Cali taxing internet ?

tonyb

http://www.latimes.com/business/la-fi-amazon-tax-20110630,0,4344787.story

Amazon isn't too happy about it. Never thought I'd see it but if I did I knew Cali would be a frontrunner.

Hopefully the source is Brett Approved.

Face

Amazon has been collecting taxes from their NY customers for a while now.

disneyjoe7

Also this about Amazon...

http://www.ocregister.com/articles/amazon-306409-affiliate-california.html

steveinaz

Cali's gotta do something to support all those gub'ment programs---god forbid we cut the hand-outs. It cost a lot of money to legislate bans on goldfish and circumcisions.

Jstas

If you are an NJ resident and the company you are buying from online is in NJ, the are required by NJ to collect sales taxes. Amazon has gotten away with it because they have no physical prescence in NJ. I think California might have a fight on it's hands since Amazon is not based in California. They might not be able to force Amazon or other out-of-state retailers to collect taxes. Online businesses are nothing more than mail order companies and those kinds of companies have been exempt from collecting state sales tax for a very long time.

Ron-P

It sucks, but we're not the first.

exalted512

I'm willing to bet this is going to be nation wide by the end of this decade.
-Cody

VR3

Internet sales tax has to happen.

Comparing mail order to the internet is ridiculous. I bet trillions of dollars are spent on the internet every year - where as mail order (catalogs) has to be a fraction of the sales that happen every day.

tonyb

My understanding is they have to have a physical presence in a state to be liable for sales tax. They have to have warehouses somewhere,right?

How do you keep track of all that ? Which sale originates from a location with a physical presense and which ones don't......AND does amazon pay taxes for every customer nation wide ? I would imagine if you live in Illinois and buy something from Cali, they add a sales tax, but then what if illinois was to also charge a sales tax when you buy something over the internet. Are we getting a double bubble sales tax applied or would it work by the origination of the buyer ?

Jstas

Vr3MxStyler2k3 wrote: »

Internet sales tax has to happen.

Comparing mail order to the internet is ridiculous. I bet trillions of dollars are spent on the internet every year - where as mail order (catalogs) has to be a fraction of the sales that happen every day.

No, it's not ridiculous. You're just too young to remember the days before the Internet where you had to make a phone call or fill out an order form and mail it in instead of buying the latest Harry Potter book while taking a dump on your throne.

It's the same principle. The only difference is that the Internet has made it easier and much more accessible. The Internet is mail order. You order something from a digital catalog and they MAIL it to you. That's mail order.

Face

I remember mailing order forms and waiting a month or two for the product to arrive. Now, I'm annoyed if I have to wait more than a week for something to arrive.

exalted512

I'm pretty sure its just...I'm in Texas, amazon is in Washington. If I buy something from Amazon, I'll pay Texas' 8.25% tax, not Washington's AND Texas' tax.
-Cody

VR3

No the internet and mail order are different.

Comparing mail order to the internet is like comparing your local gas stations grocery section to a Super Walmart.

Im sorry - it does NOT compare.

The internet is putting local businesses OUT OF BUSINESS purely over a 8% disadvantage.

Before people would rather go to a store than mail order because it was much more convenient where as now you only wait 3-5 days

Jstas

tonyb wrote: »

My understanding is they have to have a physical presence in a state to be liable for sales tax. They have to have warehouses somewhere,right?

How do you keep track of all that ? Which sale originates from a location with a physical presense and which ones don't......AND does amazon pay taxes for every customer nation wide ? I would imagine if you live in Illinois and buy something from Cali, they add a sales tax, but then what if illinois was to also charge a sales tax when you buy something over the internet. Are we getting a double bubble sales tax applied or would it work by the origination of the buyer ?

Yeah, physical presence. The only state where it doesn't matter is Delaware but they have no sales tax anyway. I know Amazon has offices in NYC and they might have a warehouse in NY as well so they have to charge residents tax. That's also the reason that you see a list of states where taxes must be charged when you're checking out. Those states are typically where the company has a physical presence, even if it's just a subcontracted warehouse acting as a shipping hub.

It's also quite easy to figure out where you are coming from. You have to enter a shipping address to get your stuff or to be billed, right? If not, it's easy to do a traceroute and track you all the way back to the digital switching station just before your house connection that handles your phone line or cable connection. You're rarely more than 5 miles from it and since states have excise taxes for maintaining infrastructure, rarely do the switching stations cross state lines. So if your switching station is in East Bumblecluck, Illinois and you live in West Bumblecluck, Illinois then it's safe to assume that you owe Illinois state sales tax on your transaction.

The only place where they can't charge it is a person to person private sale like on eBay. However, a while ago, eBay was charging the state sales tax on any item listed as "New" condition, charging it and then taking it out of the transaction before the payment ever hit the seller's account. I think they stopped that now but that was back when the states started making the sales tax restrictions and eBay was CYA'ing it.

Jstas

Vr3MxStyler2k3 wrote: »

No the internet and mail order are different.

Comparing mail order to the internet is like comparing your local gas stations grocery section to a Super Walmart.

Im sorry - it does NOT compare.

The internet is putting local businesses OUT OF BUSINESS purely over a 8% disadvantage.

Before people would rather go to a store than mail order because it was much more convenient where as now you only wait 3-5 days

Listen kid. Volume doesn't matter.

Sears had a catalog for a very long time. You'd page through, find something you want and fill out the form with a check or money order included and mail it back. In 2-3 weeks, your merchandise showed up at your front door.

Now, Sears doesn't have a catalog anymore. They have Sears.com. You go to Sears.com, peruse the selection, find something you want and click "Buy". It goes in your "Shopping Cart". When you're done, you click "Checkout" and are presented with multiple ways to pay. Everything from instant transactions with credit cards or PayPal to printing out your order and mailing it in with a check or money order. Depending on how long your transaction of money transfer takes, you see your item in a couple of days.

Whether it's a bunch of paper and dudes dressed in blue uniforms doing all the moving or a bunch of 1's and 0's flying across phone lines, it's still mail order. Technology has just made it much more efficient and speedy.

But you're right, you can't compare it. It's the same damn thing. The presentation has just changed. Just because you can't remember a world without the Internet doesn't mean that "before time" didn't happen.

Hell, my first car stereo was bought from Crutchfield mail order. Took 2 months to get the entire transaction complete. Now, the same transaction at Crutchfield happens in 2 days if I get my order in before 3pm eastern time.


One last thing, the definition of mail order:

mail order
n.
An order for goods to be shipped through the mail.

An order, from a paper form or a digital one is still an order. Since the items are shipped to you through mail or a private shipping company and not hand delivered to you, it's coming by post/freight. Therefore, it's an order that gets sent through mail, i.e. mail order.

bobman1235

Vr3MxStyler2k3 wrote: »

No the internet and mail order are different.

Comparing mail order to the internet is like comparing your local gas stations grocery section to a Super Walmart.

Im sorry - it does NOT compare.

The internet is putting local businesses OUT OF BUSINESS purely over a 8% disadvantage.

Before people would rather go to a store than mail order because it was much more convenient where as now you only wait 3-5 days

The Internet IS mail order. How can you say it's different? You're ordering something and getting it via mail. Do you not know what mail order means? Order, get by mail. Mail order.

Internet sales tax doesn't HAVE to happen. I live in a state with no sales tax. Repeat : NO sales tax in NH. And yet mom and pops aren't faring much better here than anywhere else, why is that?


A state has no right to impose their taxes on a company that does not operate within their state. Period.

drselect

I believe several states already have taxes on internet purchases in place. It usually is in the form of a "use tax". If you buy stuff over the internet you need to keep track of it and then report the amount of your purchases on your income tax form each year and pay the appropriate tax on the items you purchased. I would be willing to bet that many people in these states that have "use taxes" don't pay them.

inspiredsports

Several years ago, Internet sales move from not being taxed at all to being based upon the legal concept involving the term NEXUS, (a connection, a link, a causal link, a connected group or series).

If I have an office in Ohio and a warehouse in Pennsylvania, a sale in either state is taxable, but sales to other states were not taxable.

Elected officials will always move to capture more and more so they can continue to dole out funds to buy re-election.

BlueFox

Vr3MxStyler2k3 wrote: »

The internet is putting local businesses OUT OF BUSINESS purely over a 8% disadvantage.

Partially. Also, sometimes the retail price is lower, and free shipping is included. Throw in no sales tax as icing on the cake.

Over the last few years I must have bought around $20K worth of stuff (furniture, audio/video gear, clothes, shoes, books, CDs, DVDs, BRDVDs, etc.) from home. More than likely, if I had to go to a store I would have bought only a fraction of that.

dkg999

Just get rid of sales taxes and the problem is solved!

VR3

I just dont agree with anything in this thread.

So I just wont reply anymore.

Either we need to get rid of sales tax completely or it should be a FAIR market place where internet and local sales are both taxed.

Ron-P

The good news is CA sales tax is dropping 1% on July 1st. I am curious though, what is the sales tax in your state. Let's make a poll...

AsSiMiLaTeD

Amazon has a huge warehouse here in the DFW area. A while back the state tried to step in and say all TX residents would need to pay sales tax on Amazon purchases. Amazon basically said 'if you're going that route then we'll just move out distro center (and the hundreds of jobs it creates) to a state that won't impose that rule'.

There are no taxes on Amazon purchases in Texas, and likely won't be for quite a while.

I'm sure they still pay corporate taxes and such, but there's no sales tax that gets passed on to the buyer.

exalted512

Ron-P wrote: »

The good news is CA sales tax is dropping 1% on July 1st. I am curious though, what is the sales tax in your state. Let's make a poll...

so one of the most in-debt states is going to drop a form of revenue?

Sounds smart to me.
-Cody

bobman1235

Considering California's tax rate is driving out businesses, it's not a foregone conclusion that a lower tax rate will lower revenue.


Also, I love when people "disagree" with facts

exalted512

Economically speaking, you very well could be right. Lowering taxes can and does improve spending.

I just hope CA is doing something besides lowering taxes to help get their debt a little more under control.
-Cody

madmax

tonyb wrote: »

My understanding is they have to have a physical presence in a state to be liable for sales tax. They have to have warehouses somewhere,right?

That is correct. They pulled this same crap in Colorado too. Guess what happened, they pulled their facilities out of Colorado. :biggrin:

When a state gets greedy this is what happens, loss of jobs and tax revenues from jobs, not to mention they don't get the internet taxes they were going after either. I love capitalism! :biggrin::biggrin::biggrin:

tonyb

http://www.foxbusiness.com/2011/06/30/amazon-drops-10000-california-partners-report/

I wonder if some how this move will hurt them in the long run. The way I see it, is you can't run from taxes, you can only vote in/out those that seek to keep raising them.

madmax

Same headlines as here. Some people are of the mindset of eff it, we will do business elsewhere. I wonder how many jobs will be lost?

steveinaz

Nothing like burning the candle (bridges) at both ends.

ohskigod

I'm pretty familiar with nexus laws as I used to enforce via a via out of state businesses doing bus in nj and determining if they have enough presence in the state to trigger a tax liability. I think Cali is
Stretching from what I can see but admittedly I can not see
All the facts. This one might go to the supreme court, where many nexus case law decisions have been made