Amazon closes distribution center in Texas

[MechAg94]

Try to explain that to a legislator and you'll get a blank stare.

They will probably ask you what the "gross" sales were and tell you that comparing the tax owed to net profits means nothing.  I guess you also might actually find them in Austin right now too as their "once every other year" legislative session is ongoing. 


I am also curious if that number is for goods shipped out of the Texas warehouse to Texas residents or if it is based on all goods shipped to Texas from anywhere since they have a Texas branch. 

Last: Do you really think that any state with a sales tax is going behave any differently?  The tax could be 1% and they would still want the tax owed.  Hell, New York is suing people over unpaid income taxes if they spent too much time in New York, but don't actually live there.

[MechAg94]

...The same kind of blank stare you'll get as when you ask them, "How much tax revenue will Texas make from all those ex-Amazon employees who are now on 99 weeks of unemployment insurance? "...

As far as income tax, it would be zero anyway as we don't have one. 

[roo_ster]

...The same kind of blank stare you'll get as when you ask them, "How much tax revenue will Texas make from all those ex-Amazon employees who are now on 99 weeks of unemployment insurance? "...

As far as income tax, it would be zero anyway as we don't have one. 

True, but some of those workers will follow Amazon.

Not to mention that some will stay in TX and stay unemployed.

[MechAg94]

I didn't say that won't happen, but I'm not going to cry about it.  I don't want our state govt allowing one company to NOT pay legal taxes while charging all the other companies the same tax.  Now I am right there with you if they were trying to get Amazon to pay taxes for out of state sales, but that I have not seen that mentioned. 

[Perd Hapley]

B&M merchants order in smaller quantities, then have to decorate a pretty storefront because they're living in the same 19th century reality that makattak mentioned earlier.  They chose B&M because they wanted the nostalgia of "Main Street" rather than the economic reality of a combined internet and front door presence.

B&M merchant economic constraints are self-inflicted.  They can shift models any time they want and start selling to people in other States, any time they want to.  They're not compelled to collect sales taxes for non-TX sales when operating out of TX.  I've bought stuff from TX online vendors and not paid TX sales tax.  Instead of entering into the economic shark pool and raising the bar for themselves, they pull chickenscat things like whining about "fairness" and try and tax their competitors harder.  It's economic protectionism, plain and simple.  They could increase their available market to 49 other states, rather than hindering the ability of customers to shop with other vendors.

Reality check:

People still shop at brick & mortar stores. It ain't nostalgia, and when you say it is, you sound like someone who never gets out from behind his keyboard, except to see what the big brown truck just left at his door. Or at the least, you seem to be suggesting that any brick & mortar retailer without an internet store is some kind of Luddite or a poor businessman.

My local hardware store has been in business since before the Civil War, and run by the same family for the last hundred years. Even a Home Depot half-a-block away and upstream of them has not put them out of business. I guess they could start selling online if they wanted to, but not everyone is cut out to do that. They are well-known and loved around here, for excellent face-to-face service and having every part you could think of. Heck, they sell wash-boards. They're not an internet retailer, but not everybody has to be.

[Waitone]

SC thanks the good state of Tejas for giving it your Amazon center.  By the end of the year a new one will be open in Lexington.  1250 full time employees and another 2500 Christmas employees.  A state with 10% unemployment greatly appreciates your generosity.  Tejas thumps the tub about its tax friendly laws.  Ya'll might want to reconsider.  It was taxes (and land and unemployed people) that sent Amazon on the road.

http://www.wistv.com/Global/story.asp?S=13632929

[MechAg94]

County officials and some of the state's top governmental leaders met in Lexington Tuesday evening to approve incentives that included tax breaks and donating 90 acres of land near Interstates 77 and 26.

So, tax breaks and cheap labor? 

If they want to move, that is their problem.  We can't make special deals for everyone who threatens to leave.  If you were expecting us to cry over this, you are mistaken.

[Brad Johnson]

It was taxes (and land and unemployed people) that sent Amazon on the road.

Nope.  It was Amazon's blatant disregard for state sales tax regs that were in place long before Amazon even existed that is the root cause.  If you're going to point fingers, be sure to point them in the right direction.

Brad

[roo_ster]

http://washingtonexaminer.com/blogs/beltway-confidential/2011/02/rick-perry-amazon-decision-wasnt-right-one

"Gov. Rick Perry, R-Texas, told The Examiner in an exclusive interview that Amazon's decision to leave the state was a result of a wrong decision by the state comptroller, and that he will work with legislators to make sure Amazon can stay."

[Boomhauer]

Reality check:

People still shop at brick & mortar stores. It ain't nostalgia, and when you say it is, you sound like someone who never gets out from behind his keyboard, except to see what the big brown truck just left at his door. Or at the least, you seem to be suggesting that any brick & mortar retailer without an internet store is some kind of Luddite or a poor businessman.

My local hardware store has been in business since before the Civil War, and run by the same family for the last hundred years. Even a Home Depot half-a-block away and upstream of them has not put them out of business. I guess they could start selling online if they wanted to, but not everyone is cut out to do that. They are well-known and loved around here, for excellent face-to-face service and having every part you could think of. Heck, they sell wash-boards. They're not an internet retailer, but not everybody has to be.

You see, in my town, if you actually want to get something, you pretty much must order it off the internet (and before that, by phone or mail). Simply because the stores, both B&M family owned stores and the big box stores often don't even have basic stuff (the Wal-Mart in town? Back when I worked for them, we had over 4000 items across the store out of stock). Case in point...you can't even find a nalgene type water bottle in town, nor decent base layers for clothing. I can't tell you the number of times I've ran all over town, searching all of our stores for various basic items, and NOBODY has what I need.

Probably the only store that's really stocked decently is Autozone.

[Perd Hapley]

I'm definitely not denying that web-based stores are taking a lot the market share, and there's a lot of things I can't find locally either. I'm just pointing out that brick and mortar is still a highly viable business model, and a regular part of life for lots of people (I would guess most people, even aside from grocery stores and restaurants). After all, a lot of people have never ordered a blessed thing from the web, and may not even have a computer mo-sheen. I also know that half the stores I go to don't even have a web site.

Also, in my line of work I spend a lot of time at Home Depot and the local hardware store I mentioned. They don't seem to have any shortage of traffic, and when my co-workers or contractors working for us are in need of item x, we usually say, "I'll have to go to Home Depot," not, "I'm gonna go log on." Maybe hardware is an exception to the rule, I don't know.

I will add the disclaimer that my wife is that one person still driving to Blockbuster for movies. So maybe we're just way behind the curve.

[Scout26]

As someone who worked in Logistics, those warehouses and associated activities pay all kinds of taxes.

Anyone want to guess what the property taxes are for a decent sized warehouse run ?  (There's your infrastructure taxes)

What about all the fuel taxes that the trucking and overnight freight companies pay ?  (Goes for roads)

Not sure what additional taxes Texas slams Trucking/freight companies with, but even if it just licences, they are putting into the tax coffers.  

Then there's the payroll taxes, no Texas doesn't have an income tax, but the people that work there have to buy groceries, housing and all the stuff that goes into a house.  There's generally some sales taxes on those things.

And that's just some I can think of off the top of my head.   So no, Amazon isn't getting a "free ride", when it comes to paying taxes, they're just not paying sales taxes, and any group that has "fair" or "fairness" as part of their name isn't interested in "fair", only in screwing over the other guy.  

[KD5NRH]

Case in point...you can't even find a nalgene type water bottle in town, nor decent base layers for clothing.

Oddly, we have at least three "sporting goods" stores in town.  Unfortunately, that means two t-shirt shops that do uniforms, and one Hibbett, which is just an overpriced t-shirt shop that also carries some balls and a few shoes.  Need a spoke or a 700C tube with a Schrader valve?  30 miles, and another 35 t he next shop if the close one's sold out.  (WalMart has 700C tubes with Presta valves, but no Presta pumps, gauges or adapters.)

[MechAg94]

My only issue with online shopping is you pretty much need to have a good idea of what you are looking for already or failing that, a very very good description of the product.  Depending on the type of product, it helps a lot to put your hands on one locally before buying online.

[Boomhauer]

Oddly, we have at least three "sporting goods" stores in town.  Unfortunately, that means two t-shirt shops that do uniforms, and one Hibbett, which is just an overpriced t-shirt shop that also carries some balls and a few shoes

  Dude, are you sure we don't live in the same crappy town? Got two "sporting goods" stores like that and one Hibbett Sports in the mall. All are sad. And their is a really crappy bike/skateboard shop, but that's the only place to by a bicycle or bicycle related stuff besides K-mart and Wal-Mart (and I don't even count our K-mart because we have to have the shittiest little K-mart there ever was, it's sad by even my town's "standards").

Every store, every restaurant, every shop that comes to town is usually OK at first, maybe even great, but within a month it's as crappy as every other place in town.

[Monkeyleg]

My only issue with online shopping is you pretty much need to have a good idea of what you are looking for already or failing that, a very very good description of the product.  Depending on the type of product, it helps a lot to put your hands on one locally before buying online.

Or you could just be one of those people who order something without researching it, then demand a full refund because they don't like it, and refuse to pay any restocking fees.

[KD5NRH]

Dude, are you sure we don't live in the same crappy town? Got two "sporting goods" stores like that and one Hibbett Sports in the mall. All are sad. And their is a really crappy bike/skateboard shop, but that's the only place to by a bicycle or bicycle related stuff besides K-mart and Wal-Mart (and I don't even count our K-mart because we have to have the shittiest little K-mart there ever was, it's sad by even my town's "standards").

Our K-Mart was the first casualty of the WalMart StuporCenter.  Most people probably don't even remember that we ever had one.  The bike shop held on for a while, but it's been gone for years too.  Ace Hardware occasionally has some bike parts, but it's an afterthought, so you occasionally get lucky, but usually not.

[AmbulanceDriver]

From what I'm reading, it's not that Amazon isn't paying sales tax.  Rather, it's that they're not collecting the sales tax for the state and then forwarding it on to the state.  I'm guessing Texas (like most other states) has some law on the books saying that if you buy an item online, you still need to report that purchase and pay the sales tax.  

So instead of going after all the people not paying sales tax, the state is saying, "no, we want you to act as our collections agent to get the taxes."

[Balog]

From what I'm reading, it's not that Amazon isn't paying sales tax.  Rather, it's that they're not collecting the sales tax for the state and then forwarding it on to the state.  I'm guessing Texas (like most other states) has some law on the books saying that if you buy an item online, you still need to report that purchase and pay the sales tax.  

So instead of going after all the people not paying sales tax, the state is saying, "no, we want you to act as our collections agent to get the taxes."

Pretty much this.

As for how to collect the legitimate taxes... I think that income tax has been pretty well established by now, doesn't result in fed.gov trying to get their regulatory fingers into the internet any more, and is one of the better options available at this time that are politically viable, to be honest. Make it flat instead of "progressive" and I think you could both reduce the tax burden and strictly limit .gov spending to what they take in. Yeah right...

[MechAg94]

From what I'm reading, it's not that Amazon isn't paying sales tax.  Rather, it's that they're not collecting the sales tax for the state and then forwarding it on to the state.  I'm guessing Texas (like most other states) has some law on the books saying that if you buy an item online, you still need to report that purchase and pay the sales tax.  

So instead of going after all the people not paying sales tax, the state is saying, "no, we want you to act as our collections agent to get the taxes."

Are you referring to sales to people in Texas from that center or sales to anyone outside the state?  Intrastate sales taxes are collected by everyone else so I can't see why Amazon would be any different.  The state has and will shut businesses down for not collecting and paying sales tax.  On the other side, I could see some misunderstanding develop if some regulator was wanting them to report out of state sales to Texas residents, but I didn't see anything mentioning specifics so I don't know.

[Brad Johnson]

Pretty much this.

As for how to collect the legitimate taxes... I think that income tax has been pretty well established by now, doesn't result in fed.gov trying to get their regulatory fingers into the internet any more, and is one of the better options available at this time that are politically viable, to be honest. Make it flat instead of "progressive" and I think you could both reduce the tax burden and strictly limit .gov spending to what they take in. Yeah right...

It's not an INCOME tax.  It's a SALES tax of 6.25%, flat, on any non-commodity item.

Brad

[MechAg94]

Doesn't Texas have a corporate income tax?  I was thinking we did, but I have no idea what it is.

[Brad Johnson]

They do if you are incorporated in Texas.

Brad

[Balog]

It's not an INCOME tax.  It's a SALES tax of 6.25%, flat, on any non-commodity item.

Brad

Yeah I know, I was addressing Chris' point about taxes being needed and people whining about all forms of taxation. Thread drift: at APS it's a feature not a bug.

[just Warren]

Getting back to the BMs versus the internet stores:

Here's a study that shows people are willing to pay up to 50% more for things they can touch.

Reading it shows that they only used low-priced goods, I doubt this would hold up for something that costs 100's of dollars or more. I mean I'm not going to pay 30k for a 20k car just because I can fondle it before purchase.