Amazon cuts deal on California sales taxes

[alp227]

Source: Los Angeles Times

Reporting from Sacramento—
Amazon.com cut a tentative deal with legislative leaders Wednesday night that would allow it to postpone collecting sales taxes from Californians for another year.

The company in turn would drop its battle to overturn the state's new law that required it and many other out-of-state online retailers to collect the taxes.

Under the deal, Amazon would delay collecting taxes until September 2012, Assemblyman Charles Calderon (D-Whittier) said. The new law had mandated that Internet retailers start collecting state taxes in July if they had offices, workers or other connections in California.

Amazon had refused to collect the taxes and poured $5 million into collecting signatures for a ballot referendum challenging the law.

Read more: http://www.latimes.com/business/la-fi-amazon-tax-20110908,0,5065691.story

[TheWraith]

1. I hope someone else takes up the effort to repeal it.

Sales taxes online discourage people from buying stuff from the US instead of from overseas. And sales taxes are regressive anyway.

[abelenkpe]

2. Strange

I've bought tons of stuff online and always paid taxes.

[TheWraith]

3. It depends on the retailer, and on the state.

Some states demand you pay their taxes on anything you buy online, and most retailers will charge you tax if they have a presence in your state.

This, of course, creates an incentive for customers to spend their money out of state: if I can get the same thing from either New York or Iowa, I can get a better deal from Iowa since I don't have to pay sales tax.

[PSPS]

12. No, it doesn't work that way.

Any sales tax you pay with an online purchase is the rate charged by your state, not the vendor's state. If I buy something from Dell in Texas (assembled in Mexico,) my state's sales tax is added to the order, and then remitted by Dell to my state.

Some out-of-state vendors don't do this but it's only because they haven't been caught yet. The only exception to this rule is if the vendor is located in one of the five states that have no state sales tax. In those cases. they are required to collect state sales tax on behalf of the purchaser only if they have a "nexus" to a physical location in the purchaser's state.

In any event, Amazon should have always been doing this. It isn't a cost item to them as the tax is paid by the customer.

[Ter]

18. You want to pay taxes?

Online purchases from out of state should always be tax free.

[Ter]

17. Why?

Voluntarily?

[Frances]

4. I live in CA

It is very convenient for me to order from Amazon.

However, I think Amazon should collect tax from me:

As things exist now, Amazon will eventually drive bricks and stones stores (from mom & pop's to Sears) out of business because Amazon can sell items 10% cheaper than the other bricks and stones stores. (The tax here is almost 10%.)I have personally heard local business owners complain about this unfairness.

When local brick and stones stores close, there will be less competition and less incentive for Amazon to charge a competitive price for products.

There are some items I want to actually see before I buy them so I do not want bricks and stones stores to disappear.

When Amazon doesn't collect taxes, public schools, bridges, police, firefighters suffer.

[kirby]

5. I don't understand...

Local brick and mortar use resources of CA. Why should an out of state entity pay taxes to a state they have nothing to do with? Amazon does not benefit directly from the schools, bridges, services of CA.

[Luminous Animal]

9. The tax is not on Amazon. The customer has to pay it. Amazon is being compelled to charge it.

FYI, Amazon already charges sales taxes for most of their large retail affiliates like Target.

[razorman]

16. I wonder if Amazon will strike back at California by identifying the tax on their site.

Apparently, they have agreed not to close Cali affiliates, which would hurt the state, or try to repeal the law. However, they might add a statement on their sites to let their customers in California know that they are now required to pay the tax, "as ordered by Governor Brown", or something. I am sure that could wind up closing down some affiliates anyway, and lead to a public attempt to repeal the law.

[Mosby]

11. because the transaction took place in CA

[Wait Wut]

7. I don't think that's true.

I just ordered something through Amazon for my d-i-l's bday and it was shipped from (what appears to be) a family owned stationary store in NH. My sister told me a pretty funny story about some earrings she bought for me from Amazon that were delayed in shipping. She was in contact with a guy that was making them in his basement and selling through Amazon. He had become overwhelmed due to the holidays (she forwarded the emails...poor guy was losing it).

I think a lot of these smaller stores could benefit by selling in markets where their products could not easily have been sold before. Granted, I've never tried to become an Amazon affiliate (or whatever), so I'm not sure what their cut is or how difficult it is, but it still sounds like they make it pretty convenient. And, weren't there a ton of vendors/sellers in CA throwing a fit because Amazon wouldn't deal with them because of this tax thing? From what I recall, quite a few were the "bricks and stones" places you refer to.

Either way, I wouldn't have driven to NH to buy my d-i-l a bday gift, and I doubt my sister would have visited some strange guy that was making jewelry in his basement to buy me a pair of earrings.

[Luminous Animal]

10. I can almost always get my local retailer to match the lowest Amazon price.

I recently purchased a new Weber grill. It was $179.00 less on Amazon that at the local Weber dealer. My local guy matched the price. Win win for everyone.

[Scruffy1]

6. All sales taxes are regressssive.

This is the worst form of political expediency. If you really want to drive down demand raise sales taxes. For instance my book budget will be effectively reduced by the tax. States like them and regressive real estate taxes because they are not as subject to economic downturns as income tax.

[Modern_Matthew]

14. Preach it. nt

[24601]

19. So are the proposed new taxes on private jet flights. Just think of

the embarrassment of facing your friends after having to pay the same fee for a flight in bottom-feeding Cessna Citation Excel as they pay for their flight in a G5 or Bombardier 850!

You definitely aren't getting your dollar's worth when things of lesser value are taxed the same as more expensive items. But damn, that's life.

Might I suggest a library card.

[Taverner]

8. Californians really do need to start paying more in taxes

Seriously - the State could use the money. Despite it being a regressive tax, it's the best we're left with.

[Frances]

13. I prefer an income tax

but in CA the minority Repubs have enough of a minority to block higher income taxes or corporate taxes, so we are left with the regressive sales tax.

[Taverner]

15. I do too, but the state should take what it can get