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Amazon offers Texas 5,000 jobs in trade for sales-tax exemption

18 points by taylorbuley 15y ago

noonespecial 15y ago
Today corporations are negotiating directly with states. As equals. Not long ago, cities and counties were about the most they could swing. It won't be long until it becomes countries. That used to strike me as extremely dystopian. Now I'm not even sure that would be so bad.
- bdhe 15y ago
  I think things were far worse not so long ago: http://en.wikipedia.org/wiki/East_India_Company http://en.wikipedia.org/wiki/East_India_Company Although it might be a stretch to compare them to a modern-day corporation, they were a private company and had territories, a (edit: govt. chartered) monopoly and even their own army. edit: In fact, the Tea act of 1773, that lead directly to the Boston Tea Party, was because the EIC was facing financial troubles after a famine in Bengal. Maybe these things come and go in cycles.
- brianbreslin 15y ago
  Some corporations already negotiate at national levels. GE probably does all the time with the same leverage amazon has at a state level.
  - maratd 15y ago
    Same goes for GM, large banks, etc. and those are only the ones we read about.
MichaelApproved 15y ago
"Finally, it wants the Texas comptroller's office to set up a website where its customers can send sales tax owed on Amazon purchases to the state. Historically, voluntary sales-tax payments haven't been reliable." I thought that part of the story was a joke. "Historically, voluntary sales-tax payments haven't been reliable." has got to be an understatement. Has anyone here ever voluntarily paid sales taxes?
- epochwolf 15y ago
  > Has anyone here ever voluntarily paid sales taxes? I didn't even know it was possible to do so.
  - sixtofour 15y ago
    I would be reluctant to do so, because that establishes one more connection between me and the state. The best thing, in general, is to minimize your profile with the state.
- SwellJoe 15y ago
  When I ran a business in Texas, I generally did. There were occasions where I bought parts intended to resell them, but ended up with them stuck in one of the desktop or development machines...so, I probably cheated a little bit, but not much. But, I was under the impression individuals were not legally obligated to pay sales tax on goods from out of state, but this article makes it sound like they are. So, I never paid on individual purchases during the 15 or so years I lived in Texas.
  - esrauch 15y ago
    In NY State at least there is a "use tax" which is not the same as sales tax, but it effectively is just sales tax on goods bought out of state.
  - dangrossman 15y ago
    Not that I'm some kind of tax expert, but AFAIK, "sales and use tax" is levied on categories of goods and services, regardless of where they're purchased. There's only an obligation to COLLECT the tax by retailers with a presence in the state, but all residents of the state have to pay the tax on all purchases. When it's collected by the retailer it's called sales tax, when it's not it's called use tax and you have to send it in yourself.
- ohyes 15y ago
  In CT it is a line on your tax form. It is only on certain goods and I just do an estimate, but yes, I paid it.
cbailey 15y ago
While it's common practice for a city government to give tax breaks for large corporations in exchange for bringing a large number of jobs (almost like a "thank you" for bolstering the local economy), the sales-tax exemption is new to me. I had to reread the beginning of the article before it really hit me.
- evan_ 15y ago
  Keep in mind that they're already sale-tax exempt in Texas. They don't have any locations in Texas, therefore they don't have to charge sales tax. They want to open a facility in Texas, but they don't want to have to start charging sales tax. Doesn't hurt to ask.
  - daniel_solano 15y ago
    Actually, they have had a facility in Texas for some time that they were planning on expanding. Last year, the comptroller demanded they pay back something on the order of $600M in back taxes and penalties.
    - evan_ 15y ago
      oh, then it doesn't make any sense.
  - pcarmichael 15y ago
    Without a presence in Texas, Amazon is not obligated to collect sales tax. However, the customer must then pay a 'use tax', which is the same rate as the sales tax: http://www.window.state.tx.us/taxinfo/sales/faq_use.html http://www.window.state.tx.us/taxinfo/sales/faq_use.html What the public in general seems to miss is that the tax revenue is due one way or another - either Amazon collects or customers self pay. Most of the public who are not business owners do not realize they need to self pay - it is neither enforced nor made obvious that one needs to do so. So instead of making the public aware of 'use tax' and trying to enforce it, the Texas legislature is trying to change the definition of an in-state presence to include independent subsidiaries, affiliates, etc. Then by doing so, the government can force the merchant to collect the taxes owed for them. The first 'internet sales tax' bill was passed by the legislature but vetoed by the governor. Similar language was added to an omnibus spending bill, which is much more likely to survive.
shib71 15y ago
The idea that it is valid to insert arbitrary and tangential (if not completely unrelated) laws into bills is something about the American system that baffles me.
- SkyMarshal 15y ago
  It's nuts, do other countries have a solution to this?
giardini 15y ago
This appears to be a violation of the equal protection clause of the 14th Amendment. If Texas can do this for Amazon may I also request it for _my_ Texas corporation? Can I get a better deal than Amazon's? Do we now all haggle with the state about how much tax we pay?
sixtofour 15y ago
I could go the rest of my life without buying a book. There's enough information and entertainment on the Internet and among my friends. If corporations and states require me, the consumer, to keep track of their bookkeeping for them, indeed make it dangerous to purchase something online when I don't have the time, inclination or ability to find out where each vendor's presence happens to be, I might just opt out entirely. It's the safe thing to do.

18 points by taylorbuley 15y ago

Today corporations are negotiating directly with states. As equals. Not long ago, cities and counties were about the most they could swing. It won't be long until it becomes countries. That used to strike me as extremely dystopian. Now I'm not even sure that would be so bad.

bdhe 15y ago
I think things were far worse not so long ago: http://en.wikipedia.org/wiki/East_India_Company http://en.wikipedia.org/wiki/East_India_Company Although it might be a stretch to compare them to a modern-day corporation, they were a private company and had territories, a (edit: govt. chartered) monopoly and even their own army. edit: In fact, the Tea act of 1773, that lead directly to the Boston Tea Party, was because the EIC was facing financial troubles after a famine in Bengal. Maybe these things come and go in cycles.
brianbreslin 15y ago
Some corporations already negotiate at national levels. GE probably does all the time with the same leverage amazon has at a state level.
- maratd 15y ago
  Same goes for GM, large banks, etc. and those are only the ones we read about.

MichaelApproved 15y ago

"Finally, it wants the Texas comptroller's office to set up a website where its customers can send sales tax owed on Amazon purchases to the state. Historically, voluntary sales-tax payments haven't been reliable." I thought that part of the story was a joke. "Historically, voluntary sales-tax payments haven't been reliable." has got to be an understatement. Has anyone here ever voluntarily paid sales taxes?

epochwolf 15y ago
> Has anyone here ever voluntarily paid sales taxes? I didn't even know it was possible to do so.
- sixtofour 15y ago
  I would be reluctant to do so, because that establishes one more connection between me and the state. The best thing, in general, is to minimize your profile with the state.
SwellJoe 15y ago
When I ran a business in Texas, I generally did. There were occasions where I bought parts intended to resell them, but ended up with them stuck in one of the desktop or development machines...so, I probably cheated a little bit, but not much. But, I was under the impression individuals were not legally obligated to pay sales tax on goods from out of state, but this article makes it sound like they are. So, I never paid on individual purchases during the 15 or so years I lived in Texas.
- esrauch 15y ago
  In NY State at least there is a "use tax" which is not the same as sales tax, but it effectively is just sales tax on goods bought out of state.
- dangrossman 15y ago
  Not that I'm some kind of tax expert, but AFAIK, "sales and use tax" is levied on categories of goods and services, regardless of where they're purchased. There's only an obligation to COLLECT the tax by retailers with a presence in the state, but all residents of the state have to pay the tax on all purchases. When it's collected by the retailer it's called sales tax, when it's not it's called use tax and you have to send it in yourself.
ohyes 15y ago
In CT it is a line on your tax form. It is only on certain goods and I just do an estimate, but yes, I paid it.

cbailey 15y ago

While it's common practice for a city government to give tax breaks for large corporations in exchange for bringing a large number of jobs (almost like a "thank you" for bolstering the local economy), the sales-tax exemption is new to me. I had to reread the beginning of the article before it really hit me.

evan_ 15y ago
Keep in mind that they're already sale-tax exempt in Texas. They don't have any locations in Texas, therefore they don't have to charge sales tax. They want to open a facility in Texas, but they don't want to have to start charging sales tax. Doesn't hurt to ask.
- daniel_solano 15y ago
  Actually, they have had a facility in Texas for some time that they were planning on expanding. Last year, the comptroller demanded they pay back something on the order of $600M in back taxes and penalties.
  - evan_ 15y ago
    oh, then it doesn't make any sense.
- pcarmichael 15y ago
  Without a presence in Texas, Amazon is not obligated to collect sales tax. However, the customer must then pay a 'use tax', which is the same rate as the sales tax: http://www.window.state.tx.us/taxinfo/sales/faq_use.html http://www.window.state.tx.us/taxinfo/sales/faq_use.html What the public in general seems to miss is that the tax revenue is due one way or another - either Amazon collects or customers self pay. Most of the public who are not business owners do not realize they need to self pay - it is neither enforced nor made obvious that one needs to do so. So instead of making the public aware of 'use tax' and trying to enforce it, the Texas legislature is trying to change the definition of an in-state presence to include independent subsidiaries, affiliates, etc. Then by doing so, the government can force the merchant to collect the taxes owed for them. The first 'internet sales tax' bill was passed by the legislature but vetoed by the governor. Similar language was added to an omnibus spending bill, which is much more likely to survive.

shib71 15y ago

The idea that it is valid to insert arbitrary and tangential (if not completely unrelated) laws into bills is something about the American system that baffles me.

SkyMarshal 15y ago
It's nuts, do other countries have a solution to this?

giardini 15y ago

This appears to be a violation of the equal protection clause of the 14th Amendment. If Texas can do this for Amazon may I also request it for _my_ Texas corporation? Can I get a better deal than Amazon's? Do we now all haggle with the state about how much tax we pay?

sixtofour 15y ago

I could go the rest of my life without buying a book. There's enough information and entertainment on the Internet and among my friends. If corporations and states require me, the consumer, to keep track of their bookkeeping for them, indeed make it dangerous to purchase something online when I don't have the time, inclination or ability to find out where each vendor's presence happens to be, I might just opt out entirely. It's the safe thing to do.