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Amazon Sales Take a Hit in States With Online Tax

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Re: Amazon Sales Take a Hit in States With Online Tax

#41

Post by gtaylor »

benaiah wrote: post #34
gtaylor wrote: post #8

I'll gladly pay an additional 6-10% to keep avoiding Wal-mart or Target or even Home Depot. There are people like me who just really hate having to suit up and go shopping. I don't like the traffic, I don't like getting ripped off, and I don't find in-store shopping a fun or magical experience like some do. I can pull up Amazon and read ratings/reviews, see what kind of problems people ran into with products, and mak…

I'd buy a LOT more from Amazon if I didn't live in Alaska and have to wait at least a week and a half for shipping. I hate shopping - if I could reliably get something in a couple days, I'd almost never even need to leave the house, except for groceries.

> I hate shopping - if I could reliably get something in a couple days, I'd almost never even need to leave the house, except for groceries.

This is exactly how I feel. The primary draw of Amazon for me is that it lets me avoid the brick-and-mortar shopping "experience". Heck, I'd pay extra to not have to deal with it.

Re: Amazon Sales Take a Hit in States With Online Tax

#42

Post by mzs »

chc wrote: post #29
justinsb wrote: post #25

Earlier quoted context omitted.

I suspect if you tried to do it federally it would be a violation of States' rights and thus unconstitutional.

There's always a way around that. Most likely you'd just do it like many other federal carrots — "This tax is levied on all online purchases and will be distributed to the state of the recipient provided that state does not impose any additional taxes on the purchase." You're not depriving the states of their right to tax the purchases, but it will be onerous to their residents if they don't go along with the federal…

Clever but why should this sales tax go to the state I live in instead of say the community where the item was shipped from? It's really more of a duty or use tax in such a case, like in the old days where I would order something from a catalog not in the state I live in, I was supposed to pay a use tax to this state of the difference between the sales tax here and what I might have paid in taxes when ordering when I did my state income taxes. They really should not call it a sales tax, it potentially gets collected by a state that has nothing to do with the sale at all and the cities and states that had to do with it did not collect any of it.

Re: Amazon Sales Take a Hit in States With Online Tax

#43

Post by bbq »

adventured wrote: post #16
bbq wrote: post #10

> Amazon supports federal legislation that would explicitly let states require tax collections by all online retailers above a certain size. This would give Amazon a huge competitive advantage (given their existing infrastructure). Of course they support this.

They get hit with flack coming or going. If they're against online taxes, then they're accused of not doing their fair share to support government coffers, or they're accused of getting an unfair competitive advantage (per offline retailers). It's similar to Walmart's minimum wage support. If Walmart were against minimum wage increases, their opponents would lambast them for it. If they're in favor of it, they get ac…

You're right, I said this accusingly and that's unproductive. I think legislation like this should exist. I don't think it's right to ignore the advantage (assuming we accept they have one here) and the legislation should take it into account.

Re: Amazon Sales Take a Hit in States With Online Tax

#45

Post by robryan »

justinsb wrote: post #9
minouye wrote: post #7

The biggest sales uptick -- 61 percent for big-ticket items -- went to merchants that use Amazon Marketplace...That means Amazon still indirectly benefits, since it collects a fee from merchants on its marketplace. Not sure why they buried this at the end of the article. Amazon can still attract price-conscious shoppers by funneling them to marketplace sellers that don't collect sales tax, and can now invest in more…

This does seem the most important conclusion. What's likely happening is Amazon is no longer showing themselves as the top seller in some cases. Consumers are still buying on Amazon, but from a different seller, who does not charge sales tax. What would be impressive is if Amazon made an (algorithmic) judgment call, and showed price-sensitive shoppers that would otherwise go elsewhere the cheaper seller, and shoppers…

They already do that with fulfillment by amazon. There is a certain price difference for which Amazon will show you that fulfilled product vs a cheaper marketplace offer with slower fulfillment/ shipping.

Re: Amazon Sales Take a Hit in States With Online Tax

#46

Post by sytelus »

I read the book "The Everything Store". There are large chunk of chapter devoted to how Bezos fought against paying tax. Originally, the argument was that online retailers don't use facilities provided by states so they are not obliged to pay any taxes to states. If I remember correctly, this follows almost directly from constitution. But then states like New York found a loophole which basically says if you have any affiliates in the state then you are physically in that state and so you are obliged to pay taxes. This thing is very messy because some regions not only have state tax but even district and city taxes. So calculating them is very complex task.

When I thought about the whole situation, it became apparent constitution has a bug here. The sales tax is not supposed to be levied because the state is providing some service to the business. It is levied because that's how states want to distribute the burden of taxes on two components: What you earn and what you spend. This way you can target most of the money flow that happens in the state even for edge cases where a person don't have regular income but spends a lot out of his or her inheritance.

So summary here is that online retailers got lucky from this bug in constitution. It was extremely unfair to brick-and-mortar guys who not only have to spend lot of capital but also pay full taxes losing their competitive edge even faster.

Note: Above are just observations and logical arguments. Personally I don't have lot of respect for current tax system.

Re: Amazon Sales Take a Hit in States With Online Tax

#47

Post by sliverstorm »

ja27 wrote: post #23
WalterBright wrote: post #14

Earlier quoted context omitted.

That's right. Going to the mall to buy something is a 2-3 hour time sink, plus gas. Buying online is about 5 minutes, no gas.

The "no gas" part is big. I don't think many people realize how much they spend on gas to run errands. A quick run to Target for something is about a 10 mile round trip from my house or about $2 in gas for a typical minivan. A Home Depot or Lowes is more like $4 from here, $5 with tolls.

Varies hugely from person to person. Target, Lowes, and Home Depot are all right on my way home from work. If it's a weekend, they are ~5 miles round trip.

Re: Amazon Sales Take a Hit in States With Online Tax

#48

Post by zorpner »

ja27 wrote: post #23
WalterBright wrote: post #14

Earlier quoted context omitted.

That's right. Going to the mall to buy something is a 2-3 hour time sink, plus gas. Buying online is about 5 minutes, no gas.

The "no gas" part is big. I don't think many people realize how much they spend on gas to run errands. A quick run to Target for something is about a 10 mile round trip from my house or about $2 in gas for a typical minivan. A Home Depot or Lowes is more like $4 from here, $5 with tolls.

Absolutely. My favorite is running the numbers to figure out how far out of the way it's worth going to buy cheaper gas -- for my MPG/the size of my car's tank, typically less than half a mile for a 10¢ difference.

Re: Amazon Sales Take a Hit in States With Online Tax

#49

Post by brc »

coreymgilmore wrote: post #2

The push to tax Amazon is so online and brick-and-mortars are treated equally in a tax sense. Yet the states that have enacted taxes on Amazon, do not collect taxes unanimously from all businesses selling online within their borders. It seems to me that states need to find a new method to treat all online sales equally as well, and not separate Amazon into its own tax bracket. Is each company that faces a legislature…

If it were up to me I'd just can the sales tax on the brick and mortar stores as well. There is always some spending you can cut somewhere.

Re: Amazon Sales Take a Hit in States With Online Tax

#50

Post by sliverstorm »

gtaylor wrote: post #8

I'll gladly pay an additional 6-10% to keep avoiding Wal-mart or Target or even Home Depot. There are people like me who just really hate having to suit up and go shopping. I don't like the traffic, I don't like getting ripped off, and I don't find in-store shopping a fun or magical experience like some do. I can pull up Amazon and read ratings/reviews, see what kind of problems people ran into with products, and mak…

Home Depot still gets plenty of my business. I like to buy tools online- mostly for reviews- but lumber & hardware still belong in my local warehouse (or perhaps at a boutique lumber shop on the edge of town). Same goes for many home improvement supplies.

Basically, lots of stuff requires interaction (holding a bracket or a screw in my hand to determine if it will fit) and other stuff (2x10's, 48x96's, toilets, refrigerators etc) is simply unfriendly to shipping. Home Depot of course ships wood, but they specialize in that sort of thing and ship in great bulk.

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