Amazon Offers To Hire 7,000 If California Waits On Sales Tax

http://www.forbes.com/sites/ericsavitz/2011/09/02/amazon-offers-to-hire-7000-if-california-waits-on-sales-tax/

by zackbelow • 15 years ago

14 30 15 years ago

forbes.com

crxpandion• 15 years ago

http://www.forbes.com/sites/ericsavitz/2011/09/02/amazon-off... is the correct link

zackbelow3• 15 years ago

thanks!

wccrawford• 15 years ago

I wonder if there isn't a hidden threat there, too... That they'll pull jobs from California if they don't get their way?

They're obviously able to choose where the jobs go, or this offer wouldn't make sense at all.

masterzora• 15 years ago

That's not a hidden threat; that's been an open threat for ages. Amazon has a history of pulling out operations in states that try to pass similar laws and they said they'd do the same in California. This offer was an attempt to avoid that.

guywithabike• 15 years ago

It's a sad day when corporations can openly blackmail the government.

hexis• 15 years ago

This might be characterized as a bribe, but how could it be blackmail?

redsymbol3• 15 years ago

Oh come on. This isn't blackmail, it's offering an exchange that's win-win. California wants - actually, badly NEEDS - jobs; Amazon wants to avoid or at least delay the sales tax. They have every ethical and legal right to make the proposal.

If I'm selling burgers for $5, and you give me $5 for one because you're hungry, am I "blackmailing" you to get your cash?

Perhaps I'm missing something? If so, please point it out.

joezydeco2• 15 years ago

They're "blackmailing" the politicians by making it look like they don't want jobs in California. That's a pretty sensitive subject to be voting against...at least when Amazon frames the argument that way.

The reality is that the jobs brought in will amount to about 2% of the sales tax revenue that would be brought in. But do you think the public will understand the math, or the phrase "voted against job creation"?

mturmon• 15 years ago

There are two things you're missing.

First, Amazon has studiously avoided any effort to collect state sales tax. They use a variety of clever dodges to raise doubt that their design and development shops in CA amount to a business presence in CA. The "affiliates" program, recently shut in CA, was another such dodge. Same with the distribution centers being a "separate" company.

Then, when the state decides to go ahead with collecting something that is theirs to collect, Amazon tries to deflect it by raising a totally different matter (jobs in the state). The fact that they're not arguing their sales tax case directly, but threatening to pull jobs, is another aspect of the case you're missing.

I don't see how this is "win-win".

Here's a summary of the TX situation:

http://www.internetretailer.com/2011/05/16/texas-moves-ahead...

Featuring this choice quote which is replete with doublethink:

"We're committed to growth in Tennessee because the people here have demonstrated their commitment to Amazon jobs and investment," says Dave Clark, vice president of Amazon North America Operations.

solson• 15 years ago

Why? It is fair play. The government has been openly coercing and blackmailing private individuals and businesses since the beginning of governments.

temphn• 15 years ago

Government agents have guns. Amazon does not. Who's really threatening who? The only card Amazon has to play is to leave.

thisuser• 15 years ago

Exactly. Texas called Amazon's bluff. Amazon folded.

snorkel• 15 years ago

Unlikely to deter the tax. 7000 added jobs not much compared to the hundreds of millions California projects to earn from the ecommerce tax.

warmfuzzykitten• 15 years ago

It's a whole lot more than the zero California will earn from the ecommerce tax. California still has no authority to enforce a sales tax outside its borders. Amazon now has no physical presence in California. So far the only effect of the tax is to lose jobs in California.

michaelpinto• 15 years ago

It was just a few weeks ago I was watching Steve Jobs give his pitch for Apple's new campus in California -- at one point Jobs broke out the idea that the benefit to the state was Apple paying their taxes. In other words the way a company is a good corporate citizen is by increasing the tax base. What's sad here is that Jobs was talking about payroll tax, not even sales tax. The right thing for Amazon to do is to collect that tax instead of cheating the kids of California. Also special deals for big companies (be it Amazon or Walmart) are always unfair to small companies that don't get the same breaks. If you're going to give a sales tax holiday to anyone it should be startup companies in California that can use the boost.

InclinedPlane• 15 years ago

State governments do not have the right to collect sales tax from companies that have no presence in their state.

matwood• 15 years ago

Interesting that you think it's Amazon that is cheating the kids in CA and not the politicians (or other huge lobby siphoning money from the CA tax payers).

With that said, state sales tax has always been about collecting tax if the business has a presence in the state. This works for Amazon all the way down to the mom and pop that sells across the internet to people in another state.

Most (all?) states have a line item on their tax forms where the tax payer can write in a value on items they purchased out of state and need to pay taxes on. I'm guessing very few people fill that line in. It touches on another problem that no one wants to pay taxes (they always want someone else to pay), yet they want more and more services from the government.

jinushaun3• 15 years ago

In a state like CA which manages to be on the brink of bankruptcy despite pulling in the largest amount of tax revenue in the US, I think the solution is cutting spending, not throwing more money down the drain.

derobert• 15 years ago

California is also the most populous state in the US. Looking at one figure without the other is rather silly.

Per capita, California does not bring in the highest amount of revenue of any state. In 2008 (the latest year I could quickly find data for), its #8 (#9 if you include DC). As a portion of personal income, CA is #11 or #12 (with DC).

Sources: http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc... http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc...

zackbelow3• 15 years ago

On top of the ridiculous sales tax bill have you seen the Babysitter bill? http://www.theunion.com/ARTICLE/20110830/BREAKINGNEWS/110839... It is a bill being considered that says that if you hire a babysitter, you've got to provide breaks every 2 hours (which means you've got to hire another babysitter), plus pay for workman's compensation and keep track of taxes.

jinushaun3• 15 years ago

I agree that it's a stupid bill, but don't be so sensational. The bill only applies to babysitters over 18, which are typically professional care givers (i.e., nannies).

bradleyland2• 15 years ago

"which are typically professional care givers"

There's nothing sensational about calling that bill ridiculous. Not everyone who is over 18 and watches children on occasion for money is a professional care giver. Most of my friends have a 20-something friend that will watch their kids for them on date-night. They prefer the 20-something friend to a much younger babysitter because of maturity and responsibility. This person has a day-job, but they don't mind watching their friends' kids from time to time.

Amazon Offers To Hire 7,000 If California Waits On Sales Tax

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