California!! It's Another Country!!

[Haggis@wk]

It woudl be fair to mention that at least 5 other states already have such laws on the books. Fact is...most people buying off of the internet get a free ride on state sales taxes. Brick and mortar stores don't.

Which is why internet shopping is so popular. California still won't get any taxes but it forced a number of affliates to (according to the comments) to leave the state. People will still buy, tax free, from Amazon but the state of California will lose some more productive citizens.

[jamiebk]

It woudl be fair to mention that at least 5 other states already have such laws on the books. Fact is...most people buying off of the internet get a free ride on state sales taxes. Brick and mortar stores don't.

Which is why internet shopping is so popular. California still won't get any taxes but it forced a number of affliates to (according to the comments) to leave the state. People will still buy, tax free, from Amazon but the state of California will lose some more productive citizens.

All states should adopt the tax charge. It is not equitable to small businsses located in the states. I would think you would be more sensitive to that fact. Small buinesses face an unfair competitive environment since on-line purchases are not taxed equally or even consistently in the states.

[Giant Communist Robot]

All states should adopt the tax charge.

...or they all should drop the tax. Even better for small business. And we all benefit. But the tax is not about helping people, but improving state's fiscal problems caused by the same jackasses that want to tax more.

[jamiebk]

All states should adopt the tax charge.

...or they all should drop the tax. Even better for small business. And we all benefit. But the tax is not about helping people, but improving state's fiscal problems caused by the same jackasses that want to tax more.

I don't disagree with your sentiment regarding the sales tax. I only point out that it is not equitable to charge one business a tax burden while another has none. This was originally done to encourage the fledgling internet merchants. It's grown way beyond that. States count on sales tax revenue...and I consider a consumption tax to be one of the more equitable taxes...don't want to pay it??? Don't buy as much stuff. Of course the %$@$%'s will find something else to tax if they don't bring in enough from sales tax.

[Giant Communist Robot]

I only point out that it is not equitable to charge one business a tax burden while another has none

It's equitable in the sense that California only has authority in California. The issue I have in mind here is where does the transaction take place? A transaction with a physical location will pay tax, but over the internet how can one say the transaction doesn't occur with the buyer? Or somewhere in between? If buyer and seller are in two different states, why isn't this interstate commerce? In order to compensate for their jackassery, California's legislators want to reshape and redefine.

and I consider a consumption tax to be one of the more equitable taxes...don't want to pay it??? Don't buy as much stuff.

It's already taxed when you earn it. I believe it's strange thinking to consider it equitable to tax again when you spend. It's logically possible to extend this idea to taxing money when you don't spend it, too.

[Selma in Sandy Eggo]

Isn't there something in the Constitution about taxing interstate commerce? A prohibition? A specific clause forbidding any state to tax interstate commerce? I think that's an issue worth some attention.

[Selma in Sandy Eggo]

What? Nobody wants to discuss the "interstate commerce" issue? I just bought a kitchen gadget off Amazon. It shipped from Fresno. They collected tax. It's the interstate tax collection they're balking on, and I think it is a constitutional issue.

Nobody has suggested collecting California tax on mail order, or telephone order, sales from California. Yet.

[Giant Communist Robot]

Isn't there something in the Constitution about taxing interstate commerce? A prohibition? A specific clause forbidding any state to tax interstate commerce? I think that's an issue worth some attention.

I guess my legal naivete is showing again. Maybe it's an issue that will land in court.

[Shapley]

Simply put, states are not entitled to sales tax on purchases that do not occur within their state. Since internet states purchases involving companies in one state selling to a purchaser in another, it is an interstate purchase, and the state has no authority to tax it. The federal government does, but federal sales taxes are generally rejected.

[Giant Communist Robot]

I don't understand how California's affiliate tax works. Is it possible then for a seller and buyer in another state to use a Cal. affiliate, then owe taxes both places?

[Shapley]

My understanding has always been that the seller and the buyer have to be in the same state for sales tax to be collected, although that has not always been the case with regards to large capital purchases (my company has to collect and remit sales taxes to three states when we sell to customers located there, even though we have no physical presence in any of them).

[Haggis@wk]

I don't understand how California's affiliate tax works. Is it possible then for a seller and buyer in another state to use a Cal. affiliate, then owe taxes both places?

Most affliates are bloggers who have enough web traffic to qualify to post an Amazon banner and mention special Amazon sales. Anyone clicking on the banner at the website drives a few pennies to the blogger.

Maybe some the bigger websites make money but most don't, an acquaintance who runs a semi-technical medical blog for ED doctors makes from several hundreds to several thousand a year, certainly not retirement money.

[Shapley]

I think the affiliates in question here are the Amazon Marketplace affiliates.

If you search for a book at Amazon, they'll show their price, and prices listed as 'New From', 'Used From', and 'Collectible'. Clicking on those prices takes you to a list of affiliates (usually small bookstores) that have copies of the book for sale.

My best recollection is that I've always paid sales taxes whenever I've bought from an affiliate that was located in my home state. I assume California affiliates did the same. My understanding of this law is that Amazon would have to charge sales taxes on all sales to California residents, on the basis that having affiliates in California effectively gave them a 'presence' in the state, even if that affiliate had nothing to do with the sale.

I always have to pay sales tax on Barnes and Noble purchases, since they have brick-and-mortar stores in my home state.

[Giant Communist Robot]

Maybe some the bigger websites make money but most don't, an acquaintance who runs a semi-technical medical blog for ED doctors makes from several hundreds to several thousand a year, certainly not retirement money.

This is outrageously inequitable! Tax the crap out of them!

[Haggis@wk]

The Chicago Sun-Times reports:

Amazon.com Inc. says it plans to open a fourth Arizona distribution center, giving the state a nod for its hands-off stance on the issue of pressing online retailers to collect sales tax on shoppers’ purchases.

Seattle-based Amazon’s new 1.2-million-square-foot facility, planned to open in an existing building this fall, will join three existing distribution centers on the west side of the Phoenix metro area.

Amazon declined to provide specific figures but said the new facility will add hundreds of jobs, giving the company an Arizona work force of more than 3,000.

As you guessed: Illinois and California weren't going to get those jobs because they'd rather have jobs go somewhere else.

[piqaboo]

And the location decision had nothing to do with economies of personnel scale and having 3 facilities already in that location.
Only a tax issue, nothing to do with not having to set up a separate IS dept, HR dept, etc, nothing. Nope.

The initial decision to locate in AZ may be tax related, and even the decision to put the 2nd warehouse there instead of moving and building 2 elsewhere, but now there are other fish being fried in the equation.


I seem to remember a line on mailorder forms asking for state, and indicating when state tax had to be paid. I dont remember if that was for instate vendors or not. In future, I shall indicate state as "U4EA"

[Shapley]

"The initial decision to locate in AZ may be tax related, and even the decision to put the 2nd warehouse there instead of moving and building 2 elsewhere, but now there are other fish being fried in the equation."

Actually, for their type of business, it would make more sense to have the warehouses located at convenient points around the country to reduce shipping times and costs. Concentrating them all in one state puts them at a disadvantage, IMHO.

One of our industrial-supply distributors ships nationwide from warehouses located all over the nation. They offer next-day deliveries to many areas, without next-day air shipping costs, becuase of the convenient warehouse locations. They do all of this with a single order-processing station (with a backup in another state, I believe).

Amazon, however, has apparently decided that the sales-tax issue is a bigger threat to their market share than delivery costs.

[piqaboo]

Except that the sales tax wasnt an issue when they chose the locations for warehouses 2 & 3.

FedEx does well without that 'around the country' bit too.

[Shapley]

Actually, Fedex does have 'hubs' around the country:



Fedex is also in a different business.

[piqaboo]

Well, for whatever reason, except it was *not* sales tax, they chose to locate warehouses 2 & 3 right next to 1, in AZ.
Interesting.