Amazon takes on Taxafornia

by Hellsangel Tue Jul 12, 2011 2:36 pm

http://www.internetretailer.com/2011/07/12/amazons-sales-tax-counter-attack

by charvaka Tue Jul 12, 2011 3:24 pm

This is another instance of companies trying to buy decisions that are favorable to their bottomlines. California law has always been clear -- you need to pay sales tax on online retail transactions, even if the retailer doesn't collect those taxes. Individual taxpayers were supposed to report them and pay them when the retailer fails to do so. The state recently asked retailers to collect the taxes properly.

The fact is, with more and more transactions moving online, we need to make sure online retailers collect sales tax just like brick-and-mortar retailers did, or we need to find an alternative tax base for the state. In other words, the revenue shortfall for the state would need to be made up in income or property taxes elsewhere. (I prefer that it be made up in income taxes, which are more progressive than the consumption-based sales tax. But it is unlikely that change will happen.)

by Hellsangel Tue Jul 12, 2011 6:11 pm

Whatever Taxafornia is trying is not working:
http://money.cnn.com/2011/06/28/news/economy/California_companies/index.htm?iid=HP_LN&hpt=hp_t2

by charvaka Tue Jul 12, 2011 6:37 pm

California is by no means alone on the "sales tax on online transactions" issue. Most states want to collect those revenues which their residents legally owe anyway, but are not being collected now because of administrative problems.

by charvaka Tue Jul 12, 2011 6:41 pm

There is more to this battle than simple liberal-conservative battle regarding level of taxation. This is two business models (brick-and-mortar retail and online retail) fighting it out, with the latter enjoying a tax advantage that the former is trying to erode. Amazon is trying to retain its tax advantage by lobbying politicians and now underwriting a ballot initiative. For more, see below.

http://www.msnbc.msn.com/id/39159604/ns/business-personal_finance/t/states-working-harder-collect-online-sales-taxes/

States working harder to collect online sales taxes

With budgets in crisis, 'Amazon laws' gather steam across country

Numerous other states are considering legislation or studying proposals that would crack down on non-payment of online taxes:

The Alabama Department of Revenue is sending letters to random taxpayers, telling them to review their last three years of online purchases and send in a check.
In February, Colorado enacted the so-called Amazon law, declaring that online retailers were part of an “economic nexus” with state residents. Under the law — which has been challenged in federal court — Amazon and other online retailers are required to calculate the sales tax on every transaction and tell their customers how much they have to pay the state. They’re also required to disclose the identities of their customers and how much they spent, which has set off a fierce dispute over Coloradans’ privacy rights. Amazon says the law was enacted “over our strong objections.”
Three other states have enacted laws like the Colorado statute since 2008: New York, Rhode Island and North Carolina. And at least a dozen more are considering following their example.

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Amazon takes on Taxafornia

Amazon takes on Taxafornia

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