Amazon cuts deal with California over Sales Tax Collection

[Dulin's Books]

Amazon has agreed to pull out of the Referendum it was sponsoring to repeal the new online sale tax laws and California has agreed to delay the start of the new requirements by a year.

http://www.latimes.com/business/la-f...tory?track=rss

[Andrew H.]

This is interesting, but it is hard for me to figure out exactly what Amazon has agreed to.

The CNN article that I read simply states that Amazon will drop its referendum if Calif. pushes back the effective date of its internet tax bill by a year. There is no implication that Amazon will collect sales taxes after that time.

The LA Times article above implies, but does not clearly state, that Amazon has agreed to start collecting sales taxes after the year period is over.

And the headline on this Reuter's article http://www.reuters.com/article/2011/...7877R820110908 begins "Amazon.com Inc's agreement to start collecting sales tax in California next year...".

So I'm not sure what is actually going on. It also look like Amazon hasn't commented on the agreement.

[soondai]

damn. gonna miss that

[Dulin's Books]

Originally Posted by Andrew H.

This is interesting, but it is hard for me to figure out exactly what Amazon has agreed to.

The CNN article that I read simply states that Amazon will drop its referendum if Calif. pushes back the effective date of its internet tax bill by a year. There is no implication that Amazon will collect sales taxes after that time.

agree totally. Amazon hasn't agreed to start collecting the tax in a year. only to stop the referendum push if the requirements were pushed out a year.

it does sound like they have a greed to add some distribution hubs in the state which will place them in the position of having to do so.

[avariel]

Why in the world is California trying to hurt the one place where the economy is thriving by taxing it?

[Steven Lake]

Edit: So as not to send this thread down a path of political argument and ruin it for everyone, I retract my post. ^_^;;

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[Kali Yuga]

It was a bit buried, but basically the CA legislature already passed a law requiring out-of-state companies to collect CA sales tax. The referendum was intended to overturn that law. Amazon dropped the referendum, and the legislature will try to delay enforcement until next July.

Amazon is hoping there will be a Federal sales tax law passed in the next year or so.

If that doesn't happen, Amazon will be stuck collecting CA taxes on its CA customers.

[Steven Lake]

I honestly hope they NEVER tax the internet, ever. They already tax us in too many areas as it is.

[J. Strnad]

I really think that internet sales have outgrown the "states" model and become something the Fed has to deal with.

I wonder about all of the additional sales taxes from cities and counties. Should/does Amazon have to collect those? We're talking about literally thousands of such sales taxes, and they change with every election and some expire after a set time. How could a company that sells nationally be expected, reasonably, to keep up with all of those taxes?

[Andrew H.]

Originally Posted by Kali Yuga

If that doesn't happen, Amazon will be stuck collecting CA taxes on its CA customers.

Not if they don't have a physical presence in Calif. Otherwise, the law is still unconstitutional.

[Andrew H.]

Originally Posted by J. Strnad

I really think that internet sales have outgrown the "states" model and become something the Fed has to deal with.

I think this is probably right.

I wonder about all of the additional sales taxes from cities and counties. Should/does Amazon have to collect those? We're talking about literally thousands of such sales taxes, and they change with every election and some expire after a set time. How could a company that sells nationally be expected, reasonably, to keep up with all of those taxes?

I think the difficulty of collecting these taxes is overstated - online retailers with a presence in every state (Walmart.com, apple.com, bn.com) have been able to do this for years with no difficulty. I understand that the general approach is to subscribe to a service that keeps track of sales taxes by address for every state. Which is not as hard as it sounds if you are appopriately staffed - every state has one agency that does the same thing for that particular state...so even if the state consists of a patchwork of jurisdictions, you can find this all out by just going to one place in each state.

[vaughnmr]

Originally Posted by Andrew H.

I think this is probably right.



I think the difficulty of collecting these taxes is overstated - online retailers with a presence in every state (Walmart.com, apple.com, bn.com) have been able to do this for years with no difficulty. I understand that the general approach is to subscribe to a service that keeps track of sales taxes by address for every state. Which is not as hard as it sounds if you are appopriately staffed - every state has one agency that does the same thing for that particular state...so even if the state consists of a patchwork of jurisdictions, you can find this all out by just going to one place in each state.

I love comments like this. "the problem is overstated", all you need to do is "be appropriately staffed" and contact every state agengcy (50 the last I heard) and then find a way to convert the data into your own software. No big deal! Small business owners can rejoice!

And people who think like this are the ones that run our government.

[Kali Yuga]

Originally Posted by vaughnmr

I love comments like this. "the problem is overstated", all you need to do is "be appropriately staffed" and contact every state agengcy (50 the last I heard) and then find a way to convert the data into your own software. No big deal! Small business owners can rejoice!

National sales tax databases already exist.

Here's one service for less than $50/month, updated monthly: http://www.prosalestax.com/custom/cart/edit.asp?p=84448

It's not that onerous. It's just that Internet sales exploit a loophole in the law, which gives them a slight competitive advantage.

[Andrew H.]

Originally Posted by vaughnmr

I love comments like this. "the problem is overstated", all you need to do is "be appropriately staffed" and contact every state agengcy (50 the last I heard) and then find a way to convert the data into your own software. No big deal! Small business owners can rejoice!

Name a small business that has a physical presence in every state.

And it's the company running the subscription service that needs to be appropriately staffed and contact the state agencies. The business just pays the subscription.