Amazon joins Walmart in push for online sales tax

http://washingtonexaminer.com/carney-amazon-joins-walmart-in-push-for-online-sales-tax/article/2503738

by hadronzoo • 13 years ago

38 38 13 years ago

Surio• 13 years ago

The crux of the article is this:

Amazon joins Walmart in push for online sales tax not out of some newfound concern for "marketplace fairness," but because Amazon's business model is changing in such a way that now Amazon stands to benefit from this tax.

In order to provide faster shipping, Amazon is building warehouses throughout the country. These warehouses constitute a "physical presence," which requires them to collect sales taxes, in any event. So, if Amazon is going to have to collect sales taxes under the existing "physical presence" doctrine, it may as well try to expand online sales taxes to whack its smaller competitors who don't have a 50-state network of giant warehouses.

Sigh!

Rudism• 13 years ago

I'm not sure if I'd be unhappy about paying sales tax on Amazon purchases if it meant free same-day shipping as a Prime member (or free next-day shipping for non-Prime), which is what I recall they're looking at switching to once their network of warehouses is ready.

unabridged• 13 years ago

I just want Amazon Fresh, then I never have to leave the house.

lurker14• 13 years ago

Amazon really doesn't have any competitors in the mail order business. Any would-be competitors are partners/clients.

harlanlewis• 13 years ago

That businesses may use Amazon services like FBA does not mean they aren't directly competing with Amazon's B2C.

e40• 13 years ago

It's the same as when Wal Mart pushed for higher minimum wage. The target they argued for was below their own minimums, and it would only serve to decrease profits at other stores where they paid the actual current minimum wage.

h1srf• 13 years ago

The article doesn't mention one important historical factor. For years, Amazon was fighting to not collect taxes until more and more states started passing laws saying online retailers must collect sales tax at the behest of B&M merchants. Rather than fight a losing battle, they decided to beat those merchants at their own game: "Fine, you want us to collect sales tax? We'll build warehouses everywhere and have same day delivery instead of having warehouses in only a couple of states."

I live in NY where Amazon already collects sales tax so it doesn't really matter to me.

speeder• 13 years ago

Yay for using government to blast competition to little bits!

jdechko• 13 years ago

Not that this is anything new. The government has granted a duopoly in almost all markets for cable/ internet services, and local governments are being sued for attempting to bring in their own networks.

As much as it sucks, money is power.

jackmoore• 13 years ago

Just noting that this article is from last August.

hadronzoo• 13 years ago

Note that the Marketplace Fairness Act has been reintroduced in the Senate: http://www.reuters.com/article/2013/02/13/us-usa-tax-online-...

jivatmanx• 13 years ago

Bad from an environmental perspective: Mail delivery uses a fraction of the carbon of driving to the store.

streptomycin• 13 years ago

Even if that's true, solving an environmental problem by applying different sales tax depending on how you buy something is wacky and undoubtedly fraught with inaccuracies and unintended consequences. A much better and more direct solution for the externality of carbon emissions is a carbon tax.

SoftwareMaven• 13 years ago

Because carbon taxes have no weird, unintended consequences.

tomjen3• 13 years ago

The lobbyists are going to be the death of the United States.

I can't blame Amazon though, just looking out for themselves which is the same as the rest of us do.

shpxnvz• 13 years ago

> The lobbyists are going to be the death of the United States.

I can't blame the lobbyists either, they're just looking out for themselves the same as the rest of us do.

I can blame the legislators. They're the ones with a monopoly on force wielded against us for their own gain.

ataggart• 13 years ago

I can't blame the legislators either, they're just looking out for themselves the same as the rest of us do.

I can blame the electorate. They're the ones granting the power and the legitimacy to the force wielded against us.

nathanb• 13 years ago

Takeaway: you will already be paying sales tax on your Amazon purchases in the future, and Amazon want to force other retailers to do the same in order to keep the playing field level.

PavlovsCat• 13 years ago

That's an interesting definition of "level".

georgemcbay• 13 years ago

I'm not so sure this is a playing field leveling as much as it is someone who grew massively from eating a certain fruit scorching the field the fruit grows on after he's grown into a giant.

(I say this as a fan of Amazon -- I use them all the time and will continue to do so, but this is a purely shrewd corporate move and shouldn't be confused with making things fair).

jessaustin5• 13 years ago

So much for Amazon's risible old saw that "sales taxes vary so much among jurisdictions that calculating taxes would be an onerous burden for us". There is some business size at which that is true, but Amazon has never been that small. Lots of folks use Vertex: http://www.vertexinc.com/solutions/indirect/sales-tax.asp

Since Amazon has been growing its SaaS business for some time now one had to expect they were eventually going to want to make operating shopping cart checkout by yourself as tricky as possible. They might start lobbying municipalities to pile on the complications now that they're on the "right" side of this dispute.

Hawkee• 13 years ago

I'm surprised this article made no mention of the affiliate nexus laws that have been passed over the past few years. The law was first passed in New York requiring Amazon to collect sales tax from NY customers. NY claimed Amazon's NY "associates", affiliates earning commissions for sending customers to Amazon, represented a physical nexus. Amazon agreed to collect the tax in this case, but it opted not to collect tax in other states who enacted a similar law. Instead Amazon effectively "fired" all of the affiliates living in those states. In one case Fat Wallet, a major player in the online affiliate industry, moved their company out of Illinois because they lost many of their affiliate partners. Illinois didn't gain anything and lost a source of income tax. This has been a major issue in the affiliate industry as it cuts off huge sources of revenue for affected affiliates. Amazon is pushing for the federal government to step in partly because they don't want to lose their online marketers. Secondly, they don't want to maintain a database of tens of thousands of tax jurisdictions across the country.

jessaustin5• 13 years ago

maintain a database of tens of thousands of tax jurisdictions across the country.

This was always a red herring. Vertex (and presumably others, although I've only worked with Vertex) already maintains this database, and will help any company calculate taxes for a reasonable fee. Corporations with far lower revenues than Amazon have been taxing in many jurisdictions for decades.

IgorPartola• 13 years ago

Having just filed my taxes, and gone through the "so how much tax free stuff did you buy online?" rigmarole this would actually make my life easier. The article calls all but eBay and Overstock.com "Mom and Pop" shops. A real local store that happens to sell stuff online will actually benefit from this law. States will benefit, since this law will actually level things. The only places that will suffer are Amazon's smaller competitors, which otherwise would just turn around and try to crush the local brick and mortar small shops.

Amazon joins Walmart in push for online sales tax

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