Remember all the hoopla about Amazon and sales tax?

[just Warren]

That local retailers were pushing states to make Amazon charge sales tax as a way to level the playing field?

Well guess what, Amazon is going to start opening many more distribution centers and start offering same day delivery. 

This article is saying that it will destroy local retailers. It won't even kill most of them, but it will make it a lot harder and the weaker ones will fail. So they poked the bear and the bear has.... altered the terms of the deal.

As a hardcore unapologetic free-market capitalist I'm all for this of course. Lefties being lefties only focus on the jobs and the poor, poor workers instead of looking at it as a huge boon to consumers which by removing a lot of hassle from shopping actually increases the general standard of living. 

If they start offering produce delivery I might never step in a supermarket again.

[MechAg94]

Do state's have the power to levy taxes for in-state sales or not?  That seems to be the real question.  How far can Amazon stretch this internet sales exemption?

[drewtam]

Do state's have the power to levy taxes for in-state sales or not?  That seems to be the real question.  How far can Amazon stretch this internet sales exemption?

What makes a transaction an in-state sale?
--Where the product and buyer are?
--Where the seller and buyer are?
--Where is Amazon?
---Corporate headquarters?
---Distribution center?
---Data server physical location?

[geronimotwo]

if they have a distrubution center in your state you will need to pay sales tax (if your state has it).

 as far as increasing the general standard of living......try buying something when you don't have a job.  the same line has been used for outsourcing production to asia.  i don't buy it.

[MillCreek]

Since they are headquartered in this state, I have always had to pay Washington state sales tax on all my Amazon purchases. Last time I checked, bricks and mortal retail was still alive here.  I already have free two day delivery via Prime; it will be interesting to see if I can get same or next day delivery for free or low cost.

[Waitone]

f they have a distrubution center in your state you will need to pay sales tax (if your state has it).

Unless your state gave Amazon a tax abatement in exchange for putting in distribution centers and hiring thousands of employees (c.f. South Carolina and its one operating center and two under construction).

If tax abatement is a good idea for an internet company, it is a good idea for a brick and mortar operation.  I get sick and tired of idiot politicians picking and choosing winning companies.

[MrsSmith]

Lefties being lefties only focus on the jobs and the poor, poor workers instead of looking at it as a huge boon to consumers which by removing a lot of hassle from shopping actually increases the general standard of living. 

If they start offering produce delivery I might never step in a supermarket again.

If lefties actually lived in some of the communities where Amazon has locations, they'd be aware that Amazon hires huge numbers of folks seasonally and if you have half a brain in your head, you can stay on with the company at season's end, move up rapidly with frequent raises and bonuses, and is by all accounts I've ever heard, just a hell of a good company to work for.

[roo_ster]

In Warren's vein, if Amazon starts to offer common everyday grocery & wal-mart-sih goods at competitive prices (that include shipping) I will spend even less time driving around trying to get them locally.

[SADShooter]

In Warren's vein, if Amazon starts to offer common everyday grocery & wal-mart-sih goods at competitive prices (that include shipping) I will spend even less time driving around trying to get them locally.

I deal with Amazon for convenience, free shipping and to avoid sales tax, realizing their prices aren't always best. If tax becomes an issue, I will simply rejigger my comparison shopping, and buy less to compensate.

[slingshot]

There is a limit to how many distribution centers they can profitably operate.

The only reason I buy from Amazon is convenience or for products I can't find locally without a lot of effort.

Amazon gets an exemption from collecting in-state sales taxes where they have distribution centers.  This is going to change.  Then business will change a lot.  Eventually Amazon will run out of states they can re-locate to to avoid charging sales taxes.  Things catch up with you.

[TechMan]

There is a limit to how many distribution centers they can profitably operate.

The only reason I buy from Amazon is convenience or for products I can't find locally without a lot of effort.

Amazon gets an exemption from collecting in-state sales taxes where they have distribution centers.  This is going to change.  Then business will change a lot.  Eventually Amazon will run out of states they can re-locate to to avoid charging sales taxes.  Things catch up with you.

As it stands not that is not true.  I live in Ohio (Cincinnati) and work in Northern Kentucky.  If I have Amazon ship something to my home address, I don't pay sales tax.  If I have Amazon ship something to my work address, I do have to pay sales tax as one of their largest distribution centers is located in Kentucky.

[MechAg94]

What makes a transaction an in-state sale?
--Where the product and buyer are?
--Where the seller and buyer are?
--Where is Amazon?
---Corporate headquarters?
---Distribution center?
---Data server physical location?

IMO, you are just fishing for loopholes so they can keep bypassing sales taxes.  If they are going to set up lots of distribution centers and compete more directly with local retailers, don't you think they should lose that loophole and compete on an even playing field?  Part of the Free Market Economics you mentioned before is having a level playing field with no competitor being given preference. 

I already pay sales tax for any internet purchase from a Texas company.  I would expect to pay that to Amazon also if they move back in state.

[cordex]

IMO, you are just fishing for loopholes so they can keep bypassing sales taxes.  If they are going to set up lots of distribution centers and compete more directly with local retailers, don't you think they should lose that loophole and compete on an even playing field?

I think that's the point.  They are expecting to lose that advantage and make up for it in ultrafast, affordable shipping and product selection that local shops have a hard time beating.

[geronimotwo]

i can't even imagine the inventory necessary to make this happen.  it's one thing to take orders and drop-ship from around the planet, but to have everything in stock within 24 hour shipping of everyone is mind boggling.

[never_retreat]

Amazon gets out of collecting sales taxes in some of the states they have physical structures in because of deals passed by the states and Amazon.
Amazon says we want to build a billion sq foot distribution center in you state a create 10,000 jobs. States agree to letting the tax thing slide.

[De Selby]

Amazon gets out of collecting sales taxes in some of the states they have physical structures in because of deals passed by the states and Amazon.
Amazon says we want to build a billion sq foot distribution center in you state a create 10,000 jobs. States agree to letting the tax thing slide.

It is a lot more complicated than that.

States believe they can tax their residents for all purchases, even those of items that come from outside the state.  They want to force online retailers to withhold that tax every time someone from their state places an order, no matter where the order comes from.

Whether that tax is even in theory constitutional Im not sure.  It's definitely unreasonable, and I have no sympathy for the states in attempting to ruin online commerce for their own financial gain.

[drewtam]

IMO, you are just fishing for loopholes so they can keep bypassing sales taxes.  If they are going to set up lots of distribution centers and compete more directly with local retailers, don't you think they should lose that loophole and compete on an even playing field?  Part of the Free Market Economics you mentioned before is having a level playing field with no competitor being given preference. 

I already pay sales tax for any internet purchase from a Texas company.  I would expect to pay that to Amazon also if they move back in state.

No, you're wrong. I am trying to point out that nailing down what is an "in-state transaction" is not cut and dry. If we base it on distribution center location, then it will create a game of buying items online one state over.

An example based on distribution center...
I'm in Peoria, IL. I will buy from Amazon shell company (OR COMPETITOR) Amazing Iowa to get the 10% sales tax discount, shipped from the distribution center in the quad-cities.
Folks in the quad-cities can buy from Amazon shell company (or competitor) Amazonian Illinois to get their state sales tax discount, shipped from the Peoria distribution center.

Nailing down an "in-state" transaction is going to be a sticky point.

[MechAg94]

No, you're wrong. I am trying to point out that nailing down what is an "in-state transaction" is not cut and dry. If we base it on distribution center location, then it will create a game of buying items online one state over.

An example based on distribution center...
I'm in Peoria, IL. I will buy from Amazon shell company (OR COMPETITOR) Amazing Iowa to get the 10% sales tax discount, shipped from the distribution center in the quad-cities.
Folks in the quad-cities can buy from Amazon shell company (or competitor) Amazonian Illinois to get their state sales tax discount, shipped from the Peoria distribution center.

Nailing down an "in-state" transaction is going to be a sticky point.

On the first part, that is pretty much what we have now.  If a company has offices/infrastructure in a state, they get pressured to charge sales tax for stuff sold in that state.  The grey area is large companies who have infrastructure across multiple states.  The only reason this is an issue is because the Feds said out of state internet sales are exempt from state sales tax.  IMO, Amazon and others are fishing for grey areas and loopholes so they can maintain that status while they continue to grow.  I would do so in their shoes also.  I think it is unlikely they will be able to execute this plan and maintain that tax advantage.

Lastly, even if Amazon did charge me sales tax, I would likely still order stuff from them like I do now.  Their prices are generally good and they usually have good service.

[BryanP]

Lastly, even if Amazon did charge me sales tax, I would likely still order stuff from them like I do now.  Their prices are generally good and they usually have good service.

Yep.  Which is good because we already have distribution centers here in TN and are on schedule to begin collecting sales tax in 2014.

[De Selby]

The only reason this is an issue is because the Feds said out of state internet sales are exempt from state sales tax.  

The Feds have said no such thing - what they have said is that states can't target Internet sales.  They have to be taxed the same as any other sale.

IMO, Amazon and others are fishing for grey areas and loopholes so they can maintain that status while they continue to grow.  I would do so in their shoes also.  I think it is unlikely they will be able to execute this plan....

IMO, they are for whatever purpose upholding one of the most obvious goals of the commerce clause - to stop the states from getting into trade wars with each other.  

The idea that California shouldn't be able to tax sales from NY to a California resident by forcing the NY seller to collect and file a tax in CA is basic constutuional law.  I don't see Amazon as looking for loopholes so much as trying to avoid having 50 different states requiring tax collection for business that's done in all the other 50 states, which would be a regulatory nightmare.  

It would also invite precisely the sort of trade warring the constitution was written to avoid.

[Waitone]

I don't see Amazon as looking for loopholes so much as trying to avoid having 50 different states requiring tax collection for business that's done in all the other 50 states, which would be a regulatory nightmare.

Which is why this whole mess will be resolved when the several state all agree to one tax rate.  The regulatory burden argument at that point is moot.  Some state will collect less than brick and mortar operations but still more than nothing which is what they collect now.

[slingshot]

I do think Amazon is trying to avoid collecting sales tax from purchases made inside states where Amazon has a physical presence.  It makes them competitive.  This will change.  They don't want a level playing field.

Yep.  Which is good because we already have distribution centers here in TN and are on schedule to begin collecting sales tax in 2014.

Yeah, Amazon negotiated an agreement with the previous Governor of TN and when the current Governor (Haslam) took office, he had to accept or reject the previous deal.  Amazon was building two distribution centers in the Chattanooga area and they litterally stopped work on those and told their contractors they would not pay them if they pulled out of TN.  They sort of said... take us to court and we'll see in a few years how it goes.  In the mean time, these contractors go out of business due to cash flow issues.  The 2014 date is a fairly new arrangement which follows Federal guidelines.

[brimic]

Amazon shouldn't be required to collect taxes, Amazon isn't the IRS or a state revenue agency.
People who order items from other states are supposed to calculate the sales tax for their own state (varies) and claim it on their tax forms.

The fact that people don't pay the taxes is not Amazon's fault.
Any liberals who are hand wringing about a lack of tax collections can feel free to calculate the tax they owe and send it to their state revenue agency.

[slingshot]

People who order items from other states are supposed to calculate the sales tax for their own state (varies) and claim it on their tax forms.

Yeah, right.  You actually believe that people will do that voluntarily?

[De Selby]

Yeah, right.  You actually believe that people will do that voluntarily?

They won't, but that's because it's a ridiculous tax with only the shakiest constitutional foundations.