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> "Enforcing a reporting requirement on out-of-state retailers will, by definition, discriminate against the out-of-state retailers by imposing unique burdens o

• binarycrusader 15y ago
  I'm sorry, but the whole tax system is broken anyway. Online retailers (excluding the shell games that some companies play) do not benefit from a state's services, so why should they bear the burden of collecting taxes for that state? Most states have a use tax that is the responsibility of the taxpayer to pay to make up for this; I should know, I just filed my taxes and paid it.
  • enjo 15y ago
    They benefit because the people paying them money have the infrastructure to get to work to make the money to pay them. Everything is always connected.
    • waterlesscloud 15y ago
      The taxes are owed by the citizen/purchaser regardless. If the citizens are choosing to not pay it, how is that the retailer's issue?
      • jacobolus 15y ago
        Because in practice those taxes can’t be collected from consumers. Which means that Amazon gets a big unfair advantage vs. local stores. It’s stupid to have a reverse-tariff only charged to local businesses, because purchases from out of state send profits away, harming the state economy. Ultimately, states should probably scrap sales taxes and raise capital gains, inheritance, property, and income taxes to compensate. Those are all tough politically/legislatively though.
        • anigbrowl 15y ago
          Which means that Amazon gets a big unfair advantage vs. local stores. What's unfair about it? They're not consuming any resources within the state, like Brick & Mortar merchants, who have an advantage of their own - physical stores to bring people in and sell them stuff on the spot.
          • dkrich 15y ago
            Which resources are consumed by brick and mortars that are not consumed by online retailers? I'm genuinely curious.
            • skeeterbug 15y ago
              Roads, utilities, buildings have to be inspected by fire dept, etc.
              • rprasad 15y ago
                I wasn't aware that Amazon has developed teleportation technology that avoids using roads to deliver purchased goods. No wonder they've been doing so well.
                • anigbrowl 15y ago
                  UPS, Fedex, etc. already pay property and gasoline and vehicle taxes. Those externalities are accounted for. For those downvoting comments above, doing so isn't going to alter that fact.
                  • pbreit 15y ago
                    The fact is they _are_ consuming resources in the various states their customers reside.
                  • dkrich 15y ago
                    Once again, every brick and mortar pays a for-profit for nearly every service that enables it to do business, so that argument does not hold water.
      • dkrich 15y ago
        Why should that apply only to internet retailers? By that logic it should be any store's discretion whether or not to charge for sales tax.
  • dkrich 15y ago
    >Online retailers (excluding the shell games that some companies play) do not benefit from a state's services, so why should they bear the burden of collecting taxes for that state? Really? That's interesting, I always thought these roads I drive on were paid for by the state. I don't really see many state-enabled services that brick-and-mortar's consume that internet retailers don't.
    • bdonlan 15y ago
      The online retailer pays shipping companies, and those shipping companies do indeed have a nexus in the state and pay various taxes as appropriate. One could argue that asking the retailer to pay as well is a form of double-dipping.
      • dkrich 15y ago
        That argument could be extended to any business operating anywhere. If we only paid taxes based upon what we directly consume from the government, I don't think many businesses would be collecting sales taxes. Your lease is paid to a landlord. Your inventory is purchased from a distributor. Your insurance premium is paid to an insurance company.
        • cagey 15y ago
          So, I, in California, buy something from Amazon, which pays Fedex to ship it from out of state to me. Fedex pays "gas taxes" in CA, and other CA taxes too[1]. If Fedex ships my pkg by air, there are at least additionally airport fees/taxes. Since Fedex is not going bankrupt, it seems Amazon is at least paying Fedex enough to offset these expenses, so Amazon is in effect, through Fedex, paying these CA taxes (the same ones that in-state B&M stores would be paying for shipping a purchase to me, or that I would be paying if I bought an item at a local B&M store and transported it in my own motor vehicle). Now, in my understanding, the purpose of these taxes is to pay for the "services" CA is providing to the taxpayer (in this case, Fedex, and, indirectly, Amazon). For a shipper, "services" would include construction and maintenance of (and bureaucratic overhead associated with) the roads, bridges, airports, etc. But in your opinion Amazon is skating on their responsibility and should in addition charge sales tax to the customer (apparently for additional "services provided by the state" not covered by the above)? What are these additional services Amazon is receiving (in this transaction) from CA that are not being paid for via [[the above-mentioned]] taxes? [1] http://www.dmv.ca.gov/vehindustry/mcp/mcpfaq.htm#what http://www.dmv.ca.gov/vehindustry/mcp/mcpfaq.htm#what [[edit]]
• ars 15y ago
  You are misreading it. Blackburn is not comparing in state and out state. He's talking exclusively about out of state. The state has no power to regulate out of state companies. No matter how much the state wants to, it just doesn't have that power. What Blackurn is saying is that the regulations are imposing burdens on those retailers, and the the state has no legal right to do so.
  • dkrich 15y ago
    > The state has no power to regulate out of state companies. No matter how much the state wants to, it just doesn't have that power. I don't think that's an accurate interpretation. I believe what the judge was saying was that the law, as written, was vague and put an undue burden on out-of-state retailers. That is unconstitutional because it discriminates against a set of retailers by forcing those businesses to complete a unique burden (complex paperwork) that in-state retailers do not. Essentially, the law was intended to create an incentive for internet retailers to collect sales tax by requiring that they complete a ridiculous procedure if they do not. That is the undue burden.
  • rprasad 15y ago
    All states have the power to regulate companies doing business in their states. However, they cannot discriminate against out-of-state businesses. The same laws must apply to both in-state and out-of-state businesses. Unfortunately, by virtue of their business model, catalog/on-line stores must be discriminated against because they do not operate in the same manner as physical stores.
• baddox 15y ago
  State taxes should discriminate against in-state retailers, since people who live in the state are the ones that vote on the taxes. That's how laws should and do work: county property taxes discriminate against property owners in that county, speed limits apply to drivers on that road, etc.
  • Steko 15y ago
    The analogy doesn't hold. If I live just across the border from a dominos pizza and they deliver me a pizza the driver has to obey the speed limit but somehow according to this case he gets to ignore the sales tax of my state? Sales tax looks like it should be charged at the physical point of the transaction. If Amazon creates a store in my living room through the magic of the internet that's a transaction that happens in my living room and should probably be subject to my state's sales tax.
    • Turing_Machine 15y ago
      "If Amazon creates a store in my living room through the magic of the internet" Why should that count as "creating a store", when taking telephone orders or sending out mail-order catalogs doesn't?
      • timdev2 15y ago
        I suppose the argument is that taking phone or postal orders should count, but never has, because it wasn't worth it to try to collect those taxes.
        • Turing_Machine 15y ago
          There have, in fact, been attempts to collect similar taxes in the past. They were always shot down by the courts. http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=us&vol=386&invol=753 http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=us&#3... http://caselaw.lp.findlaw.com/cgi-bin/getcase.pl?court=us&vol=347&invol=340 http://caselaw.lp.findlaw.com/cgi-bin/getcase.pl?court=us&#3...
• AsylumWarden 15y ago
  Huh? Not paying taxes on out-of-state purchases will cause the price of in-state purchases to go up? Significantly? Maybe if the state government raises taxes on the in-state sellers to compensate for perceived loss of revenue due to out-of-state purchases. That is the state's fault. Mom-and-pop shops don't go out of business because their prices are rising. They go out of business because they are trying to keep their prices low to compete with larger businesses all the more complicated by a greedy state that is trying to tax them because they qualify as "wealthy". The tax system is broken and it won't be fixed because of political and/or idiot-in-the-street greed. No one asked but there's my two cents.
  • timdev2 15y ago
    Surely you're oversimplifying and playing a bit dumb. The fact that an in-state business has to collect sales tax, and an out-of-state entity doesn't, coupled with the fact that it's not feasible to enforce sales/use tax against individuals, means that out-of-state merchants get an relative price advantage. At the end of the day, it's a lot like what's happened to the recording industry. The internet disrupted a long-established model that had been built up around physical artifacts. In the case of sales tax, consumers used to spend most of their money with merchants in their own state. This made it easy to establish and enforce sales and use taxes, because the state government had jurisdiction on both parties to the sale, so they could devise a collection mechanism based around the relatively small number of merchants (as opposed to trying to track the relatively larger number of individual consumers). In the past 1.N decades, a lot of that economic activity that used to be intra-state has become inter-state. And this has, predictably, caused a very real problem for state governments who depend heavily on those sales/use tax revenues. Tax reform is absolutely necessary. In this case, the smartest thing is probably to abandon sales taxes in favor of higher state income taxes. The benefit there is that income taxes are more progressive anyway. But the states need to weigh the risk of capital flight. The other, less palatable, option, is federal intervention. Unlike Colorado, the Federal government does possess the power to regulate inter-state commerce. It's possible that a bunch of states-other-than-california could get federal laws passed that would force merchants in any state to collect and disburse funds to satisfy the sales tax statutes in the purchasers' states. That latter option would probably end up leading to bad unintended consequences. I'd rather see the states find ways to replace the lost revenue by abandoning the sales tax and increasing income taxes.
• Tsagadai 15y ago
  No, in-state sales tax is a burden on in-state retailers. Charging an internal tax will affect internal businesses and charging an external tax will affect external businesses. But, charging a tax on inter-state commerce is not allowed by your constitution. If the states are so concerned with the competitiveness of their retailers maybe they should stop taxing them. Personally, I think retailers are just greedy and clinging to an uncompetitive business model while asking for governments to intervene (known as protectionism).