Amazon UK (+) news....

[Kali Yuga]

Originally Posted by HarryT

there was a state tax called "use tax" which is the equivalent of sales tax....

Yes, use tax is basically the same thing as sales tax.

In theory the consumer ought to report online purchases, in practice the State won't see a penny unless the retailer collects it at the time of sale.

There are lots of quirks to the sales tax collection laws. IIRC California drafted a law that said if the retailer performs any work in CA, the retailer must collect sales taxes regardless of the location of the corporate headquarters. As a result, Amazon pulled a bunch of affiliates in order to avoid collecting CA sales taxes.

Small businesses also occasionally get zapped for unreported/unpaid use taxes.

Walmart in particular has pushed the issue, since it's a huge competitive advantage for Amazon not to collect sales taxes. The online retailers are starting to see the writing on the wall, and are now pushing for a federal standards on sales tax collection to simply things.

[Kali Yuga]

Originally Posted by carpetmojo

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

In the case of VAT, I don't think they have a choice. It's itemized into the final sale, just like sales tax.

[ProfCrash]

The US tax law needs to be rewritten. Point blank and period. The problem is the way the US Constitution is written pretty much prevents the Federal Government from being able to step in and help the States. The States have a tough time coordinating their activities and law suits in many areas and so it is hard for them to challenge larger businesses. Not that the Federal tax code doesn't need some serious work of its own.

I am sure there is a way for the Feds to help the States but that would require coordination and a fair amount of money. Not to mention, who do you chose to target in your initial audits and investigations?

It is one big ugly mess.

If a State or two succeeds in getting records from the large companies, like Amazon, I am sure that more people will pay their User Tax or Amazon will start charging sales tax to make everyones life easier.

I buy e-books from Amazon and only e-books. Since all of my e-books are Big 6 they are charged sales tax at the time of purchase so I am good to go.

[carpetmojo]

This tax avoidance issue - no matter who or what does it, individual or business - still comes down to the fact that if a lot of money is being made, it makes it increasingly likely that some of it to be used to avoid paying taxes.
Because they can.
Taxes that the rest of the community, without equivalent resources to be able to avoid it, end up paying. And, logically, are not as able to pay so easily.

So you and I - or indeed any smaller commercial concerns - are paying to make up for the taxes that Amazon and the like, avoid.

So, in a roundabout way, we're paying Amazon's taxes - and those of anybody else able to afford tax avoidance strategies.

[whitearrow]

Originally Posted by Kali Yuga

There are lots of quirks to the sales tax collection laws. IIRC California drafted a law that said if the retailer performs any work in CA, the retailer must collect sales taxes regardless of the location of the corporate headquarters. As a result, Amazon pulled a bunch of affiliates in order to avoid collecting CA sales taxes.

California and Amazon reached an agreement, and Amazon will start collecting California sales tax in the fall.