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Amazon to collect Conn. sales tax, ending dispute

13 points by iProject 14y ago

jpdoctor 14y ago
With amazon ceding to demands on collecting state sales taxes for interstate commerce, they have opened the door to a competitor.
- nitid_name 14y ago
  The problem is that states aren't seeing the sales tax revenue from out of state purchases and have become increasingly insistent that they receive said revenue. They've tried collecting it on income taxes (who really files that anyway?) but it doesn't work. Facing increased budget pressure, the states aren't likely to give up. More than likely, any competitor who isn't at least Amazon-sized (and let's be serious, other than maybe Walmart, who is?) is going to get leaned on hard by the state's legal department if the competitor doesn't roll over on the Amazon tax. I don't foresee any competition taking over Amazon's market share over a 6.5% sales tax.
  - jpdoctor 14y ago
    > The problem is that states aren't seeing the sales tax revenue from out of state purchases and have become increasingly insistent that they receive said revenue. That's not a problem: It's a use-case covered explicitly by the US constitution. The real problem is that the states have been slow to change and adapt to a world where interstate commerce is edging out intrastate commerce. Trying to overrule the constitution is just waiting for someone with deep pockets to make a federal case out of it. Already amazon is losing biz on electronics to the folks that aren't collecting.
    - gamblor956 14y ago
      Trying to overrule the constitution is just waiting for someone with deep pockets to make a federal case out of it. Already happened, in the famous Quill case. Consequently, is permissible to impose a sales tax on out-of-state retailers if they have a "substantial nexus" with the taxing state.
  - Osiris 14y ago
    Colorado passed a law that tried to require internet retailers to provide the state with a summary of purchases made by CO residents so that those residents would be required to paid sales tax. The law was stricken down and again on appeal as a violation of the Commerce clause of the U.S. Constitution.
  - meh01 14y ago
    Companies do in fact file use tax (in CA). Why open yourself up to FTB action for ~8% on your Amazon purchases?
niggler 14y ago
If this trend continues, ultimately all 50 states will be collecting sales tax from Amazon. In that case, what is amazon's edge going forward, especially if the retails stores can come close on price while offering immediate gratification?
- dman 14y ago
  a) The warehouses are in lower cost areas as compared to showrooms. b) Warehouses allow amazon to serve the profitable long tail of products because they are not limited to shelf space. c) If they start offering same day service, the advantage of immediate purchase from retail stores will me largely mitigated. d) I largely dont want to shop in a store anymore because amazon has the discovery problem solved to a much better extent than stores do. I feel very helpless now when I am in a retail store and struggle to answer the question - 'which one of these products is any good'. Retailers could maybe counter that with shopping companion applications but I dont know of any good ones.
  - joezydeco 14y ago
    It's not just same-day service that's compelling, it's same-day service with delivery. If I can order something from my desk at work in the AM and have it in-hand before I drive home, that blows away any brick-and-mortar store by a long shot.
    - toomuchtodo 14y ago
      Or its waiting on my front stoop when I get home. That saves me half an hour, and I'll cough up $10-20 for that privilege.
      - joezydeco 14y ago
        That's what the lockers are for! =)
        toomuchtodo 14y ago
chaz 14y ago
> Amazon also promised to spend $50 million to build a facility at an unspecified site and create hundreds of jobs. With their tax advantage disappearing, Farhad Manjoo's comment about Amazon's strategy to open same-day delivery centers in these settled states comes to mind. http://www.slate.com/articles/business/small_business/2012/07/amazon_same_day_delivery_how_the_e_commerce_giant_will_destroy_local_retail_.html http://www.slate.com/articles/business/small_business/2012/0...
mercuryrising 14y ago
I don't think Amazon's 'edge' is sales tax, I think it's a wide variety of goods, and me buying things on my couch. Because of tax, time, and gas, it's more expensive to drive to a store 20 minutes away, get 'hassled' by employees, and purchase something (with sales tax) than it is for me to roll out of bed, type in 'Amazon', find the thing I want, add it to my cart, login with my password, and buy it. I get to track it too, like a predatory animal waiting for my prey to arrive in the mail. Amazon has hit a convenience point that no one else can touch. They bought 'Small Parts', now I can do almost all my Home Depot shopping on Amazon too (although my purchases at Home Depot are almost always ones that can't wait for shipping). The tax will be a small bump in the road that people try to make a huge deal out of, but it's the convenience they'll follow.
- greenyoda 14y ago
  Very true. And it's even worse to drive to a store 20 minutes away and not find what you're looking for (either the store doesn't carry it, or it's out of stock, or nobody can tell you what aisle it's in). My usage of Amazon didn't decrease at all when they started charging sales tax in my state.
- deleted 14y ago
  [deleted]
- lh7777 14y ago
  As a Seattle resident paying 9.5% sales tax on Amazon stuff, I agree with this. Just can't beat that convenience.
muzz 14y ago
Interesting that no one is calling this an "Amazon tax", as was done when California did the same thing

13 points by iProject 14y ago

With amazon ceding to demands on collecting state sales taxes for interstate commerce, they have opened the door to a competitor.

nitid_name 14y ago
The problem is that states aren't seeing the sales tax revenue from out of state purchases and have become increasingly insistent that they receive said revenue. They've tried collecting it on income taxes (who really files that anyway?) but it doesn't work. Facing increased budget pressure, the states aren't likely to give up. More than likely, any competitor who isn't at least Amazon-sized (and let's be serious, other than maybe Walmart, who is?) is going to get leaned on hard by the state's legal department if the competitor doesn't roll over on the Amazon tax. I don't foresee any competition taking over Amazon's market share over a 6.5% sales tax.
- jpdoctor 14y ago
  > The problem is that states aren't seeing the sales tax revenue from out of state purchases and have become increasingly insistent that they receive said revenue. That's not a problem: It's a use-case covered explicitly by the US constitution. The real problem is that the states have been slow to change and adapt to a world where interstate commerce is edging out intrastate commerce. Trying to overrule the constitution is just waiting for someone with deep pockets to make a federal case out of it. Already amazon is losing biz on electronics to the folks that aren't collecting.
  - gamblor956 14y ago
    Trying to overrule the constitution is just waiting for someone with deep pockets to make a federal case out of it. Already happened, in the famous Quill case. Consequently, is permissible to impose a sales tax on out-of-state retailers if they have a "substantial nexus" with the taxing state.
- Osiris 14y ago
  Colorado passed a law that tried to require internet retailers to provide the state with a summary of purchases made by CO residents so that those residents would be required to paid sales tax. The law was stricken down and again on appeal as a violation of the Commerce clause of the U.S. Constitution.
- meh01 14y ago
  Companies do in fact file use tax (in CA). Why open yourself up to FTB action for ~8% on your Amazon purchases?

niggler 14y ago

If this trend continues, ultimately all 50 states will be collecting sales tax from Amazon. In that case, what is amazon's edge going forward, especially if the retails stores can come close on price while offering immediate gratification?

dman 14y ago
a) The warehouses are in lower cost areas as compared to showrooms. b) Warehouses allow amazon to serve the profitable long tail of products because they are not limited to shelf space. c) If they start offering same day service, the advantage of immediate purchase from retail stores will me largely mitigated. d) I largely dont want to shop in a store anymore because amazon has the discovery problem solved to a much better extent than stores do. I feel very helpless now when I am in a retail store and struggle to answer the question - 'which one of these products is any good'. Retailers could maybe counter that with shopping companion applications but I dont know of any good ones.
- joezydeco 14y ago
  It's not just same-day service that's compelling, it's same-day service with delivery. If I can order something from my desk at work in the AM and have it in-hand before I drive home, that blows away any brick-and-mortar store by a long shot.
  - toomuchtodo 14y ago
    Or its waiting on my front stoop when I get home. That saves me half an hour, and I'll cough up $10-20 for that privilege.
    - joezydeco 14y ago
      That's what the lockers are for! =)
      - toomuchtodo 14y ago

chaz 14y ago

> Amazon also promised to spend $50 million to build a facility at an unspecified site and create hundreds of jobs. With their tax advantage disappearing, Farhad Manjoo's comment about Amazon's strategy to open same-day delivery centers in these settled states comes to mind. http://www.slate.com/articles/business/small_business/2012/07/amazon_same_day_delivery_how_the_e_commerce_giant_will_destroy_local_retail_.html http://www.slate.com/articles/business/small_business/2012/0...

mercuryrising 14y ago

I don't think Amazon's 'edge' is sales tax, I think it's a wide variety of goods, and me buying things on my couch. Because of tax, time, and gas, it's more expensive to drive to a store 20 minutes away, get 'hassled' by employees, and purchase something (with sales tax) than it is for me to roll out of bed, type in 'Amazon', find the thing I want, add it to my cart, login with my password, and buy it. I get to track it too, like a predatory animal waiting for my prey to arrive in the mail. Amazon has hit a convenience point that no one else can touch. They bought 'Small Parts', now I can do almost all my Home Depot shopping on Amazon too (although my purchases at Home Depot are almost always ones that can't wait for shipping). The tax will be a small bump in the road that people try to make a huge deal out of, but it's the convenience they'll follow.

greenyoda 14y ago
Very true. And it's even worse to drive to a store 20 minutes away and not find what you're looking for (either the store doesn't carry it, or it's out of stock, or nobody can tell you what aisle it's in). My usage of Amazon didn't decrease at all when they started charging sales tax in my state.
deleted 14y ago
[deleted]
lh7777 14y ago
As a Seattle resident paying 9.5% sales tax on Amazon stuff, I agree with this. Just can't beat that convenience.

muzz 14y ago

Interesting that no one is calling this an "Amazon tax", as was done when California did the same thing