Amazon Pressured on Sales Tax

I'm the only "right winger" who posted before you, and I didn't even say I was against it.

I only said that the argument against it -- which I had never hear before or considered -- made some sense.

As the article and Boom point out, the tax is still due, it's just that no one pays it.

The question is should Amazon be forced to play tax collector for states where they don't have a physical presence.

It's a fair question since, historically, mail order catalogs have not had to collect sales tax.

I'm actually ok with it in general. It would create an even playing field. As others pointed out though, it would/should be applied to everyone, not just Amazon. (And, the small businesses will howl and end up not having it applied to them, which will be unfair. But, it would also be very hard for small businesses to collect and pay sales tax to all 50 states.)

And, personally, I can't remember the last time I bought anything from Amazon. I bought my new TV from Best Buy.

 

One key variable is shipping.

Oftentimes shipping costs are as much as whatever a sales tax would be, which makes it a wash for the consumer.

Free shipping tilts the balance in a favor of the online customer. But if companies are willing to pay those shipping costs, then that's just part of doing what's necessary in a competitive economy.

I just got free shipping (and no sales tax) on a $300 weaving loom.

I also just paid $21 shipping on a $29 purchase from overseas.

Overall, I paid pretty much the same as I would have paid to purchase those items locally (which I could not, BTW). The online advantage to me breaks down this way: 95% selection, 4% convenience, 1% tax savings.

 

But technically you still owe the tax to your state.

Because record keeping is so complex I make all my big purchases in state and use Amazon as negotiating ploy.

I am usually successful in getting local store to hack another 5%- 6% off my purchase to negate Amazon tax advantage.

To me it would make sense for State to require collection of tax on just big purchases - say $500 or more. Otherwise the record keeping would be onerous to small businesses.

 

That sounds about right to me too. If you're selling expensive items like that, you have to collect the taxes.

But, it saves home businesses selling scented candles or home made jam online from having to file paperwork with all 50 states.

 

The state of California is coming at the use tax HARD this year. Its been on the books, they point out, since 1939. But businesses now need to complete a tax return by April 15 stating their use tax obligations.

 

Been done for a while in CT. A small business purchases 10 lap tops for their employees from Amazon-- it better show up on use tax from.

 

[/quote]

This is patently untrue. If you are selling products in a state, thus delivering products in said state, then you are benefiting from the infrastructure that allows you to logistically get the job done. You very much benefit from the taxes you would pay.

 

Boom is correct in the technical sense, but it's a useless fact because nobody actually reports out-of-state purchases. I'd be shocked if 0.1 percent of Amazon customers even know that they're technically required to report such purchases. The state law requiring reporting Amazon purchases is meaningless as long as compliance is ostensibly zero.

 

Turbo Tax asks the question... I am going to guess a helluva lot more people than a tenth of a percent use turbo tax.

Ignorance is not a defense. States are looking for every last dime these days.

 

When people were doing mail-order 20 years ago, were people paying sales tax then?

 

Interestingly enough Wal-Mart has gotten into the act and its lobbying army is pressuring to make Amazon pay sales tax.

Said it is an unfair advantage for online retailers. And Wal-Mart always gets its way.