Amazon.com cuts California sales tax deal in stunning turnabout

Post by impendia » Thu, Sep 08, 2011, 10:40 PM UTC

mediaman wrote: post #13

reemrevnivek wrote: post #4

> While Democrats and Gov. Jerry Brown fretted that they would lose $200 million a year in sales taxes California residents are supposed to pay use tax on internet purchases regardless of the physical presence of the retailer, right? Running the math: the $200 million/year loss that they claim is an estimate on tax fraud on just Amazon purchases? At a 7.25% tax rate, that's a tax on $2.7 billion in sales, and Amazon'…

The rate of buying products online isn't going to be the same in every state, and it's reasonable that it would be slightly higher in CA than in other states. And on use-tax: have anyone ever met someone who paid use-tax on goods purchased from Amazon? Most consumers don't even know they're supposed to, and audit enforcement is expensive and therefore uncommon.

Post by hga » Thu, Sep 08, 2011, 10:43 PM UTC

shoota wrote: post #33

weaksauce wrote: post #26

Earlier quoted context omitted.

In California there are different tax rates for every county in the state. see http://www.boe.ca.gov/cgi-bin/rates.cgi

They have different rates even down to the city level take a look here http://www.boe.ca.gov/cgi-bin/rates.cgi?LETTER=A&LIST=CI...

Post by gojomo » Thu, Sep 08, 2011, 11:05 PM UTC

nknight wrote: post #38

gojomo wrote: post #20

Earlier quoted context omitted.

Somewhat unlikely. Amazon has a number of wholly-owned subsidiaries in California with sizable technical staffs: A9 (search; Palo Alto), A2Z (mobile/media product development; 5 California offices), Alexa (analytics; San Francisco), and probably others. There's also a Northern California EC2 Region. That's a very strong 'nexus' that would cost them a lot (in money and talent) to uproot. I suspect Amazon sees the way…

You've just cited a bunch of companies that are separate entities owned by Amazon. US courts have a very strong presumption against attributing the acts, economic or otherwise, of a corporation to its owners. It would be virtually impossible for California to win in court on the grounds of A9, A2Z, Alexa, or Amazon AWS having offices in California. None of those companies are involved in Amazon.com's separate retail…

Post by sokoloff » Thu, Sep 08, 2011, 11:15 PM UTC

Symmetry wrote: post #29

earl wrote: post #25

Earlier quoted context omitted.

Amazon has 33k employees [1], estimated; they can figure it out. Also, I'm positive there's at least one company selling such information -- thousands of other retailers, most much smaller and much less technically sophisticated than Amazon, still manage to make it happen. This is an idiotic excuse. [1] http://en.wikipedia.org/wiki/Amazon.com

Actually, I'm pretty sure you're wrong about companies selling this information. Smaller retailers manage to avoid this hassle by... not having to pay sales tax for out-of-state purchases. That might be whats behind Amazon's change of heart. This will be difficult for them, but its probably impossible for smaller retailers. It might be expensive in the short term, but it protects them from competition in the long run…

Post by joezydeco » Thu, Sep 08, 2011, 11:24 PM UTC

ericabiz wrote: post #16

joezydeco wrote: post #14

Earlier quoted context omitted.

From another point of view: what if you're not Amazon and doing online retail in California? Amazon now has a one-year price advantage. Is it enough to disrupt market share in that state?

Amazon is not currently collecting sales tax in California, so there's no change until Sept. 2012, when it will start collecting sales tax in CA (assuming this goes through.) It's business as usual until then.