Quote:
Originally Posted by Daithi
Amazon has two subsidiaries, A9 and Lab126 both in the Silicon Valley, that work on developing Amazon's current and future technology. However, these are completely seperate businesses that are seperate from the retail business of Amazon (essentially Amazon just works as a venture capitalist). Other states have tried to link these types of subsidiaries with corporate parents so as to force the parent company to collect and pay sales tax, but they have all failed. California has even tried this in the past and lost.
If California suceeded this time around it would be truly catastrophic for them. A9 and Lab126 would leave California and so would hundreds of other tech firms that are started by venture capital from firms that don't want to collect sales tax -- not to mention all the tech firms that don't get funded in the first place. If Amazon funding tech firms like A9 and Lab126 is deemed to provide a nexus then California could expect to see VC dry up overnight. Not too smart.
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Well explained and reasoned. Gets to the core of what delaying addressing this issue has created. It is now a rat nest of over complications. Even a simplified tax schedule won't work because municipalities are indeed entitled to the collection of their local taxes on sales of items which would otherwise be purchased locally and subject to sales tax.