Amazon UK (+) news....

[DrNefario]

You'd think rich people were in charge.

Oh.

[HarryT]

It's worth noting that Amazon being based in Luxembourg is beneficial for customers, not just for Amazon themselves. It means we pay lower prices for many ebooks as a result. I'm sure that people will have noticed that when Luxembourg reduced the ebook VAT rate from 15% to 3% last year, the prices of most ebooks fell.

[carpetmojo]

Originally Posted by HarryT

It's worth noting that Amazon being based in Luxembourg is beneficial for customers, not just for Amazon themselves. It means we pay lower prices for many ebooks as a result. I'm sure that people will have noticed that when Luxembourg reduced the ebook VAT rate from 15% to 3% last year, the prices of most ebooks fell.

That can't be right...............
People selling things, passing on a tax-saving to their customers ?

Nah, something wrong there.

Sure there wasn't a translation error in there, Harry........ ?

[CommonReader]

Originally Posted by carpetmojo

That can't be right...............
People selling things, passing on a tax-saving to their customers ?

Only if you aren't one of the mugs who live in countries with fixed book prices. For those the tax reduction in Luxembourg simply means increased profits for Amazon, the publisher or the author.

[HarryT]

Originally Posted by carpetmojo

That can't be right...............
People selling things, passing on a tax-saving to their customers ?

Nah, something wrong there.

Sure there wasn't a translation error in there, Harry........ ?

I'm curious now. You sell books at Amazon, don't you? Didn't Amazon reduce the price of your books when the VAT rate changed?

[carpetmojo]

Originally Posted by HarryT

I'm curious now. You sell books at Amazon, don't you? Didn't Amazon reduce the price of your books when the VAT rate changed?

Ummm.... I don't sell books Harry !
Not to say there isn't a "great novel inside me", as the saaying goes, but I don't think it'll come out this late ...............

I think you may have the wrong chap ?

[ I just thought it was pretty unusual for a speedy response, favourable to consumers, to a tax cut by a mega concern like that... ]

[HarryT]

Originally Posted by carpetmojo

Ummm.... I don't sell books Harry !
Not to say there isn't a "great novel inside me", as the saaying goes, but I don't think it'll come out this late ...............

I think you may have the wrong chap ?

[ I just thought it was pretty unusual for a speedy response, favourable to consumers, to a tax cut by a mega concern like that... ]

Sorry - I had it in my mind that you were an author for some reason. My apologies.

Yes, almost all eBooks got reduced in price. Eg, one series I was buying at the time was the Michael Innes "Inspector Appleby" series. They previously cost £6.89 (£5.99 + 15% VAT); now they cost £6.17 (£5.99 + 3% VAT). Of course some greedy authors and publishers increased the price so the net price remained the same, but they were the exception.

[Yapyap]

Oddly enough, on Amazon.com the change hasn't been applied to all of EU customers.

It's easiest for me to tell by self-published book prices (as traditionally published books often have slightly different prices in different countries anyway) and they're still base price + $2 Amazon surcharge + 15% VAT (i.e. $0.99 books still cost $3.44, $2.99 books still cost $5.74 and so on), exactly the same way as they were last year.

On the other hand, an Austrian friend of mine who shops for Kindle books still on Amazon.com got a whole slew of eReaderiq notifications in the first days of January when everything in his wish list went cheaper.

[JSWolf]

Originally Posted by HarryT

It's worth noting that Amazon being based in Luxembourg is beneficial for customers, not just for Amazon themselves. It means we pay lower prices for many ebooks as a result. I'm sure that people will have noticed that when Luxembourg reduced the ebook VAT rate from 15% to 3% last year, the prices of most ebooks fell.

It may be better for customers, but it is not better for the UK. The UK needs the money that Amazon is not paying in tax. I'm hoping the UK changes the law such that if you even do business in the UK, you get to pay your 20% VAT and your other taxes.

[ProfCrash]

I hope that I can continue to shop at Amazon tax free. It is nice to save that extra money. Call me greedy but I am in the upper tax bracket for federal and state taxes. Being able to save a couple of bucks on taxes when I am buying other stuff is quite nice.

[HarryT]

Originally Posted by ProfCrash

I hope that I can continue to shop at Amazon tax free. It is nice to save that extra money. Call me greedy but I am in the upper tax bracket for federal and state taxes. Being able to save a couple of bucks on taxes when I am buying other stuff is quite nice.

I don't follow why it's tax free. Please correct me if I'm wrong, but if you don't pay sales tax on your online purchases, you pay the equivalent amount in "use tax" in your own state, don't you, or have I misunderstood the system?

[ProfCrash]

Sales taxes in the US are a state and local tax. They are based on brick and mortar stores. Where there is a store, there is sales tax. That goes for the internet as well as the physical store. If there is no store, there is no sales tax. There is no BM store for Amazon in my state so I do not have to pay sales tax. The only people who pay sales tax for Amazon are people who live in the state of Washington because that is where Amazon is headquartered.

[HarryT]

Originally Posted by ProfCrash

Sales taxes in the US are a state and local tax. They are based on brick and mortar stores. Where there is a store, there is sales tax. That goes for the internet as well as the physical store. If there is no store, there is no sales tax. There is no BM store for Amazon in my state so I do not have to pay sales tax. The only people who pay sales tax for Amazon are people who live in the state of Washington because that is where Amazon is headquartered.

Yes, I know all that.

But...

I thought that if you bought a product either on-line or out-of-state on which you paid no sales tax, and then used or consumed that product in your own state, there was a state tax called "use tax" which is the equivalent of sales tax. ie, you pay the same amount in use tax that you would have paid in sales tax.

http://en.wikipedia.org/wiki/Use_tax

Does the state that you live in not require the payment of Use Tax for online purchases?

[ProfCrash]

You are. Problem means that there really is no way for the state to prove that you bought what you bought from an Online retailer without legislating that everyone has to keep every receipt for every purchase and then auditing everyone on what they bought. This has led to serious under reporting on the user tax.

The States are trying to gain access to the sales records from companies like Amazon so that they have those records and can generate that use tax for individuals and then compell payment. Amazon has been able to fight that off pretty easily. Until the US tax code is re-written, and quite possibly until the Constitution is amended, this is going to be a losing battle for the States.

Try convincing folks who are paying close to 50% of their salaries to take one more for the team. If you have paid attention to any of our elections you will know how well that works. People complain about taking away tax breaks that help only billionaires and companies, never mind the complaints that would come from enforcing the user tax.

[HarryT]

Originally Posted by ProfCrash

You are. Problem menas that there really is no way for the state to prove that you bought what you bought from an Online retailer without legislating that everyone has to keep every receipt for every purchase and then auditing everyone on what they bought. This has led to serious under reporting on the user tax.

But that doesn't remove the obligation to pay it, surely? Is it not tax evasion if you don't pay it?