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Amazon Terminates Illinois Affiliates

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Re: Amazon Terminates Illinois Affiliates

#91
post #26

Earlier quoted context omitted.

Here is an explanation. Residents of Illinois owe sales tax on their purchases. The state knows that people won't choose to pay this, so the state makes merchants collect the tax. If the merchants are based in the state, the courts say the state can do this. If the merchants are not based in the state, then the courts have ruled this to be interstate commerce, which is something that only the federal government has p…

Amazon sells Item X for $19.99. An Illinois retailer sells the same Item X, also for $19.99. Your claim is that the buyer will purchase from Amazon because there is no sales tax: Amazon: $19.99 Retailer: $21.24 Except, the item must be shipped from Amazon to the customer. If customer pays shipping, then: Amazon: $24.99 Retailer: $21.24 If Amazon pays the shipping, then the shipping costs must be deducted from their p…

You forget that the retailer has several additional costs that you have not considered. The warehouse retailer has to transport goods, run the store, and (very importantly) has to maintain much higher stocks of each product in their stores to guarantee that, no matter which store a customer goes to, the popular item is present. (Do not underestimate the value of this factor. Volume retailers of all kinds are incredibly focused on reducing the turnaround time from when goods are purchased to profits realized from the sale.)

On the whole the advantage is definitely with Amazon, as can be verified from the prices for end consumers.

Now we get the question of fairness. People often argue about fairness as if it was an absolute fact. It is not. Fairness is a subjective opinion. Rather than trying to argue about what is fair or not fair, the best you can do is to try to understand other people's point of view.

There is a point of view from which Amazon is inducing Illinois residents to break Illinois law, and spend their money in a way that creates no Illinois jobs. Every piece of this hurts Illinois, and is not fair to companies that are forced to abide by Illinois law. You clearly do not share this point of view, but is it that hard to accept this mindset?

By contrast your point of view seems to be that Amazon is obeying US law, and it isn't Amazon's problem if Illinois wishes to foist stupid rules on its people that the people don't want to follow. That's a fair opinion, but having that opinion should not prevent you from understanding that there are other points of view out there.

Re: Amazon Terminates Illinois Affiliates

#92
post #77

Earlier quoted context omitted.

That's because California has tax-hungry laws concerning what defines a "nexus" (a business's presence in the state). It's difficult for many companies to avoid creating a California presence, so they're stuck collecting California sales tax as if they were based there.

Doesn't every state have similar laws? Indiana does - yet I don't normally pay sales tax online, because most of the companies aren't based in Indiana, whereas online companies really do tend to be in California.

Lots of states, but not every state. California is also of particular importance because it's so big: nobody would care as much if Delaware had laws like this.

However, in California, even if you only have a physical presence in some remote part of northern CA, suddenly that affects your ability to sell to 37 million other people.

Re: Amazon Terminates Illinois Affiliates

#93
post #91

Earlier quoted context omitted.

Amazon sells Item X for $19.99. An Illinois retailer sells the same Item X, also for $19.99. Your claim is that the buyer will purchase from Amazon because there is no sales tax: Amazon: $19.99 Retailer: $21.24 Except, the item must be shipped from Amazon to the customer. If customer pays shipping, then: Amazon: $24.99 Retailer: $21.24 If Amazon pays the shipping, then the shipping costs must be deducted from their p…

You forget that the retailer has several additional costs that you have not considered. The warehouse retailer has to transport goods, run the store, and (very importantly) has to maintain much higher stocks of each product in their stores to guarantee that, no matter which store a customer goes to, the popular item is present. (Do not underestimate the value of this factor. Volume retailers of all kinds are incredib…

That's actually not my opinion at all, but I don't know how to state my opinion any more clearly than I already have.

Re: Amazon Terminates Illinois Affiliates

#94

Earlier quoted context omitted.

> Amazon is receiving an unfair competitive advantage by not paying taxes... I don't understand this reasoning. They have to pay a shipping tax -- that is, regardless of the price of the item, the buyer is going to have to have it shipped to their home. If Amazon's offering free shipping, that just means they're choosing to absorb the cost, which eliminates a competitive advantage; if the buyer pays shipping, then th…

> They have to pay a shipping tax ... that eliminates Amazon's competitive advantage. Not really because Illinois based businesses have to ship their goods into the state as well and then have their customers pay Illinois sales tax on top of the shipping cost reflected in the sales markup.

Those costs are usually absorbed by the wholesaler, not the retailer.
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