4 ms·

It's incredible how things like collecting sales tax is up for discussion with some US states. If you don't collect VAT anywhere in Europe you get severely puni

by bflesch 10y ago

It's incredible how things like collecting sales tax is up for discussion with some US states. If you don't collect VAT anywhere in Europe you get severely punished by authorities. They take their 20% cut from every sale very seriously.

soneil 10y ago
It's .. complicated. It's not so much whether tax should be collected, it's where and who by. I can only speak for Michigan, the only state I've lived in, but it goes something like; * Tax on interstate purchases (where the buyer and vendor are physically in different states) is owed in the state the buyer is physically in. * Tax is not (was not?) collected at the point of sale. * Buyer should declare (significant?) purchases on their (state) tax returns. So the theory is that if I go into a shop and purchase something for $100, I pay $106 at the point of sale. If I purchase the same item from an out-of-state vendor online, I pay $100 at the point of sale, and owe the outstanding $6 on my state taxes. As you can imagine, this is near-impossible to audit (hands up anyone who's ever declared those purchases?). There's been resistance to change nominally because taxes are very difficult to calculate (the same purchase can be covered by state, county and municipal taxes - it's not just a list of 50 numbers), but realistically because online vendors have enjoyed making it Someone Else's problem, with the lower prices also working in their favour (on significant, 4-digit purchases, whether the vendor had a presence in Michigan would factor into which vendor I chose).
- MagnumOpus 10y ago
  > this is near-impossible to audit This is only hard to audit because the Michigan tax authorities are criminally incompetent (or just criminal full stop). Subpoena Amazon (and jet.com, ebuyer, newegg) sales delivered to Michigan addresses, compare address list with the list of addresses that self-declared sales tax for out-of-state purchases, send automatic back tax and penalty notice to all all addresses which didn't. None of these steps are hard, it will increase compliance millionfold and bring it hundreds of millions in revenue.
  - brianwawok 10y ago
    My understanding of why this is all so tricky.. the Constitution specially gives only the federal govetnment the right to regulate interstate commerce. So Michigan could not force the records from Amazon, the federal government would need to.
  - jjeaff 10y ago
    Just subpoena it? Under what authority? Amazon is WA based. Unless there is some sort of physical Nexus in MI, how do you enforce a subpoena? MI state police can't show up at Amazon headquarters and start siezing assets, it doesn't work that way. It's not Amazon's problem that it's customers aren't following state law. And MI has no authority to require an outside company to comply any more than they could force Alibaba to collect MI state sales tax. Note that I don't know if Amazon has facilities in MI or not, but there are plenty of states where they dont.
tyingq 10y ago
It's very difficult to do right. The amount to collect, for many states, is different for each city, and sometimes even different rates within a single city. Similar issues with remitting the collected tax. The government is only now somewhat serious about it for e-commerce because it's finally possible, because of complex software, to do it mostly right.
emodendroket 10y ago
Well part of that is that in the United States every single state and multiple municipalities set their own rules for taxation. It is quite burdensome for an online retailer to comply with this (whereas a brick-and-mortar retailer generally only has to worry about the one set of rules for where it is located). In fact, one reason Amazon may have changed its mind about whether it should be mandated that online retailers collect sales tax is that the complexity of doing so may keep new competitors without Amazon's vast resources out of the market.
- jjeaff 10y ago
  It's complicated but it's been solved already. There are already services that keep the tax tables up to date and issue the funds to the respective districts for a small fee. Amazon will use one of these services like everyone else will.

by bflesch 10y ago

soneil 10y ago

It's .. complicated. It's not so much whether tax should be collected, it's where and who by. I can only speak for Michigan, the only state I've lived in, but it goes something like; * Tax on interstate purchases (where the buyer and vendor are physically in different states) is owed in the state the buyer is physically in. * Tax is not (was not?) collected at the point of sale. * Buyer should declare (significant?) purchases on their (state) tax returns. So the theory is that if I go into a shop and purchase something for $100, I pay $106 at the point of sale. If I purchase the same item from an out-of-state vendor online, I pay $100 at the point of sale, and owe the outstanding $6 on my state taxes. As you can imagine, this is near-impossible to audit (hands up anyone who's ever declared those purchases?). There's been resistance to change nominally because taxes are very difficult to calculate (the same purchase can be covered by state, county and municipal taxes - it's not just a list of 50 numbers), but realistically because online vendors have enjoyed making it Someone Else's problem, with the lower prices also working in their favour (on significant, 4-digit purchases, whether the vendor had a presence in Michigan would factor into which vendor I chose).

MagnumOpus 10y ago
> this is near-impossible to audit This is only hard to audit because the Michigan tax authorities are criminally incompetent (or just criminal full stop). Subpoena Amazon (and jet.com, ebuyer, newegg) sales delivered to Michigan addresses, compare address list with the list of addresses that self-declared sales tax for out-of-state purchases, send automatic back tax and penalty notice to all all addresses which didn't. None of these steps are hard, it will increase compliance millionfold and bring it hundreds of millions in revenue.
- brianwawok 10y ago
  My understanding of why this is all so tricky.. the Constitution specially gives only the federal govetnment the right to regulate interstate commerce. So Michigan could not force the records from Amazon, the federal government would need to.
- jjeaff 10y ago
  Just subpoena it? Under what authority? Amazon is WA based. Unless there is some sort of physical Nexus in MI, how do you enforce a subpoena? MI state police can't show up at Amazon headquarters and start siezing assets, it doesn't work that way. It's not Amazon's problem that it's customers aren't following state law. And MI has no authority to require an outside company to comply any more than they could force Alibaba to collect MI state sales tax. Note that I don't know if Amazon has facilities in MI or not, but there are plenty of states where they dont.

tyingq 10y ago

It's very difficult to do right. The amount to collect, for many states, is different for each city, and sometimes even different rates within a single city. Similar issues with remitting the collected tax. The government is only now somewhat serious about it for e-commerce because it's finally possible, because of complex software, to do it mostly right.

emodendroket 10y ago

Well part of that is that in the United States every single state and multiple municipalities set their own rules for taxation. It is quite burdensome for an online retailer to comply with this (whereas a brick-and-mortar retailer generally only has to worry about the one set of rules for where it is located). In fact, one reason Amazon may have changed its mind about whether it should be mandated that online retailers collect sales tax is that the complexity of doing so may keep new competitors without Amazon's vast resources out of the market.

jjeaff 10y ago
It's complicated but it's been solved already. There are already services that keep the tax tables up to date and issue the funds to the respective districts for a small fee. Amazon will use one of these services like everyone else will.