11 ms·

Amazon.com cuts California sales tax deal in stunning turnabout

85 points by scommab 15y ago

aero142 15y ago
I'm unsure of what Amazon's long term plan is. Is it their hope that Congress deals with this on a national level and makes it workable? They just don't want to deal with the mess on a state by state basis?
- bh42222 15y ago
  I'm guessing for California they'll lobby to extend it for another year, and another year, etc... Nationally, I'm not sure Congress can force non-taxation on the sates, I think that's a constitutional issue. I think Amazon's plan there is just to use their market dominance and hope the states fold.
  - gte910h 15y ago
    Interstate commerce clause allows them to most likely.
  - msumpter 15y ago
    Or maybe just buy them enough time to close up operations in an orderly fashion and leave California. I'm not sure if Amazon has a physical presence in the state but if they have a distribution plant or other company owned assets this will give them time to relocate. I believe Amazon had already notified their affiliates that they were terminating the relationship when the law was passed (similar to what they do when other states passed nexus provisions).
    - gojomo 15y ago
      Somewhat unlikely. Amazon has a number of wholly-owned subsidiaries in California with sizable technical staffs: A9 (search; Palo Alto), A2Z (mobile/media product development; 5 California offices), Alexa (analytics; San Francisco), and probably others. There's also a Northern California EC2 Region. That's a very strong 'nexus' that would cost them a lot (in money and talent) to uproot. I suspect Amazon sees the way things are going and (as in other states) have tried to get what forbearance they can while they can, and also expect a national harmonization of cross-state sales taxes at some point.
      - nknight 15y ago
        You've just cited a bunch of companies that are separate entities owned by Amazon. US courts have a very strong presumption against attributing the acts, economic or otherwise, of a corporation to its owners. It would be virtually impossible for California to win in court on the grounds of A9, A2Z, Alexa, or Amazon AWS having offices in California. None of those companies are involved in Amazon.com's separate retail business.
        gojomo 15y ago
        Most individual states would disagree, especially when the wholly-owned subsidiary exists primarily to avoid taxes. If Amazon's technique was legally unassailable, they wouldn't be paying sales tax even in the 5 states where they already do. They'd just assign whatever creates 'nexus' in those states to new 'non-selling' subsidiaries.
        nknight 15y ago
        Piercing the corporate veil becomes easier the more closely integrated the companies and their management structure are. Amazon can maintain arms-length relations with most of their subsidiaries because those subsidiaries are not part of Amazon's core business, and can operate semi-independently with little to no loss in efficiency. Maintaining such a relationship with subsidiaries directly involved in the day-to-day operations of Amazon's retail business (maintaining stock, setting prices, making sales, packing and shipping product, etc.) would be much more difficult, costly, and risky.
        aphexairlines 15y ago
        How are a9 and a2z not involved in retail?
        nknight 15y ago
        Company A buys software from company B to carry on its business. Company B does not become liable for the acts of Company A. A9 and A2Z are providing software and/or services to Amazon.com which Amazon.com uses in its retail business. This is completely different from A9 and A2Z engaging in that business. They do not buy, sell, distribute, or ship the products Amazon.com does. So long as Amazon.com maintains arms-length dealings with A9 and A2Z (which is trivially easy for any company with semi-competent legal counsel to accomplish), the ownership of A9 and A2Z is irrelevant to Amazon.com's dealings with California.
  - nknight 15y ago
    It's not even non-taxation. It's the fact that no two states with sales taxes have the same rates (which can also vary by locality), rules about what it applies to, or filing mechanism. Amazon and everyone else involved in ecommerce would be a lot happier if there were a unified system/database for dealing with sales taxes in the US. Rates and rules wouldn't necessarily have to be the same, but there at least has to be one system with unified categorization of products and a unified filing mechanism which can be automatically queried, and as long as the merchants use that system in good faith, they would need to be immune to any sort of lawsuit or prosecution for not meeting the actual legal requirements of any particular state/locality.
    - halostatue 15y ago
      The varying rates aren't a problem, for certain; Amazon deals with those just fine in various localities (Canada has approximately 10 different rates; I don't think that cities are allowed to put additional sales taxes, as that's reserved to the federal government and the provinces/territories). What's problematic for Amazon (IMO) is the wildly varying applicability rules and filing mechanisms. I think your idea of a unified sales tax database/system is spot on.
      - weaksauce 15y ago
        In California there are different tax rates for every county in the state. see http://www.boe.ca.gov/cgi-bin/rates.cgi http://www.boe.ca.gov/cgi-bin/rates.cgi
        shoota 15y ago
        They have different rates even down to the city level take a look here http://www.boe.ca.gov/cgi-bin/rates.cgi?LETTER=A&LIST=CITY http://www.boe.ca.gov/cgi-bin/rates.cgi?LETTER=A&LIST=CI...
        hga 15y ago
        In my home town of only 50K (before the tornado, it's Joplin, MO) there are sections of the town with their own additional sales tax, the theory is to improve that particular business district or to pay for the city's contributions to it (e.g. intersection upgrades). On thing I'm noticing as I work with receipts for my insurance claim is that of the three Wal-Marts in two cities we did and now shop at (the one we used to exclusively go to was destroyed and is rebuilding) each has two different sales tax rates (don't forget that rates also depend on what is being bought, e.g. food of certain types is taxed less). And then there is the statewide state sales tax holiday for certain back to school supplied in late August.... This is serious nightmare ... but much less so for a company of Amazon.com's scale than a potentially dangerous to it upstart.
- gte910h 15y ago
  Not even state by state. County by county and municipality by municipality. What's taxable, how much, etc.
- joezydeco 15y ago
  From another point of view: what if you're not Amazon and doing online retail in California? Amazon now has a one-year price advantage. Is it enough to disrupt market share in that state?
  - ericabiz 15y ago
    Amazon is not currently collecting sales tax in California, so there's no change until Sept. 2012, when it will start collecting sales tax in CA (assuming this goes through.) It's business as usual until then.
    - joezydeco 15y ago
      Everyone selling things online in California is supposed to be collecting sales tax as of July 1st. This delay until September 2012 applies only to Amazon. Everyone else selling online in CA with similar areas (Zappos, Barnes and Noble, etc) still needs to pay the tax this year.
      - yohui 15y ago
        > Everyone else selling online in CA with similar areas (Zappos, Barnes and Noble, etc) still needs to pay the tax this year. As Amazon owns Zappos, I would have assumed that they'd be covered by such a deal as well.
- w1ntermute 15y ago
  We'll have elections in November 2012. They might be planning to buy off enough politicians with campaign donations to get a more permanent measure passed before September.
- mikek 15y ago
  They want to deal on an even playing field with other online retailers. They don't want to have to collect tax in a state that their competitors do not. A nationwide solution would make them happy.
  - hga 15y ago
    Ah, but for a company as big and established as Amazon it will be anything but an even field. One reason they're all for this is that it would hinder upstarts the might threaten them.
staunch 15y ago
So does this mean Amazon is going to allow CA affiliates again?
- getsat 15y ago
  fingers crossed
impendia 15y ago
Very good! I can start shopping Amazon again with a clear conscience. I say this not as sarcasm but as literal truth. I know many HN'ers disagree that they were doing anything wrong -- but personally, their behavior turned my stomach and I was avoiding buying anything from them which I could easily get elsewhere.
- tzs 15y ago
  Couldn't you buy from Amazon and then report the purchase (as required by California law) to the State and pay the tax?
  - mpyne 15y ago
    Sure, but doing so is practically harder even than itemizing your taxes. It's not like you can just PayPal the money over right when you make the purchase.
  - impendia 15y ago
    Sure. But that doesn't change the fact that Amazon tried to weasel out of charging the same sales tax as every other retailer who sells books in California; that they were going to try and get legally guaranteed special treatment by promoting a state referendum (as other corporations have also done); and that they abruptly screwed over their 10,000 affiliates in the state.
    - tzs 15y ago
      There are plenty of retailers who sell books to California residents without collecting sales tax. (And the other way around--I, in Washington, have bought books from California retailers who did not collect Washington sales tax).
reemrevnivek 15y ago
> While Democrats and Gov. Jerry Brown fretted that they would lose $200 million a year in sales taxes California residents are supposed to pay use tax on internet purchases regardless of the physical presence of the retailer, right? Running the math: the $200 million/year loss that they claim is an estimate on tax fraud on just Amazon purchases? At a 7.25% tax rate, that's a tax on $2.7 billion in sales, and Amazon's US sales last year were 18.7 billion [1]. They're estimating that unreported purchases in California comprise 14% of Amazon's revenue in the US. California comprises about 12% of the US population. The assumption is invalid, because 14% is greater than 12% - but, assuming it's reasonably close, we can still say that either (1) the politicians are ignoring the use tax or (2) there is a massive amount of fraud going on in use tax reporting. [1] http://www.internetretailer.com/2011/01/27/amazon-sales-and-profits-boom-2010 http://www.internetretailer.com/2011/01/27/amazon-sales-and-...
- joshhart 15y ago
  The assumption doesn't have to be invalid. California citizens may be wealthier than those other states and spend more money on Amazon goods. California may also have more computer users with decent internet access than, say, Wyoming.
- Locke1689 15y ago
  Just because the percent of Amazon's revenue from California is greater than the proportional population of California relative to the US doesn't make it invalid. You need a purchase distribution function to make that claim.
- quandrum 15y ago
  > California comprises about 12% of the US population. The assumption is invalid, because 14% is greater than 12% I'm not sure that it's that far fetched that a tech oriented culture like California would buy on average more goods from Amazon then other areas of the US.
- mediaman 15y ago
  The rate of buying products online isn't going to be the same in every state, and it's reasonable that it would be slightly higher in CA than in other states. And on use-tax: have anyone ever met someone who paid use-tax on goods purchased from Amazon? Most consumers don't even know they're supposed to, and audit enforcement is expensive and therefore uncommon.
ck2 15y ago
For some reason I cannot see the article linked. Using this instead http://news.google.com/news/story?ncl=dZ6jw2rLSA2UmxMxmSxu9FWhtEgWM http://news.google.com/news/story?ncl=dZ6jw2rLSA2UmxMxmSxu9F... I guess this is the critical line: If Amazon cannot get a change in federal tax policy by next June it will start collecting the tax in September 2012. So I guess the door is now open and every state will go after amazon for sales tax.
shithead 15y ago
Just FYI: in Europe, Amazon collects VAT at the buyers' local rate. For example, when shipping books from the UK (which has zero VAT on books), the bill includes VAT at the destination country's rate.
- ars 15y ago
  Does VAT vary per county? Or also by smaller areas? If it's just per country it's not that hard to do.
  - shoota 15y ago
    How about per city which is the level at which sales tax can vary in California?
kposehn 15y ago
There is a very important aspect of this whole mess that is left out: The legislation, which affects affiliates, would be repealed under the deal as it stood this morning. At this time I don't know if that stuck.
cletus 15y ago
While most like the trumpet the enumerated protections of the Constitution that the US enjoys, this is (IMHO) an example of where the wording and the intent of the Constitution is outdated. Most developed nations have some for of consumption/sales tax. In the EU it's typically 17.5-25%, in Australia it's 10%, in Switzerland it's ~7% and so on. America has this on a state by state basis. Nowadays the split jurisdiction with interstate commerce is now awkward and unwieldy. I believe that in the coming years the Federal government will act to enforce an interstate sales tax and maybe even a tax on imports. The path of least resistance here is for the sales tax due to be the sales tax that applies in the state of the recipient. I'm not sure how much revenue that would raise but my guess is a lot. As for Amazon, I'm not sure what they're thinking. In a year they'll have the same problem. One would think they're confident of Federal action in the next year on online sales taxes or they think the climate will have changed in a year. I'm not convinced of either. Are they that desperate that a year's delay is a win for them? While we're at it, what's up with New York? Amazon collects sales tax for the state of New York while it (thus far unsuccessfully) has tried to challenge the "Amazon tax" in the courts. Is New York a test case? Are the affiliates in New York that much more valuable?
- calloc 15y ago
  I thought it was because Amazon had an physical presence in the state of new york...
- nostromo 15y ago
  This is a classic case of "who moved my cheese." Sales tax used to make sense -- but it's trivial to avoid with the advent of e-commerce. Instead of struggling to preserve the small e-commerce portion of this small revenue stream (California is looking for $200 million in revenue from Amazon a year while the state budget is over $100 billion) the states should find other sources of revenue or cut spending.
- pyre 15y ago
  > Most developed nations have some for of > consumption/sales tax. In the EU it's typically > 17.5-25%, in Australia it's 10%, in Switzerland it's > ~7% and so on. America has this on a state by state > basis. 1. It's nice in that I live in Oregon and there is no sales tax. :P 2. Canada has provincial sales tax and a national sales tax, so the overall sales tax is still 'state-by-state.'
gergles 15y ago
I am really disappointed to hear this news, actually. I would rather Amazon have fought the state's clear attempt to unconstitutionally tax interstate commerce and gotten clear precedent that forcing companies without a physical presence in a state to collect sales tax there is bullshit. It's the same reason why I do not believe in 'use tax'. It is a tax which exists solely to tax interstate commerce (which is exclusively the domain of the Federal government) that I am stunned nobody has attempted to fight yet. The argument that "Amazon gets an unfair advantage abloobloo" is garbage -- Amazon has to pay a local company to ultimately get the items to you, which absolutely does pay local tax - UPS has to buy gas in California, pay employees in California (and pay the associated exorbitant California payroll tax), pay for inspections, facilities, etc... The state is collecting their pound of flesh out of the transaction in one way or another. (Not to mention the complexities of the tax code that aren't even consistent on a ZIP code basis - it's the last weekend of August, you're shipping to an address covered by the HRT district in Virginia Beach, VA, and you're selling a $105 bikini. For $500, what's the tax rate? Hint: all of those factors (date, exact location down to the house number, price, item type) play into how much the tax rate is. It is not a naive lookup table of "zip code: tax rate".)
- rphlx 15y ago
  I've never seen a UPS truck at a regular gas station. Perhaps they too found some way around retail gasoline taxes.
  - brianobush 15y ago
    they pay taxes, but the rate might be lower for commercial diesel like it is for farm use.
    - repiret 15y ago
      Some of the taxes you pay on gasoline and diesel are meant to be public road use taxes. If you're not burning the gas by driving on a public road, they don't need to be paid. You can apply for a rebate based on how much you burnt off-road (for example, you have a logging truck that burns 10% of its gas on private logging roads). If you have an engine that you use exclusively off-road (such as in farm equipment), you can buy whats called pink diesel or dyed diesel. You don't have to pay the public road use taxes on pink diesel, but it stains your engine. The engine of a vehicle used on public roads can be inspected to see if its ever burned pink diesel, and if it has, you get in trouble.

85 points by scommab 15y ago

I'm unsure of what Amazon's long term plan is. Is it their hope that Congress deals with this on a national level and makes it workable? They just don't want to deal with the mess on a state by state basis?

bh42222 15y ago
I'm guessing for California they'll lobby to extend it for another year, and another year, etc... Nationally, I'm not sure Congress can force non-taxation on the sates, I think that's a constitutional issue. I think Amazon's plan there is just to use their market dominance and hope the states fold.
- gte910h 15y ago
  Interstate commerce clause allows them to most likely.
- msumpter 15y ago
  Or maybe just buy them enough time to close up operations in an orderly fashion and leave California. I'm not sure if Amazon has a physical presence in the state but if they have a distribution plant or other company owned assets this will give them time to relocate. I believe Amazon had already notified their affiliates that they were terminating the relationship when the law was passed (similar to what they do when other states passed nexus provisions).
  - gojomo 15y ago
    Somewhat unlikely. Amazon has a number of wholly-owned subsidiaries in California with sizable technical staffs: A9 (search; Palo Alto), A2Z (mobile/media product development; 5 California offices), Alexa (analytics; San Francisco), and probably others. There's also a Northern California EC2 Region. That's a very strong 'nexus' that would cost them a lot (in money and talent) to uproot. I suspect Amazon sees the way things are going and (as in other states) have tried to get what forbearance they can while they can, and also expect a national harmonization of cross-state sales taxes at some point.
    - nknight 15y ago
      You've just cited a bunch of companies that are separate entities owned by Amazon. US courts have a very strong presumption against attributing the acts, economic or otherwise, of a corporation to its owners. It would be virtually impossible for California to win in court on the grounds of A9, A2Z, Alexa, or Amazon AWS having offices in California. None of those companies are involved in Amazon.com's separate retail business.
      - gojomo 15y ago
        Most individual states would disagree, especially when the wholly-owned subsidiary exists primarily to avoid taxes. If Amazon's technique was legally unassailable, they wouldn't be paying sales tax even in the 5 states where they already do. They'd just assign whatever creates 'nexus' in those states to new 'non-selling' subsidiaries.
        nknight 15y ago
        Piercing the corporate veil becomes easier the more closely integrated the companies and their management structure are. Amazon can maintain arms-length relations with most of their subsidiaries because those subsidiaries are not part of Amazon's core business, and can operate semi-independently with little to no loss in efficiency. Maintaining such a relationship with subsidiaries directly involved in the day-to-day operations of Amazon's retail business (maintaining stock, setting prices, making sales, packing and shipping product, etc.) would be much more difficult, costly, and risky.
      - aphexairlines 15y ago
        How are a9 and a2z not involved in retail?
        nknight 15y ago
        Company A buys software from company B to carry on its business. Company B does not become liable for the acts of Company A. A9 and A2Z are providing software and/or services to Amazon.com which Amazon.com uses in its retail business. This is completely different from A9 and A2Z engaging in that business. They do not buy, sell, distribute, or ship the products Amazon.com does. So long as Amazon.com maintains arms-length dealings with A9 and A2Z (which is trivially easy for any company with semi-competent legal counsel to accomplish), the ownership of A9 and A2Z is irrelevant to Amazon.com's dealings with California.
- nknight 15y ago
  It's not even non-taxation. It's the fact that no two states with sales taxes have the same rates (which can also vary by locality), rules about what it applies to, or filing mechanism. Amazon and everyone else involved in ecommerce would be a lot happier if there were a unified system/database for dealing with sales taxes in the US. Rates and rules wouldn't necessarily have to be the same, but there at least has to be one system with unified categorization of products and a unified filing mechanism which can be automatically queried, and as long as the merchants use that system in good faith, they would need to be immune to any sort of lawsuit or prosecution for not meeting the actual legal requirements of any particular state/locality.
  - halostatue 15y ago
    The varying rates aren't a problem, for certain; Amazon deals with those just fine in various localities (Canada has approximately 10 different rates; I don't think that cities are allowed to put additional sales taxes, as that's reserved to the federal government and the provinces/territories). What's problematic for Amazon (IMO) is the wildly varying applicability rules and filing mechanisms. I think your idea of a unified sales tax database/system is spot on.
    - weaksauce 15y ago
      In California there are different tax rates for every county in the state. see http://www.boe.ca.gov/cgi-bin/rates.cgi http://www.boe.ca.gov/cgi-bin/rates.cgi
      - shoota 15y ago
        They have different rates even down to the city level take a look here http://www.boe.ca.gov/cgi-bin/rates.cgi?LETTER=A&LIST=CITY http://www.boe.ca.gov/cgi-bin/rates.cgi?LETTER=A&LIST=CI...
        hga 15y ago
        In my home town of only 50K (before the tornado, it's Joplin, MO) there are sections of the town with their own additional sales tax, the theory is to improve that particular business district or to pay for the city's contributions to it (e.g. intersection upgrades). On thing I'm noticing as I work with receipts for my insurance claim is that of the three Wal-Marts in two cities we did and now shop at (the one we used to exclusively go to was destroyed and is rebuilding) each has two different sales tax rates (don't forget that rates also depend on what is being bought, e.g. food of certain types is taxed less). And then there is the statewide state sales tax holiday for certain back to school supplied in late August.... This is serious nightmare ... but much less so for a company of Amazon.com's scale than a potentially dangerous to it upstart.
gte910h 15y ago
Not even state by state. County by county and municipality by municipality. What's taxable, how much, etc.
joezydeco 15y ago
From another point of view: what if you're not Amazon and doing online retail in California? Amazon now has a one-year price advantage. Is it enough to disrupt market share in that state?
- ericabiz 15y ago
  Amazon is not currently collecting sales tax in California, so there's no change until Sept. 2012, when it will start collecting sales tax in CA (assuming this goes through.) It's business as usual until then.
  - joezydeco 15y ago
    Everyone selling things online in California is supposed to be collecting sales tax as of July 1st. This delay until September 2012 applies only to Amazon. Everyone else selling online in CA with similar areas (Zappos, Barnes and Noble, etc) still needs to pay the tax this year.
    - yohui 15y ago
      > Everyone else selling online in CA with similar areas (Zappos, Barnes and Noble, etc) still needs to pay the tax this year. As Amazon owns Zappos, I would have assumed that they'd be covered by such a deal as well.
w1ntermute 15y ago
We'll have elections in November 2012. They might be planning to buy off enough politicians with campaign donations to get a more permanent measure passed before September.
mikek 15y ago
They want to deal on an even playing field with other online retailers. They don't want to have to collect tax in a state that their competitors do not. A nationwide solution would make them happy.
- hga 15y ago
  Ah, but for a company as big and established as Amazon it will be anything but an even field. One reason they're all for this is that it would hinder upstarts the might threaten them.

staunch 15y ago

So does this mean Amazon is going to allow CA affiliates again?

getsat 15y ago
fingers crossed

impendia 15y ago

Very good! I can start shopping Amazon again with a clear conscience. I say this not as sarcasm but as literal truth. I know many HN'ers disagree that they were doing anything wrong -- but personally, their behavior turned my stomach and I was avoiding buying anything from them which I could easily get elsewhere.

tzs 15y ago
Couldn't you buy from Amazon and then report the purchase (as required by California law) to the State and pay the tax?
- mpyne 15y ago
  Sure, but doing so is practically harder even than itemizing your taxes. It's not like you can just PayPal the money over right when you make the purchase.
- impendia 15y ago
  Sure. But that doesn't change the fact that Amazon tried to weasel out of charging the same sales tax as every other retailer who sells books in California; that they were going to try and get legally guaranteed special treatment by promoting a state referendum (as other corporations have also done); and that they abruptly screwed over their 10,000 affiliates in the state.
  - tzs 15y ago
    There are plenty of retailers who sell books to California residents without collecting sales tax. (And the other way around--I, in Washington, have bought books from California retailers who did not collect Washington sales tax).

reemrevnivek 15y ago

> While Democrats and Gov. Jerry Brown fretted that they would lose $200 million a year in sales taxes California residents are supposed to pay use tax on internet purchases regardless of the physical presence of the retailer, right? Running the math: the $200 million/year loss that they claim is an estimate on tax fraud on just Amazon purchases? At a 7.25% tax rate, that's a tax on $2.7 billion in sales, and Amazon's US sales last year were 18.7 billion [1]. They're estimating that unreported purchases in California comprise 14% of Amazon's revenue in the US. California comprises about 12% of the US population. The assumption is invalid, because 14% is greater than 12% - but, assuming it's reasonably close, we can still say that either (1) the politicians are ignoring the use tax or (2) there is a massive amount of fraud going on in use tax reporting. [1] http://www.internetretailer.com/2011/01/27/amazon-sales-and-profits-boom-2010 http://www.internetretailer.com/2011/01/27/amazon-sales-and-...

joshhart 15y ago
The assumption doesn't have to be invalid. California citizens may be wealthier than those other states and spend more money on Amazon goods. California may also have more computer users with decent internet access than, say, Wyoming.
Locke1689 15y ago
Just because the percent of Amazon's revenue from California is greater than the proportional population of California relative to the US doesn't make it invalid. You need a purchase distribution function to make that claim.
quandrum 15y ago
> California comprises about 12% of the US population. The assumption is invalid, because 14% is greater than 12% I'm not sure that it's that far fetched that a tech oriented culture like California would buy on average more goods from Amazon then other areas of the US.
mediaman 15y ago
The rate of buying products online isn't going to be the same in every state, and it's reasonable that it would be slightly higher in CA than in other states. And on use-tax: have anyone ever met someone who paid use-tax on goods purchased from Amazon? Most consumers don't even know they're supposed to, and audit enforcement is expensive and therefore uncommon.

ck2 15y ago

For some reason I cannot see the article linked. Using this instead http://news.google.com/news/story?ncl=dZ6jw2rLSA2UmxMxmSxu9FWhtEgWM http://news.google.com/news/story?ncl=dZ6jw2rLSA2UmxMxmSxu9F... I guess this is the critical line: If Amazon cannot get a change in federal tax policy by next June it will start collecting the tax in September 2012. So I guess the door is now open and every state will go after amazon for sales tax.

shithead 15y ago

Just FYI: in Europe, Amazon collects VAT at the buyers' local rate. For example, when shipping books from the UK (which has zero VAT on books), the bill includes VAT at the destination country's rate.

ars 15y ago
Does VAT vary per county? Or also by smaller areas? If it's just per country it's not that hard to do.
- shoota 15y ago
  How about per city which is the level at which sales tax can vary in California?

kposehn 15y ago

There is a very important aspect of this whole mess that is left out: The legislation, which affects affiliates, would be repealed under the deal as it stood this morning. At this time I don't know if that stuck.

cletus 15y ago

While most like the trumpet the enumerated protections of the Constitution that the US enjoys, this is (IMHO) an example of where the wording and the intent of the Constitution is outdated. Most developed nations have some for of consumption/sales tax. In the EU it's typically 17.5-25%, in Australia it's 10%, in Switzerland it's ~7% and so on. America has this on a state by state basis. Nowadays the split jurisdiction with interstate commerce is now awkward and unwieldy. I believe that in the coming years the Federal government will act to enforce an interstate sales tax and maybe even a tax on imports. The path of least resistance here is for the sales tax due to be the sales tax that applies in the state of the recipient. I'm not sure how much revenue that would raise but my guess is a lot. As for Amazon, I'm not sure what they're thinking. In a year they'll have the same problem. One would think they're confident of Federal action in the next year on online sales taxes or they think the climate will have changed in a year. I'm not convinced of either. Are they that desperate that a year's delay is a win for them? While we're at it, what's up with New York? Amazon collects sales tax for the state of New York while it (thus far unsuccessfully) has tried to challenge the "Amazon tax" in the courts. Is New York a test case? Are the affiliates in New York that much more valuable?

calloc 15y ago
I thought it was because Amazon had an physical presence in the state of new york...
nostromo 15y ago
This is a classic case of "who moved my cheese." Sales tax used to make sense -- but it's trivial to avoid with the advent of e-commerce. Instead of struggling to preserve the small e-commerce portion of this small revenue stream (California is looking for $200 million in revenue from Amazon a year while the state budget is over $100 billion) the states should find other sources of revenue or cut spending.
pyre 15y ago
> Most developed nations have some for of > consumption/sales tax. In the EU it's typically > 17.5-25%, in Australia it's 10%, in Switzerland it's > ~7% and so on. America has this on a state by state > basis. 1. It's nice in that I live in Oregon and there is no sales tax. :P 2. Canada has provincial sales tax and a national sales tax, so the overall sales tax is still 'state-by-state.'

gergles 15y ago

I am really disappointed to hear this news, actually. I would rather Amazon have fought the state's clear attempt to unconstitutionally tax interstate commerce and gotten clear precedent that forcing companies without a physical presence in a state to collect sales tax there is bullshit. It's the same reason why I do not believe in 'use tax'. It is a tax which exists solely to tax interstate commerce (which is exclusively the domain of the Federal government) that I am stunned nobody has attempted to fight yet. The argument that "Amazon gets an unfair advantage abloobloo" is garbage -- Amazon has to pay a local company to ultimately get the items to you, which absolutely does pay local tax - UPS has to buy gas in California, pay employees in California (and pay the associated exorbitant California payroll tax), pay for inspections, facilities, etc... The state is collecting their pound of flesh out of the transaction in one way or another. (Not to mention the complexities of the tax code that aren't even consistent on a ZIP code basis - it's the last weekend of August, you're shipping to an address covered by the HRT district in Virginia Beach, VA, and you're selling a $105 bikini. For $500, what's the tax rate? Hint: all of those factors (date, exact location down to the house number, price, item type) play into how much the tax rate is. It is not a naive lookup table of "zip code: tax rate".)

rphlx 15y ago
I've never seen a UPS truck at a regular gas station. Perhaps they too found some way around retail gasoline taxes.
- brianobush 15y ago
  they pay taxes, but the rate might be lower for commercial diesel like it is for farm use.
  - repiret 15y ago
    Some of the taxes you pay on gasoline and diesel are meant to be public road use taxes. If you're not burning the gas by driving on a public road, they don't need to be paid. You can apply for a rebate based on how much you burnt off-road (for example, you have a logging truck that burns 10% of its gas on private logging roads). If you have an engine that you use exclusively off-road (such as in farm equipment), you can buy whats called pink diesel or dyed diesel. You don't have to pay the public road use taxes on pink diesel, but it stains your engine. The engine of a vehicle used on public roads can be inspected to see if its ever burned pink diesel, and if it has, you get in trouble.