers on the "Information Superhighway" be treated any different than retailers on any other highway? For that matter why should they be treated differently than the vendors at "Trades Day?"

[PSPS]

4. You're right. This is merely Amazon wanting to freeload.

Sales taxes are passed onto the consumer, not paid by the retailer. "Affiliates" get maybe 1 - 3 % of the transaction as their commission. The sales taxes are an important source of revenue for California. It pays for the infrastructure and other support for Amazon, their affiliates, the trucks that deliver the goods, etc. This smacks of teabaggery to me -- "I want to live in a decent society but I don't want to pay for anything."

Dell faced the same issue many years ago and, now, they collect sales taxes on all of their sales to states that have a sales tax.

[Downwinder]

5. More of a problem.

The State is the official sales tax collector for the local taxing entities. By sending the bill to Amazon, the State is admitting that they should have been collecting the tax. That might put the State on the hook for what the local entities should have received.

[Sherman A1]

9. Precisely

It is all about Amazon wanting to grab whatever advantage they can get by gaming the system.

[cstanleytech]

14. Well i for one hope they lose.

The whole internet tax free haven thing also needs to be ended as to many companies like amazon are using it to avoid paying taxes but thats just my opinion.

[slackmaster]

25. Ultimately it's the customers who are avoiding paying taxes

You, the customer, are responsible for paying sales tax on things that you buy in other states.

[Ter]

42. There shouldn't be any taxes on the internet

I am a frequent Amazon buyer and strongly support not paying an extra dime, even though I'm saving from buying locally.

[JDPriestly]

6. I live in California. Amazon is wrong about this.

I understand how complicated it might be to collect this sales tax, but that tax is a major source of revenue in a state in which it is extremely difficult to change the tax code thanks to various propositions that have been passed over the years.

The sales tax, especially on consumer products, is a lot fairer than some of the other taxes that could be imposed.

Amazon just doesn't want to have to calculate these taxes for each of the 50 states.

[Downwinder]

8. If Amazon needs help figuring the tax due by zip code,

I have a 12 year old granddaughter that can set them up with a program to download a tax file from the State and figure the tax due by the delivery zip code. Thats what computers are for and I have yet to see a web site without a computer.

[slackmaster]

33. Sales tax rates in California are more granular than Zip code, and that's not even the issue.

FYI, here is an overview of California's sales tax rates. Note that it is not comprehensive.

http://www.boe.ca.gov/sutax/pdf/districtratelist.pdf

[Downwinder]

36. Looked at your list.

Geographically all of the districts are either County or Citywide. Both are definable by zip code or multiple zip codes.

[KamaAina]

48. ZIP+4 usually resolves to a single address or block.

So there.

[Gormy Cuss]

35. The state is looking to collect the state sales tax, not the local add-on. n/t

[Downwinder]

37. The State has no choice, they are the Official sales tax collector.

They collect the full amount and apportion it out to the various entities.

[Gormy Cuss]

39. Thanks for the correction.

[Ter]

43. In the state you're in only

If you buy something from CA and you live in NY, you never have to pay anything. Same thing on eBay. But if it's NJ to NJ (any any same states), then I've paid the state tax. Which is exactly why I try hard to order out of state.

[slackmaster]

45. A New York resident who buys something from California and doesn't pay sales tax has broken the law

Every state's law has a provision requiring the payment of "use tax" on taxable goods purchased in other states.

[Ter]

46. Who's law would it break, the state's you're buying from?

I doubt it's true. By ordering online, it's always automatic if it's in your state. The sales tax is added. If ordering out of state, no sales tax is collected. Try ordering from eBay or Amazon, and check that the state isn't your own. You won't be asked to pay taxes.

Now, if a NY resident is visiting CA and buys something there, he/she certainly has to pay a sales tax. But never online.

[slackmaster]

47. You would be breaking the law of the state where you live

If ordering out of state, no sales tax is collected. Try ordering from eBay or Amazon, and check that the state isn't your own. You won't be asked to pay taxes.

That's because it's YOUR responsibility to pay your state's use tax, not eBay's or Amazon's. That's what this whole issue is about.

Here is information on your state's use tax, in case you feel like doing the right thing and paying it from now on:

http://www.state.nj.us/treasury/taxation/su.shtml

From the Overview page:

...A compensating use tax is also imposed when taxable goods and services are purchased and New Jersey sales tax is either not collected or is collected at a rate less than New Jersey’s sales tax rate. The use tax is due when such goods, or the goods on which taxable services are performed, come into New Jersey. If sales tax was paid to another state, the use tax is only due if the tax was paid at a rate less than New Jersey’s rate....

[Ter]

50. I'm sorry, but I would like to hear a second opinion

I don't doubt your sincerity, but you're the only one replying to me. For 15 years I've been ordering online, and when picking an item, it always says "if you're a VA (or whatever) resident, you will be charged 7.8%(random number) sales tax." If you buy from your state online, there is no way around taxes on the purchase. It is always automatic.

If you're in NY and buy in CA, why should NY get the taxes? The item purchased online is coming from CA. NY would have nothing to do with it. Seems the state where it's purchased is the one getting screwed.

Do I "feel like doing the right thing"? The right thing is in the eye of the beholder. To me, that would be to not pay a dime extra. I don't care for taxes, I am middle class and want to keep as much as I can.

PS: Then there is Craigslist, a whole new animal. If you meet up with someone and buy a TV for $200, should you pay a tax? Should used items be taxed (yet another new animal)? I say no, since the state already got the tax when it was originally bought.

[brewens]

7. I really don't have a problem paying sales tax on online purchases.

I'm not going to until they force me to though. About anything over $50 I buy, I check out the online option. I'll look online to compare price with the local retailers. That usually means Walmart, Target and the usual suspects. I do try and give business to one locally owned and operated appliance store if they are in the ballpark.

More often than not Amazon gets the sale. If what I need is available at a good price I'll even look for other stuff if I need to, to qualify for the free shipping. The lack of sales tax really does give them an advantage. I'm not going to be the only fool in my state to voluntarily include that in my state taxes.

Then there are the cigars. That is online all the way to avoid taxes. I also hate the guy that runs our only local cigar shop. I'd pay more to avoid doing business with him. He's an ex cop, self loathing, right-wing, closet (he thinks) homosexual.

[alphafemale]

10. fckim

Tax the rich. Leave my fcking Amazon purchases alone.

[Celefin]

11. I think you got that backwards

No offense meant. Amazon is so big that they could still easily match or undercut all physical retailers on price and they will always be the most convenient way of shopping. Many, many people love amazon.com - I do, definitely.
This would just put a little dent in profits, something a 100billion+ company with a gigantic customer base will have no problem with. Tax the rich, just as you said.

Over here in Europe they pay all the usual taxes. They are still way cheaper and more convenient than their competitors.

[alphafemale]

12. nope.

Fuck sales tax in general.

Tax the fucking rich.

And now the fucks are crying that the poor don't pay INCOME TAX.


That's right mother fuckers....they DON"T pay INCOME TAX.

They pay PAYROLL TAX.

They pay SALES TAX on every shred of cloth they manage to place on their child's ass.

They pay GASOLINE TAX on every mile they drive back and forth to their shitty job.

They may pay CIGARETTE TAX.

They may also pay the LOTTERY. Which is a TAX on people who Suck at Math!!!!

Don't

Fucking.

Tell

Me

The poor don't pay taxes.

Fuck Walmart!!!

Fuck the bastards.
>
>
>
>
Sideways with a hoe.

[Celefin]

19. You're right of course

And I second almost everything you say, except the lottery (if people WANT to throw their money away...) and cigarettes (if you need to poison yourself and your surroundings, you may as well pay extra for it imo).
It's just that telling a megacorp like amazon to pay tax like everybody else is fine with me.

Don't know about you, but I've never bought any essentials from amazon, and the sales tax on books (in Europe at least) tends to be a lot lower than on other items.

So yes, remove sales tax on all essentials. Keep it on everything else. When you have money to pay for luxury goods like jewelry, entertainment electronics or expensive sports equipment you have money to pay taxes. Oh yes and fuck Walmart indeed. And ASDA, while you're at it. And the usual suspects.

[alphafemale]

20. Amazon wouldn't be paying the tax....

Fuck Walmart.

[Sirveri]

21. I'd love to do that, but the repukes have locked the state tax rates down.

Can't raise taxes without a 2/3 popular vote. Can pretty much never raise property taxes. So shouting is nice and all, but it's kind of pointless. Go get a bunch of folks to turn some cars over, then maybe we'll see some change.

[russspeakeasy]

26. alphafemale...I think I'm in love...

:evilgrin:

[alphafemale]

27. back at ya!

:loveya:

[cstanleytech]

15. They are probably cheaper over there

because I assume they dont have any physical stores which probably saves them a bundle, maybe if Borders had changed over to that model they might not have gone totally under...........................ah well.

[Celefin]

18. It's a bit mixed

Standard prices tend to be higher in Europe, but we get a lot less special offers.
Probably evens out somewhere. But even the standard prices nearly always undercut everybody else.

And no, there are no physical stores anywhere I know of.

[christx30]

44. Everyone is always

in favor of the other guy giving more.

[Le Taz Hot]

13. Delete.

I haven't had enough coffee. :hangover:

[Fumesucker]

16. Heh.. I'll drink to that..

[NashVegas]

22. I Think Most of Us Understand Why This Free Ride Is Over

Some still want that 10% price break though. Hard to blame 'em.

[2Design]

23. get rid of sales tax - only the middle and lower income people pay it anyway

go after these suckers salaries and retirement they voted in for themselves

[Gormy Cuss]

40. Yes, Sales taxes are highly regressive even in states where food is exempt.

I wish there were at least some energy expended by the legislature to mitigate that regressiveness.

[slackmaster]

24. Auto-Unrec for poorly written headline

Nobody is trying to kill any tax. The issue is who should be obligated to collect California's sales tax, not whether or not it should exist or be paid.

Ultimately the responsibility for paying sales tax (i.e. "use tax") on things purchased in states other than where the purchaser lives falls on the purchaser.

[Occulus]

31. This amounts to a few lines of code in their automated payment system.

I mean that literally, as in, one additional function call per
state. 

Multiplying by a percentage and then adding the result to the
total, to be displayed on the screen is CS-101 stuff. Amazon
should be ashamed of itself for making this out to be far more
onerous upon them than it actually is. 

Those of us who know what computer code actually is should be
screaming our heads off at Amazon. [i]This is simple shit.[/i]

edit: here's an example, written in illegal code

<!-- TWO STEPS TO INSTALL SALES TAX CALCULATOR:

  1.  Copy the coding into the HEAD of your HTML document
  2.  Add the last code into the BODY of your HTML document 
-->

<!-- STEP ONE: Paste this code into the HEAD of your HTML
document  -->

<HEAD>

<SCRIPT LANGUAGE="JavaScript">

<!-- This script and many more are available free online at
-->
<!-- The JavaScript Source!! http://javascript.internet.com
-->
<!-- Original:  Gordon Hudson ([e-mail]) -->
<!-- Web Site:  http://www.hostroute.com/ -->

<!-- Begin
function  doMath() {
var one = eval(document.myform.total.value)
var two = eval(document.myform.vat.value)
var prod = one  *   two
document.myform.amount.value=custRound(prod,2);
}
function custRound(x,places) {
return (Math.round(x*Math.pow(10,places)))/Math.pow(10,places)
}
//  End -->
</script>

</HEAD>

<!-- STEP TWO: Copy this code into the BODY of your HTML
document  -->

<BODY>

<CENTER>
<FORM NAME="myform">
<table border="1">
  <tr>
    <td>Total excluding VAT</td>
    <td>
      <input type="text"
name="total">
    </td>
  </tr>
  <tr>
    <td>VAT status</td>
    <td>
      <select name="vat">
        <option value="1.175" selected>In
Europe (with VAT)</option>
        <option value="1.00">Outside Europe
(no VAT)</option>
      </select>
    </td>
  </tr>
  <tr>
    <td>Total including VAT</td>
    <td>
      <input type="text"
name="amount">
    </td>
  </tr>
  <tr>
    <td> </td>
    <td>
      <input type="button"
value="Calculate" illegal code"doMath()"
name="button">
    </td>
  </tr>
</table>
</FORM>
</CENTER>


<p><center>
<font face="arial, helvetica"
size"-2">Free JavaScripts provided<br>
by <a href="http://javascriptsource.com">The
JavaScript Source</a></font>
</center><p>

<!-- Script Size:  1.94 KB -->

Amazon is complaining about what is, here, less than two
kilobytes of code. I'm sure it can be squeezed down further.

[slackmaster]

32. There are hundreds of different sales tax amounts in California.

It's more granular than Zip code. There are Zip codes that straddle two or more rate zones.

http://www.boe.ca.gov/sutax/pdf/districtratelist.pdf

Note the disclaimer "Certain cities provide addresses located within a special taxing jurisdiction."

Amazon's issue is NOT the technical difficulty of assessing sales taxes accurately, BTW. The issue is whether Amazon can be obligated to collect sales taxes in California when it does not maintain a physical presence in the state.

Amazon says that would be illegal.

[EvilMonsanto]

28. Come on guys

Tax amazon only because of their size?

If you think they hurt local businesses then don't buy at Amazon it's that simple
secondly local businesses don't charge shipping, so they do have an advantage and customers can go to the store if they require post sales help like a defective product.

you can't tax a company merely because of it's size, that doens't make sense

[slackmaster]

34. Nobody is talking about taxing Amazon

Sales taxes are paid by individuals and organizations that buy things.

[Downwinder]

38. True, under current thought size and tax paid should be an inverse ratio.

[dogmoma56]

29. i have no problem with an Internet tax if it all goes to social problems, scholarships for poor etc

[bemildred]

30. I hope they spend $130,000,000 like Meg did, and lose.

I think Bezos has lost his mind.

[EFerrari]

41. F#ck Amazon. n/t

[quakerboy]

49. I disagree with both sides.

Amazon should not get special treatment, and should follow the laws of any state where it has customers it serves. Brick and mortar stores subject to sales tax have an uphill climb to matching sales tax free online stuff, now that they seem to have figured out super cheap shipping methods.

So end sales taxes.

They are the most regressive tax. They are the most complex and hardest to track and account(A tax that has to be collected pennies at a time, a little bit from every transaction?). They are the most annoying (added math on every darn purchase). In short they are the most useless tax we have. Get rid of them already.