06-30-2011, 02:52 PM | #31 |
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Not necessarily. Tax could be collected federally as distributed proportionally. There are lots of ways to do things better, but jurisdictional bickering will always mess them up.
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06-30-2011, 02:57 PM | #32 |
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That's because such laws were ruled unconstitutional decades ago, when mail order (and that's what buying physical products off the internet is) was big business. There's nothing new, legally, to explore there.
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06-30-2011, 02:59 PM | #33 |
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California doesn't (last I knew, anyway) collect sales tax if no physical product changes hands. So ebooks are non-taxable. The other possibility is that one item was bought not from Amazon, but through Amazon, but from a reseller who is in California. (Though I thought Amazon had a fulfillment center in California, and charge sales tax to all California residents anyway. Apparently not.)
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06-30-2011, 03:01 PM | #34 |
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06-30-2011, 03:51 PM | #35 | |
Publishers are evil!
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Other states started passing similar laws as New York. Amazon could have charged tax to everyone in those states as well, but instead they took a different tack. They just canceled their affiliate programs with those states. No expensive lawsuits and no burdensome taxes. Problem solved. The state of Tennessee might have a stronger argument in court. In their case they were going to tax Amazon because Amazon had two distribution centers in the state and plans to build three more. Tennessee said this was a "physical presence" so Amazon needed to charge sales tax. Amazon's position was the warehouses were not a "retail presence" that would require them to collect taxes from Tennesseans. I think Amazon may lose this case, and apparently so does Amazon, because they eventually decided it would just be best to cancel their expansion plans and leave the state of Tennessee all together. So Tennessee is losing thousands of jobs and millions in investment from Amazon. If you set up a retail store in a state you have to collect taxes in that state. If you have a catalog, mail order, or internet business that doesn't reside in that state you shouldn't have to collect taxes. If you have a distribution center that could go either way -- but the state should treat all businesses the same (most multinationals with warehouses but no retail presence do NOT collect taxes for the state where they just have warehouses). The smartest thing would be for the U.S. Congress to level the playing field. They could pass a law that would require companies to collect taxes for the state to which they are shipping the item. Each state would set its own tax rate and it wouldn't be too burdensome for a business to consult a table of 50 different tax rates. Last edited by Daithi; 06-30-2011 at 03:55 PM. |
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06-30-2011, 04:06 PM | #36 | |
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06-30-2011, 04:12 PM | #37 | |
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Is that a good thing? I don’t know, it’s obviously good for Oregon but is it good for the consumer? The number of variables involved hurt my brain! |
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06-30-2011, 04:37 PM | #38 | |
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What about New York City where Wal-Mart has a warehouse along the docks for receiving overseas shipments, but it doesn't have any retail stores in the city. Should Wal-Mart be paying sales taxes to NYC for items bought outside of the city because of those warehouses? |
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06-30-2011, 04:50 PM | #39 |
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right. which is why I think it should be clarified by federal statute for businesses BUT I think it should be left the way it is now and in the case of on line businesses it should be clear the transaction takes place where the business people reside.
A shipping location should not be a reason to collect a sales tax. because then you might fall into the trouble of having physical stores which have to collect a sales tax from another state because they have fulfillment space there. that wouldn't make sense. Today i don't charge you a sales tax because the item is here in my store in Oregon but I have to charge the next person Washington sales tax because I have run out of the item in the store and I will ship it from my Washington warehouse. |
06-30-2011, 05:06 PM | #40 | |
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This isn't a question of who is right and who is wrong. In fact it is settled law and Amazon is correct. Quill Corp v. North Dakota settled this question way back when, over mail order business. The company must have a "substantial nexus" in order to come under the jurisdiction of the state to mandate they collect the state's due sales tax. The court ruling left it to Congress to develop a way to create an interstate tax collection regime, which they have consistently failed to do. The states are getting mighty upset over Congress' failure in this area, and have now resorted to passing laws they know are unconstitutional, and that they know will get overturned, in order to try to force Congress into tackling the issue. Amazon only needs to fight this in one state, and so there is no reason for them to comply with the law in the other states, since any ruling will end up being applied to all the states when they win. I say when, because I do believe they are right, having taken the time to read the court's ruling in Quill Corp. To say affiliates create a substantial nexus would be to say that a television station airing a commercial in Alaska, creates a substantial nexus for the Florida based seller who has no other ties to the state. It's ludicrous and lacks even the most common sense compliance with the terms laid out by the court. |
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06-30-2011, 05:11 PM | #41 |
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Frankly, I think that the states should band together with the federal govt and set a flat use tax, that is uniform nationwide. Decide how it gets remitted, and who gets what.
And then we pass a law that requires all retailers to list the actual, out the door, final price on all items. The price listed, is the price you pay, and includes any use tax. Make an exception for shipping, but require shipping to be cost recovery, and not a profit center. Make the profits on the item price. Call it the Honesty in Pricing Act. Most European countries operate this way, as does Australia. Businesses fight this concept here, because they want the customers to be more aware of what the taxes are. My answer, make sure you spell out what the total in taxes were on the receipt. |
06-30-2011, 05:35 PM | #42 |
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WOW, I wonder how much that escrow account is with all of Amazon's New York sales tax in it!!! Very interesting, thanks guys.
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06-30-2011, 07:07 PM | #43 |
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Too bad we don't still have a federal legislative chamber to represent the interests of the states. If the Senate still served its original purpose, this sort of thing might be more easily brought up.
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06-30-2011, 08:02 PM | #44 | |
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Oregon residents would continue to owe no sales tax, regardless of whether they bought the product from an in-state retailer or an internet retailer based in Calif. Cali residents would continue to pay the same sales tax regardless of whether they bought a product in Cali or from an internet retailer in Ore. It's not entirely for no pay - my state (and I would assume all states) permits retailers to retain a small "collection allowance" (.83%, in my state) to defray the expense of collecting the taxes. |
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06-30-2011, 08:08 PM | #45 | |
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