California is the latest state to tax Amazon.com purchases

There are two things that are certain in this world: Death and taxes. California is proving the latter as they join six other states in attempting to force online retailers to charge sales tax on purchases made by citizens of the state. The LA Times is reporting that the measure is expected to pull in an estimated $317 million a year in revenue to the struggling state.

At issue is the fact that a 1992 Supreme Court ruling states that a state can’t force the collection of taxes if the seller doesn’t have a physical presence in the state. To get around this, states are considering affiliates and advertisers as a physical presence. To counter this, Amazon.com and Overstock.com have both severed their affiliate programs in many states; according to the article, California collected $152 million in state income taxes last year, money that will no longer be flowing into the coffers.

Many people are unaware of the intricacies in sales tax laws in the United States and believe it’s as simple as charging a flat rate to everyone in a state. Unfortunately nothing is that simple; according to Tax Lawyer NYC, there are approximately 11,000 different sales tax jurisdictions in the country and to force a company to keep track of them all forces an additional burden and a large expense. It’s unlikely that a small company would be able to compete on the Internet if they were forced to collect taxes for every jurisdiction in the country. It’s ironic that companies like WalMart, notorious for moving into cities and destroying small businesses, have been complaining about Amazon having an unfair cost advantage.

As states try to balance their budgets, large online retailers have increasingly become easy targets due to the fact that they’re out of state and could potentially generate millions of dollars. It will be interesting to see if these new laws will have an impact on future e-commerce both from established companies as well as new startups.

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Globalization here we come. Everyone pays the same for the item but depending where they live pay different premiums to retrieve it.

I order a bunch of stuff from Amazon and Newegg... so long as I don't pay a tax on it I'll continue to but if that changes I'll change locations of most of those purchases.

Is this different from std Tax or is this like another tax on-top of normal tax?

If you guys dont get taxed on Online sales ur lucky

Then again i dont think we have Online Only shops

brent3000 said,
Is this different from std Tax or is this like another tax on-top of normal tax?

If you guys dont get taxed on Online sales ur lucky

Then again i dont think we have Online Only shops

In the USA you pay federal taxes on your wages, state taxes on your wages, and sales taxes on items purchased based on what state you purchased it in... most of the time its a lot less then a VAT type tax but it depends on a lot of factors

This happened in IL. Both California and Illinois are probably the two worst states to be in. I want to move - I hate America and their damn liberals.

Strong statement, I know.

psionicinversion said,
I'm surprised arnie doesn't go terminator on there ass!!

Arnie has no power in California anymore

psionicinversion said,
I'm surprised arnie doesn't go terminator on there ass!!

They tried to pass this before but Arnie vetoed it. Now Arnie has no power and it's all dems, they've passed it. But in doing so they've hurt themselves more.

How about making the big corporations pay their fair share.
G.E. paid no federal taxes last year. Yet they made billions in profits.. They tweak the books so all the profit is foreign. All the expenditures is US. They are not the only corp doing this. Now they have petitioned congress to drop the corp tax rate from 35% to 5%, saying then they can bring this money back in to the US to help stimulate the economy. Or how about the billions in tax breaks to the flippin' oil companies. This is whats wrong with this country....total BS and GREED!!!!

dreckman said,
How about making the big corporations pay their fair share.
G.E. paid no federal taxes last year. Yet they made billions in profits.. They tweak the books so all the profit is foreign. All the expenditures is US. They are not the only corp doing this. Now they have petitioned congress to drop the corp tax rate from 35% to 5%, saying then they can bring this money back in to the US to help stimulate the economy. Or how about the billions in tax breaks to the flippin' oil companies. This is whats wrong with this country....total BS and GREED!!!!

I'm quite sure many people have heard about that by now, but this article isn't about federal taxes. It's about state's sales tax...

Wow ... some of you guys should live in Europe some time I find it really surprising to find such vehement opposal to sales tax on online goods - they're still goods, just bought in a different fashion.

Hell, it would just be lovely if prices in the US included sales tax in the immediate prices rather than adding it later (yeah, I know it's made more complex by the states system).

Kirkburn said,
Wow ... some of you guys should live in Europe some time I find it really surprising to find such vehement opposal to sales tax on online goods - they're still goods, just bought in a different fashion.

Hell, it would just be lovely if prices in the US included sales tax in the immediate prices rather than adding it later (yeah, I know it's made more complex by the states system).


The thing is that sales tax is supposed to be collected because it helps the local government take care of the store. For example, it builds roads, police and fire departments to protect the business, and that sort of thing. That's why if a store has a physical presence in the state, you pay sales tax - because the warehouse or whatever is using public resources. But if there's no physical presence, what are you paying the tax for? There's no benefit, it's simply a way to line the government's pockets.

Kirkburn said,
Wow ... some of you guys should live in Europe some time I find it really surprising to find such vehement opposal to sales tax on online goods - they're still goods, just bought in a different fashion.

Hell, it would just be lovely if prices in the US included sales tax in the immediate prices rather than adding it later (yeah, I know it's made more complex by the states system).

Also don't forget, we have income tax, you just have VAT. If we all went to a Fair Tax or Flat Tax system maybe the situation would change.

Fezmid said,
The thing is that sales tax is supposed to be collected because it helps the local government take care of the store.
I've never heard that explanation before. I couldn't say if it's true, but it sounds like an explanation after the fact rather than a true reasoning. A quick Wikipedia look up suggests it's a type of 'consumption' tax - i.e. taxing people based on what they use (which can be a method of 'fairer' taxing).

stormlifter said,
Also don't forget, we have income tax, you just have VAT. If we all went to a Fair Tax or Flat Tax system maybe the situation would change.
We (the UK) have income tax too.

Edited by Kirkburn, Jul 1 2011, 11:32pm :

honestly, and this is from a point of view of seeing malls and stores failing now due to no sales tax on the net and states going basically bankrupt due to lost revenue...... there almost needs to be a sales tax on the net, not as some people interpret it as "taxing the web" but a sales tax... we kind of made it an unfair playing field by saying on the internet you pay no tax, but in the store we are going to tax you on the same item..... I've even seen some naive people go as far as buying most stiff on the net instead of in a store because "there is no tax" yet they pay about the same due to shipping if its not free at the time.....

but in a place like Pennsylvania or California where a lot of warehouses are at you end up paying tax on most net items to start with as the business has a presence in that state, you have to pay state taxes on anything sold from it...

Stewart Gilligan Griffin said,
...snip

Malls and stores aren't failing because of no sales tax on the internet. They are failing because of the economy and the amount of people that are unemployed.
Amazon has been around for 20 years now. To suddenly say they are causing brick and mortar stores to fail is ludicrous.

Stewart Gilligan Griffin said,

...

Plenty of people still shop at local stores. Have you stopped shopping at local stores? I'm quite sure most people still buy groceries in person, find bargains at the mall, among other stuff. Many people still buy regular purchases too, either because of the convenience or they just want it right now without the extra shipping charges.

i think that NY have extra tax too even in digital purchase which really sucks....

anyways taxing the internet its bad

AFineFrenzy said,
We get VAT'ed to hell and back in England, anyway. Man up, America!
We don't get "free" healthcare, so taxes SHOULD be lower. All that taxes should pay for is Police, Fire, Roads, and Protection - nothing else. The states should suck it up and actually manage the money that they do get well.. Idiots.

Yeah, er, the UK has representation. Kinda why they were so annoyed - the UK *did*, the US *didn't*. What has that got to do with 'fleeing' the UK?

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