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"Sounds pretty reasonable on paper..." No, it really doesn't sound reasonable when you look at it on any medium. This is incredibly unreasonable. Even if we a

"Sounds pretty reasonable on paper..." No, it really doesn't sound reasonable when you look at it on any medium. This is incredibly unreasonable. Even if we accept that California should be allowed to force companies to collect tax that operate physically within its border, to attempt to force that status upon unwilling or unknowing companies that aren't anywhere near its jurisdiction is ridiculous. California is not losing money due to this practice. That's like saying a mobster is losing money because he's not collecting "protection money" from people who live a thousand miles outside his territory. And let me also say they should call this a buying tax, not a sales tax. That much is evident based on who the collector is.

gojomo 17y ago
California is losing money. For example, NewEgg (based in California), faces a pricing disadvantage against Amazon in online sales to California residents, because NewEgg has to collect sales tax. At the margin people choose Amazon -- resulting in lost profits/jobs for NewEgg, and lost sales/income tax revenues for the state. In some cases, this also means shipments have to go an inefficiently long-distance, because of an arbitrary legal distinction. (Though, for the bay area, Amazon's Reno distribution center is closer than Southern California.) And that's just comparing online retailers; there's no reason Amazon should have such a tax-based price advantage over the bookstore a block from me, driving the local supplier closer to bankruptcy and making it cheaper for me to have a book shipped hundreds of miles rather than walking a few minutes to pick it up myself. I like low taxes. I like no taxes even better. But taxes that create arbitrary opportunities for gaming/avoidance aren't really in anyone's interest.
- codeodor 17y ago
  "I like low taxes. I like no taxes even better. But taxes that create arbitrary opportunities for gaming/avoidance aren't really in anyone's interest." I don't believe you. Evidence: "California /is/ losing money..." I'm glad you pointed out that NewEgg "has to collect sales tax. At the margin people choose Amazon..." and everything else you said. I'm just disappointed that you didn't see the obvious: California is the problem, not the businesses. They can tax and tax and tax - but they'll continue to be addressing symptoms instead of problems.
  - gojomo 17y ago
    Seattle, home of Amazon, is not a low-sales-tax haven; its sales-tax rate of 9.5% is the same as San Francisco. So this is not a matter of low-tax-jurisdictions winning over high-tax jurisdictions; it's a loophole that exempts a certain kind of transaction, no matter the direction. Do we prefer people buy from distant merchants, so much that we want to punish local sales? Is there a case to be made that this approach optimizes welfare for people, or causes the most economic growth? That case hasn't been made. This is a glitch in the law from when cross-border retail was too small to worry about. But since people have become wealthy from this glitch, it now has a constituency that makes change hard. That sort of entrenched-interest paralysis is not something to celebrate. It's also not a California-specific issue. Even Texas finds Amazon's legal machinations to get out of sales tax fishy: http://news.cnet.com/8301-10784_3-9942692-7.html http://news.cnet.com/8301-10784_3-9942692-7.html And even Texas requires residents to pay 'use tax' on out-of-state purchases: http://www.window.state.tx.us/taxinfo/sales/faq_use.html#use3 http://www.window.state.tx.us/taxinfo/sales/faq_use.html#use... Companies should compete on the merits of their offerings; jurisdictions should compete on what sort of pro-business environment they offer fairly to all businesses, not just loophole-favored segments (like cross-border shippers). Otherwise productive effort is wasted in gaming legislatureslaws/borders rather than innovating and serving customers.
gojomo 17y ago
force that status upon unwilling or unknowing companies that aren't anywhere near its jurisdiction Does Amazon really fall into that category? It has more than one subsidiary based in California, with "an Amazon.com company" on their websites. (A9 and Alexa are two.) It's odd that California even has to resort to the 'affiliates count as operations' trick, until you consider the game-theoretic aspects -- Amazon has a credible threat of withdrawing its subsidiaries to avoid the tax, but perhaps not dismantling its affiliates' program. Really, this needs a national solution -- perhaps a standard sales tax that applies when a sale straddles exactly two states, with the revenue split 50/50 between source and destination. Otherwise distant online retailers like Amazon have an unfair advantage over nearby terrestrial retailers (like my bookstore down the street) or same-state online retailers (like NewEgg).
- codeodor 17y ago
  Does Amazon matter? As I recall, the article talks about taxing anyone who advertises on California-based web sites (servers?). How does one tell? I was under the impression Amazon had warehouses that end up delivering in most states, since I (thought I) pay tax on purchases in my state. The point is, it's not just Amazon. Amazon is a minor part of it. They're talking about causing anyone who advertises on a California website to be a California taxpayer. That's ridiculous. I'm sure I must be considered as one of the top few percent of people who pay attention to news. What happens with advertisers who are less in-tune with intra-state events? What happens with people who buy ads through an ad agency who puts their ads on California websites? What happens to direct buyers who don't know any better? Do you see what I mean now by unwilling and unknowing? And let's forget about the US Constitution. One comment here put it as "clear." It's not quite as clear as saying "the US govt has power to tax interstate commerce," but anyone I've known as a constitutional "scholar" agrees with that: The original constitution- article 1, section 8, says the US Congress has the duty and right: "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; " Then later they mention that "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." Most people forget about that 10th amendment (and the 9th as well!) You see, the power of regulating commerce among the several states was delegated by the Constitution to the United States. It's not up to California. "Really, this needs a national solution..." No, it doesn't. California charges an income AND sales tax. Plenty of states do fine without an income tax. Plenty of states do fine without a sales tax that over-reaches authority. This is absurdity asked by a government who has no apparent concept of reality with the rest of the world.

gojomo 17y ago

California is losing money. For example, NewEgg (based in California), faces a pricing disadvantage against Amazon in online sales to California residents, because NewEgg has to collect sales tax. At the margin people choose Amazon -- resulting in lost profits/jobs for NewEgg, and lost sales/income tax revenues for the state. In some cases, this also means shipments have to go an inefficiently long-distance, because of an arbitrary legal distinction. (Though, for the bay area, Amazon's Reno distribution center is closer than Southern California.) And that's just comparing online retailers; there's no reason Amazon should have such a tax-based price advantage over the bookstore a block from me, driving the local supplier closer to bankruptcy and making it cheaper for me to have a book shipped hundreds of miles rather than walking a few minutes to pick it up myself. I like low taxes. I like no taxes even better. But taxes that create arbitrary opportunities for gaming/avoidance aren't really in anyone's interest.

codeodor 17y ago
"I like low taxes. I like no taxes even better. But taxes that create arbitrary opportunities for gaming/avoidance aren't really in anyone's interest." I don't believe you. Evidence: "California /is/ losing money..." I'm glad you pointed out that NewEgg "has to collect sales tax. At the margin people choose Amazon..." and everything else you said. I'm just disappointed that you didn't see the obvious: California is the problem, not the businesses. They can tax and tax and tax - but they'll continue to be addressing symptoms instead of problems.
- gojomo 17y ago
  Seattle, home of Amazon, is not a low-sales-tax haven; its sales-tax rate of 9.5% is the same as San Francisco. So this is not a matter of low-tax-jurisdictions winning over high-tax jurisdictions; it's a loophole that exempts a certain kind of transaction, no matter the direction. Do we prefer people buy from distant merchants, so much that we want to punish local sales? Is there a case to be made that this approach optimizes welfare for people, or causes the most economic growth? That case hasn't been made. This is a glitch in the law from when cross-border retail was too small to worry about. But since people have become wealthy from this glitch, it now has a constituency that makes change hard. That sort of entrenched-interest paralysis is not something to celebrate. It's also not a California-specific issue. Even Texas finds Amazon's legal machinations to get out of sales tax fishy: http://news.cnet.com/8301-10784_3-9942692-7.html http://news.cnet.com/8301-10784_3-9942692-7.html And even Texas requires residents to pay 'use tax' on out-of-state purchases: http://www.window.state.tx.us/taxinfo/sales/faq_use.html#use3 http://www.window.state.tx.us/taxinfo/sales/faq_use.html#use... Companies should compete on the merits of their offerings; jurisdictions should compete on what sort of pro-business environment they offer fairly to all businesses, not just loophole-favored segments (like cross-border shippers). Otherwise productive effort is wasted in gaming legislatureslaws/borders rather than innovating and serving customers.

gojomo 17y ago

force that status upon unwilling or unknowing companies that aren't anywhere near its jurisdiction Does Amazon really fall into that category? It has more than one subsidiary based in California, with "an Amazon.com company" on their websites. (A9 and Alexa are two.) It's odd that California even has to resort to the 'affiliates count as operations' trick, until you consider the game-theoretic aspects -- Amazon has a credible threat of withdrawing its subsidiaries to avoid the tax, but perhaps not dismantling its affiliates' program. Really, this needs a national solution -- perhaps a standard sales tax that applies when a sale straddles exactly two states, with the revenue split 50/50 between source and destination. Otherwise distant online retailers like Amazon have an unfair advantage over nearby terrestrial retailers (like my bookstore down the street) or same-state online retailers (like NewEgg).

codeodor 17y ago
Does Amazon matter? As I recall, the article talks about taxing anyone who advertises on California-based web sites (servers?). How does one tell? I was under the impression Amazon had warehouses that end up delivering in most states, since I (thought I) pay tax on purchases in my state. The point is, it's not just Amazon. Amazon is a minor part of it. They're talking about causing anyone who advertises on a California website to be a California taxpayer. That's ridiculous. I'm sure I must be considered as one of the top few percent of people who pay attention to news. What happens with advertisers who are less in-tune with intra-state events? What happens with people who buy ads through an ad agency who puts their ads on California websites? What happens to direct buyers who don't know any better? Do you see what I mean now by unwilling and unknowing? And let's forget about the US Constitution. One comment here put it as "clear." It's not quite as clear as saying "the US govt has power to tax interstate commerce," but anyone I've known as a constitutional "scholar" agrees with that: The original constitution- article 1, section 8, says the US Congress has the duty and right: "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; " Then later they mention that "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." Most people forget about that 10th amendment (and the 9th as well!) You see, the power of regulating commerce among the several states was delegated by the Constitution to the United States. It's not up to California. "Really, this needs a national solution..." No, it doesn't. California charges an income AND sales tax. Plenty of states do fine without an income tax. Plenty of states do fine without a sales tax that over-reaches authority. This is absurdity asked by a government who has no apparent concept of reality with the rest of the world.