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Amazon Supports Internet Sales Tax (What the...?)

- By - Source : Wall Street Journal

This is the sound of someone trying to turn inevitability into inevitabilty-ade

Though Internet-based businesses have long resisted calls to require sales tax on online transactions, Amazon.com has all but accepted that the tide is turning inexorably. At a congressional hearing discussing the proposed Marketplace Fairness Act, Amazon global public policy VP Paul Misener said the company "strongly supports" the establishment of a consistent national sales tax framework," indicating Amazon's preference for "an even-handed federal framework for state sales tax collection". He added that "Congress -- and only Congress -- may, should and feasibly can authorize states to require out-of-state sellers to collect the sales tax already owed."

The Marketplace Fairness act seeks to get around restrictions imposed by the 1992 U.S. Supreme Court decision, Quill Corp. v. North Dakota. That decision held that mail-order retailers are not required to collect use taxes due to the complexity of doing so. Though the decision did not specifically deal with sales taxes (different from use taxes), it has long been interpreted to do so, the result being that states have largely been unable to charge sales taxes for online sales. Though online businesses have typically framed their opposition to sales taxes as due to bookkeeping nightmares that would result from calculating costs on a state-by-state basis, the competitive advantage online businesses have over brick and mortar stores forced to charge sales taxes is another reason for their resistance.

Amazon's show of support for a national standard would appear to be tacit acknowledgment that the question of imposing sales taxes on online businesses is a matter of 'when', not 'if'. Getting out in front of that tide ensures the best possible deal for affected businesses. Consumers will have to decide for themselves if ordering goods online is more convenient than shopping in a physical location.

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itchyisvegeta 12/01/2011 10:07 PM
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Not surprised. It would choke out any little growing competator they may have. Reminded me of a radio tax hike that went in effect, that the radio companies were in favor of, way back when internet radio first started popping up.

burnley14 12/01/2011 10:08 PM
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No sales tax and convenience are the reasons I shop online. Nothing is inevitable, Amazon, there's no reason to resign yourself to something unfavorable. It sounds like something else must be going on or else Amazon is simply content with cutting into their profits, either of which is stupid.

lunyone 12/01/2011 10:08 PM
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Well living in a non-sales tax state, would this mean that I would have to pay a tax for using an online vendor over going to a local store and not paying a sales tax?

intel4eva 12/01/2011 10:09 PM
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trying to put the internet cat back in the bag, eh?

baddad 12/01/2011 10:35 PM
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Why would I shop on line anymore if there's a sales tax.

klavis 12/01/2011 10:44 PM
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I really don't like the idea of a national sales tax. I live in a state where we don't have a sales tax, and to have one forced upon us is a pleasant thought. I can see how it would be easier for Amazon to deal with this issue though.

otacon72 12/01/2011 10:45 PM
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baddad :
Why would I shop on line anymore if there's a sales tax.



That's why I live in Massachusetts and shop in New Hampshire..lol

NuclearShadow 12/01/2011 10:46 PM
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If this happens I will find little reason to buy online anymore unless retailers cut prices to at-least match the taxes which of course isn't going to happen. There is a chance I already may have to pay for shipping, and have to wait for the product to come to my door. Returns are always a hassle if the product is defective in anyway and make everything even more costly and takes more time. There would be no benefit to shopping online if taxes apply.

Proxy711 12/01/2011 10:49 PM
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baddad :
Why would I shop on line anymore if there's a sales tax.


Because online offers more products then shops locally and its more convenient? I'm sure i could list many other reasons if I took the time to.

phishy714 12/01/2011 10:50 PM
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Well.. there is always the huge convenience factor of being able to shop online over brick and mortar stores. I would gladly buy a video card or motherboard from Newegg instead of freaking going to best buy in HOPES that I find one. Hell, the fact that I can look at everything from the comfort of my home and not have to leave it to go get something miles away is enough for me to stick with online shopping. The no sales tax thing was just a nice little bonus.

Anonymous 12/01/2011 10:55 PM
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If everyone followed the laws that govern their state, this Act would affect absolutely NOTHING.

The thing people have to realize is that most states require you to pay taxes on all purchases made in that state, INCLUDING online purchases (yes, you are making a purchase in a state if the computer you're using is within state lines). States simply can't require those online retailers to COLLECT those taxes for them, like regular brick and mortar stores have to do. People are supposed to report the value of online purchases in their state tax forms every year and then pay the corresponding tax on them. Of course, hardly anyone does this, which is the advantage e-tailers have.. which btw IS tax evasion by their customers. And no, just because politicians do this all the time does not make "right" for the rest of us to do it.

regnineurg 12/01/2011 10:55 PM
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people will complain about it, but ultimately very few will stop shopping online as a result of this, simply because laziness/convenience (however people want to sell it to themselves) will win out over getting out of the couch/chair to actually go somewhere to shop. gogo gadget overweight america?

bildo123 12/01/2011 11:01 PM
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baddad :
Why would I shop on line anymore if there's a sales tax.



Pretty much this; unless it's free shipping or a decently amount cheaper I might as well hit the stores up. I'd probably just use Amazon for reviews at that point.

soldier37 12/01/2011 11:10 PM
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Blame the Democrats they LOVE more taxes!

wunderkinder 12/01/2011 11:12 PM
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Based on what our federal government does this will; never happen :)

lemon40 12/01/2011 11:15 PM
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Amazon has the resources to collect taxes from all the different states and localities. Smaller online retailers don't have the resources. This is simply Amazon trying to thin out the competition.

A Bad Day 12/01/2011 11:15 PM
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For example:

You're an owner of a store, there's a sales tax on your products.

The store next door doesn't have to pay sales tax, and customers are well aware of that.

Why should you sell lower in order to compete against the other store that doesn't have tax on it?

Soul_keeper 12/01/2011 11:16 PM
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amazon has had meetings with our new governor here in california ...
this is a big part of their change in stance imo
They didn't want to lose such a large market

Really a shame, all this tax money will be spent in all the wrong places on all the things us taxpayers don't want/need .... as always.

illo 12/01/2011 11:18 PM
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soldier37 :
Blame the Democrats they LOVE more taxes!



you realize that everything the US government spends money on, comes from taxes. and without taxes we dont have schools, roads, etc....

wunderkinder 12/01/2011 11:20 PM
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"Today a young man on acid realized that all matter is merely energy condensed to a slow vibration. That we are all one consciousness experiencing itself subjectively. There is no such thing as death, life is only a dream, and we are the imagination of ourselves. Here's Tom with the weather."

soo-nah-mee 12/01/2011 11:27 PM
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wunderkinder :
"Today a young man on acid realized that all matter is merely energy condensed to a slow vibration. That we are all one consciousness experiencing itself subjectively. There is no such thing as death, life is only a dream, and we are the imagination of ourselves. Here's Tom with the weather."

Thank you Mr. Hicks. You just put me in a slightly less shitty mood. :D

JamesSneed 12/01/2011 11:38 PM
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I suppose I could be for it if a national flat sales tax completely replaced the income tax. Least I would not have to file taxes every year. After googling around this seems fairly reasonable http://www.fairtax.org/site/PageServer

aaron88_7 12/01/2011 11:47 PM
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wunderkinder :
"Today a young man on acid realized that all matter is merely energy condensed to a slow vibration. That we are all one consciousness experiencing itself subjectively. There is no such thing as death, life is only a dream, and we are the imagination of ourselves. Here's Tom with the weather."


What does a Bill Hicks quote have to do with this?

Anyway, small businesses can't compete without a tax, it is an unfair advantage from a large corporation. The tax not only puts corporations such as Amazon on a more level playing field with small businesses, but it also offers much needed taxes to states that miss out due to corporations like Amazon that rely on these outdated tax laws.

This is merely fixing an out of date tax code that has been used to skirt taxes businesses are supposed to be paying.

Anonymous 12/01/2011 11:53 PM
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I had a small brick and mortar snowboard shop for about 3 years. We had to close our doors because we could not compete with any of the online retailers. we had too much overhead and even if we had a sale to match their prices we still had to charge the customer tax. I am completely against excessive taxation but in my opinion if they have to raise taxes I would prefer this one as it would help protect local retailers and merchants.

internetlad 12/02/2011 12:00 PM
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as much as people moan about sales tax, Internet based sales are booming and that means less business for brick-and-mortar stores that do charge the tax.

Everybody wants to moan about the recession, but nobody supports a tax hike. Sure, maybe the suits aren't spending everything where YOU think it should go, but still, where's this money coming from.

Taxes are a pain in the ass, but neccessary for a democratic government to succeed, especially a non-perfect one like we deal with.

cyprod 12/02/2011 12:09 PM
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I hear over and over and over "more level playing field" and stuff about eliminating cost advantage to online stores. Quick question to you brick and mortar advocates, when was the last time people had to pay shipping and handling when they bought something from a brick and mortar store? And don't shoot back "we have to pay shipping and handling to get the products to our stores" because I used to deal with trucks delivering into best buy, and I know what those shipping rates are, and I know they aren't even comparable to what consumers pay.

This is more a "we suck at what we do, so we want to put a disadvantage to online stores". And complaining about overhead of the building, this suddenly sounds like the restaurants where I live advocating against food trucks and that it wasn't fair since the trucks didn't have to pay for rent.

And need I mention that a federal sales tax is retarded. I don't know about where you guys live, but here, part of the sales tax goes to the state, part goes to the county, and part goes to the city, and none goes to the feds. The rate as such changes city to city based on how people voted for various hikes in sales tax. Explain to me exactly how this should be a federal issue? The fed should determine for each municipality what the tax rate should be I assume?

gm0n3y 12/02/2011 12:11 PM
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Here in Canada all online companies charge Provincial taxes based on where the buyer resides. I work in the IT industry (and have written point-of-sale software specifically) and its not really a big deal. Now it starts to get harder once you go beyond the state level (county, city) or if you sell many different types of products with different tax rules.

blurr91 12/02/2011 12:27 PM
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Blame California.

Look it up.

adaube 12/02/2011 12:41 PM
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Best Buy has a logistic structure that has been built to serve their network of stores. They also operate online. Using this company to construct an argument that all brick and mortar stores are able to reap the benefits of this economy of scale is false.

The majority of small business owners have the challenge of consolidating products from varied origin onto their shelves without the buying power or warehousing space of a retail mega-giant such as Best Buy. The turns of inventory needed to facilitate such infrastructure is not in reach of most brick and mortar shops.

Flip this with an online retailer who exclusively sells on the internet. Now you are almost exclusively a function of your marketing and warehouse expense, of which you can outsource much.

cybnetic 12/02/2011 12:48 PM
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If there is a internet tax then I will not buy online anymore. that's the whole idea is not paying more money or taxes. I am tired of paying to the government for nothing. of course the mainstream will take it up the ass and still shop. someone has to take a stand so I guess its me.

Zagen30 12/02/2011 1:10 AM
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regnineurg :
people will complain about it, but ultimately very few will stop shopping online as a result of this, simply because laziness/convenience (however people want to sell it to themselves) will win out over getting out of the couch/chair to actually go somewhere to shop. gogo gadget overweight america?



Some of it's laziness, but you can't deny that the range of products you can find online is much greater than what you could find in any store. A physical location is by definition limited in how much it can hold. The local Gamestop can only carry a set number of new games and some overpriced used ones, but online I can find essentially every game ever made, and much better prices on used ones (especially through Amazon Marketplace).

klavis :
I really don't like the idea of a national sales tax. I live in a state where we don't have a sales tax, and to have one forced upon us is a pleasant thought. I can see how it would be easier for Amazon to deal with this issue though.



This isn't a national sales tax, it's a way for online retailers to collect state sales tax based on which state the buyer is located. You won't be incurring sales tax if you live in a state that doesn't collect one.

cybnetic :
If there is a internet tax then I will not buy online anymore. that's the whole idea is not paying more money or taxes. I am tired of paying to the government for nothing. of course the mainstream will take it up the ass and still shop. someone has to take a stand so I guess its me.



I won't deny there's a lot of mismanagement and misappropriation of taxpayer money, but taxes are necessary for the government to actually do stuff. Without taxes, who's funding our schools, public transportation services, emergency services, etc.?