Beginning of the end of Amazon?

[SackAttack]

Product availability has always mattered more to me than sales tax. When I bought my PC mouse a few months ago, I'd have done it locally if it were available locally because I needed the mouse. I ordered online because nobody had the model I wanted and so the choice was something lesser now or what I wanted two days later.

[Crapshoot]

Originally Posted by sterlingice

Avoiding sales tax is the primary reason you used Amazon?

"I think you're doing it wrong"

SI

"". This is silly. Amazon is a lot more than what it appears - the entire startup infrastructure is built on AWS. Amazon will outlast most people.

[Solecismic]

Originally Posted by JPhillips

I don't know about Michigan, but in most states sales tax revenue is not dedicated to infrastructure, it just goes into the general fund.

I'm sure it is here, too. I'm more interested in the justification for taxes than the artificial means states use to store them temporarily. A state requires an infrastructure first. Without that, everything else should be on hold. A state with crumbling roads and understaffed police departments is a state that is mismanaging property taxes and income taxes as well.

To ISiddiqui, as Warhammer said, it is more efficient (infrastructure-wise) to have one delivery service delivering thousands of packages than to have thousands of people making individual trips. As such, the delivery services pay taxes through licensing and through gasoline purchases. These are passed along through delivery charges.

Also, brick-and-mortar stores are free to impose charges for looking at and/or trying out a piece of merchandise. I don't think customers would react well, but it's certainly allowed. Are customers also unfair for looking at a piece of merchandise in one store, then buying it in another physical store if it's cheaper there? Is there any implied contract when a customer looks at an item in person?

The problem here is in the efficiency of sales. Booksellers learned quickly that there were many products that are perfect for online sales (Amazon was, for a long time, viewed as pretty much only a bookstore). Borders and Barnes and Noble are/went the way of the village blacksmith. Some companies tried the same route with groceries. That doesn't work as well. A free market lets the consumer and the seller sort this out.

We talk a lot about reducing our carbon footprint through artificial means and taxation. Here we have a sales revolution that greatly reduces the carbon footprint naturally, and it actually saves us money. Yet now we want to tax it even though it reduces the need for taxes.

[molson]

So this law, if passed, would result in some big increase of driving in America? Is there a website I can bet against that?

[ISiddiqui]

Originally Posted by Solecismic

Also, brick-and-mortar stores are free to impose charges for looking at and/or trying out a piece of merchandise. I don't think customers would react well, but it's certainly allowed. Are customers also unfair for looking at a piece of merchandise in one store, then buying it in another physical store if it's cheaper there? Is there any implied contract when a customer looks at an item in person?

Hey, if you go to one store and then buy at another, you still have to pay the sales tax at the store with the lesser price . Maybe Amazon could do a price comparison for how they save state infrastructure budget more than applying a sales tax to their purchases . Like stated, most people will still drive to stores to look at things - or will stop at a store on their way from work, adding little if any infrastructure cost to their daily commute.

If it makes you feel better, you can consider it a state toll for the privilege of using the state's road system. A usage fee, if you will.

We talk a lot about reducing our carbon footprint through artificial means and taxation. Here we have a sales revolution that greatly reduces the carbon footprint naturally, and it actually saves us money. Yet now we want to tax it even though it reduces the need for taxes.

Does it in the long run? Amazon gets a comparative benefit from being able to charge no state sales tax. Say brick & mortar stores go out of business, thereby eliminating their sales tax revenue. All of a sudden you end up with substantially lesser sales tax revenue, which would be far greater than any potential infrastructure savings by having one truck hit residences.

I'm more interested in the justification for taxes

Well mostly to pay for required (as we as a society determine) services. Considering that we are all tied together and depend on other folks for commercial transactions (in a variety of different ways), being asked to pay for the benefits and privileges the state has provided is only right and just.

[Solecismic]

Originally Posted by ISiddiqui

Hey, if you go to one store and then buy at another, you still have to pay the sales tax at the store with the lesser price . Maybe Amazon could do a price comparison for how they save state infrastructure budget more than applying a sales tax to their purchases . Like stated, most people will still drive to stores to look at things - or will stop at a store on their way from work, adding little if any infrastructure cost to their daily commute.

If it makes you feel better, you can consider it a state toll for the privilege of using the state's road system. A usage fee, if you will.

A lot of this is very vague. I tend not to buy anything at Amazon or online that I would want to see in person first.

Originally Posted by ISiddiqui

Does it in the long run? Amazon gets a comparative benefit from being able to charge no state sales tax. Say brick & mortar stores go out of business, thereby eliminating their sales tax revenue. All of a sudden you end up with substantially lesser sales tax revenue, which would be far greater than any potential infrastructure savings by having one truck hit residences.

This assumes that no brick-and-mortar store replaces the one that failed because it kept trying to sell things that were better sold online.

Originally Posted by ISiddiqui

Well mostly to pay for required (as we as a society determine) services. Considering that we are all tied together and depend on other folks for commercial transactions (in a variety of different ways), being asked to pay for the benefits and privileges the state has provided is only right and just.

And we do. The first question is how much is fair. The second question is whether we should demand that our legislators stop spending so much.

[ISiddiqui]

Originally Posted by Solecismic

A lot of this is very vague. I tend not to buy anything at Amazon or online that I would want to see in person first.

This is all anecdotal (from both sides), but, there is a reason that the Amazon app has a barcode scanner on it .

This assumes that no brick-and-mortar store replaces the one that failed because it kept trying to sell things that were better sold online.

Is it really "better sold online" if they are selling at a comparative disadvantage? It is akin to saying that people buying goods from a country that has a lower tax burden is better made in that country - it could just be that those companies have to spend less due to the laws there (isn't this a concern about goods made in China?).

And we do. The first question is how much is fair. The second question is whether we should demand that our legislators stop spending so much.

As for the 1st question it is more than "how much" is fair but rather what is considered fair treatment or similarly situated companies.

[thesloppy]

Come on up to Oregon, and never pay sales tax or pump your own gas again, it's Utopia (please ignore our crushing income, business and property tax rates)!

[JonInMiddleGA]

Originally Posted by Solecismic

Mostly, as I said, it's troubling that so many people welcome more taxation. Instead, we should be insisting that governments stop wasting so much of our money.

This, a gazillion times this.

[Raiders Army]

From what I've read, Amazon has to charge taxes in more states because they are growing their physical presence in many areas. It only makes sense for them to level the playing field so that all online retailers have to charge tax. Well, not all. I think it was businesses grossing over $1M a year. In any case as kcchief pointed out they will make even more money charging businesses to take care of their taxes.

[finketr]

Originally Posted by thesloppy

Come on up to Oregon, and never pay sales tax or pump your own gas again, it's Utopia (please ignore our crushing income, business and property tax rates)!

Live in Washington, Shop in Oregon!

[thesloppy]

Originally Posted by finketr

Live in Washington, Shop in Oregon!

Slightly back on topic, though based on similar thinking, do online purchases charge taxes based on the location of the billing address, or the shipping address? Either way, I wonder if there's a possibility for third-party gaming of the system there...a CC company or middleman that will somehow bill to a different state, or a 'fulfillment' company that would receive your item in one state (possibly even in only some 'virtual' manner), then ship to your home? Probably not worth the effort in 99% of cases, but there are always exceptions.

[RainMaker]

Originally Posted by ISiddiqui

Does it in the long run? Amazon gets a comparative benefit from being able to charge no state sales tax. Say brick & mortar stores go out of business, thereby eliminating their sales tax revenue. All of a sudden you end up with substantially lesser sales tax revenue, which would be far greater than any potential infrastructure savings by having one truck hit residences.

Why should they be collecting sales tax for a state they don't operate in?

As for competitive advantages, I don't remember brick & mortar stores having the expense of having to ship products cross country. It seems like a lot of crying from businesses who failed to adapt.

[Galaxy]

Originally Posted by finketr

Live in Washington, Shop in Oregon!

No income or capital gains taxes in Washington. Sounds like the best of both worlds.

[ISiddiqui]

Originally Posted by RainMaker

Why should they be collecting sales tax for a state they don't operate in?

The buyer purchases the product from his home state. Amazon ships the product to that state, over the roads of that state. How are they not operating in that state again?

As for competitive advantages, I don't remember brick & mortar stores having the expense of having to ship products cross country.

How exactly do you think they get their products?

[CU Tiger]

Originally Posted by ISiddiqui

The buyer purchases the product from his home state. Amazon ships the product to that state, over the roads of that state. How are they not operating in that state again?



How exactly do you think they get their products?

No...amazon pays fed ex who drives in the state...

[ISiddiqui]

So how does the person purchase it. Amazon pays Comcast to provide me with internet service?

I'm not entirely sure saying that internet companies don't operate in states where people buy products from that site and the companies ship to folks in that state makes much sense at all.

For example, what the difference between my purchase of an item from Amazon and someone who lives in Washington state (where Amazon's HQ is)? Aside from potentially getting it slightly faster.

[thesloppy]

Originally Posted by Galaxy

No income or capital gains taxes in Washington. Sounds like the best of both worlds.

There's a ton of people that do this, 'cuz (most folks outside the area might not realize how much) Portland is literally right on top of the Washington border, so Washingtonians just have to cross the border to get to the great majority of Oregon's tax-free resources. Vancouver, which is Washington's 4th biggest city, is pretty much just a Portland suburb for shopping purposes...except they have cheaper houses, lovely country, way better schools and all the aforementioned tax benefits. But there's not really much industry out there either, and only so many Motor Inn or McDonald's management jobs to go around.

[RainMaker]

Originally Posted by ISiddiqui

The buyer purchases the product from his home state. Amazon ships the product to that state, over the roads of that state. How are they not operating in that state again?

How exactly do you think they get their products?

Amazon doesn't own FedEx or UPS, the people who are using the roads in those states.

This is no different than forcing a Target in Florida to have to send Georgia sales tax for every Georgia resident who crosses the border to buy something.

[RainMaker]

And here's my gripe. The competitive advantage talking point being passed around is bullshit. Look at what it costs to ship products. To pack and send something UPS to a residential address will cost a business over $10 (obviously larger ones get better deals). Credit card processing fees are higher because of the prevalence of online fraud. This notion that all online stores get to sell products with no costs associated to them is bullshit.

But the main reason I hate this is that it's a fucking excuse. Brick and mortar businesses are dying because of their own inability to provide a reason to shop there. Do you know why I buy electronics through Amazon over the local Best Buy? Because I can read a million reviews on their site, get all the information I need on it, maybe see a few videos, and not have some shithead push a useless warranty on me afterwards.

But Best Buy decides they don't want to pay for good employees. They'll hire people who know nothing about electronics for $9/hour over someone who knows his stuff for $20/hour. They'll piss off customers by trying to upsell them bullshit they don't need. They'll make you wait in line because opening an extra register costs them a few bucks and might hurt their stock price when quarterly statements come out.

All these brick and mortars cut corners for the past decade. They didn't pay for quality employees. Didn't innovate their service. And they treated their customers like shit. All this while online stores did the opposite. They tried to make everything as easy as possible, information easy to access, and a system that didn't try and nickel and dime them to death. And now that they won, brick and mortars cry to change the rules.

The problem with this bills it that it kills competition. It tells stores that innovation isn't worth it because the big boys will just change the rules when you start winning.

[Shkspr]

Originally Posted by RainMaker

some shithead

"How they treat the waiter is a window to the soul."

Keep your Amazon. Until you can treat a retailer with respect, you don't belong in polite society. No wonder you think they treat you rudely; you deserve it. Every day.

[RainMaker]

Originally Posted by Shkspr

"How they treat the waiter is a window to the soul."

Keep your Amazon. Until you can treat a retailer with respect, you don't belong in polite society. No wonder you think they treat you rudely; you deserve it. Every day.

I'm talking about the executives and higher ups who are pushing these scams. Not the people who are working a register, they're just doing their jobs. Not knocking anyone working retail, I did it for years and have family who do it now. They're the one's who get stuck dealing with the shit the higher ups do.

[mauchow]

Having worked at Sears...ugh, protection agreements that increased your purchase by 25%. Awful. I did just well enough on those to keep my job long enough to find a better job.

I was Sears best/worst salesman. I sold the most stuff but the least PAs to go along with them. I was truthful to my customers but in the end the crap that was PA's pushed me out.

[RainMaker]

Exactly, jobs relied on having to sell those so people would get real pushy. Not the employees fault, but it left a bad taste in people's mouths. Especially for those who bought them and later realized what a ripoff they were. But that's apparently Amazon's fault.

I do love the competitive advantage bit though. Amazon lost nearly a billion dollars last year. Walmart made $26 billion in profits. Huge competitive advantage they have there.

[Drake]

The most shocking thing I've learned in this thread is that some people actually voluntarily fill out the "use tax" portion of their state forms.

(Here's my logic: if I buy stuff out of state and pay sales tax there, then I've already fucking paid sales tax -- sometimes at a higher rate than in own state. So, if my state feels it's their right to an additional 7% of everything I spend, the onus is on them to collect that tax from the state where I vacationed, purchased by catalog, etc., etc. I paid the tax. I'm not going to pay it twice. Tax-free Amazon shopping is, obviously, the hole in my logic. On that topic, I just say, "Fuck you, state of Indiana. You can suck your tax dollars from my cold, dead dick."[*])

That said, this won't stop me from the convenience of buying shit from Amazon while I'm at work...right up until some smart dude in Brazil or China or Russia realizes that they can become the new Amazon by blowing off the state tax until compelled by the U.S. government to do so (easily a decade, maybe longer). Then I'll shop there until they get taken down, assuming shipping times and etc., are otherwise close to equal.

But that could be because I still fondly remember the days of buying dirt-cheap MP3's off Russian pirate sites back in the day where you were still *technically* paying for music from international vendors subject to different copyright laws rather than "stealing" it, and there wasn't a legal consensus yet on whether or not it could be stopped.

In any event, I'm an American and most of the shit I own was made in the third world by child laborers who will die young after miserable lives of poverty and bare subsistence so I can have $10 t-shirts with funny logos on them. Fuck taxes, economic models, the rich getting richer, the glad-handing of politicians who are in bed with big business, the monetization of Sesame Street, companies who make shitty video games, and the New York Yankees.

I don't care where it comes from as long as it's disposable-quality cheap, will end up in a landfill one day, and I got an extra 7% off.










* Not an actual quote.

[ISiddiqui]

Originally Posted by RainMaker

Amazon doesn't own FedEx or UPS, the people who are using the roads in those states.

This is no different than forcing a Target in Florida to have to send Georgia sales tax for every Georgia resident who crosses the border to buy something.

Once again, where are you buying the product from? Where is it going to? Why shouldn't you have to pay the sales tax in the state where the purchase is happening? You aren't physically going to another state to buy things off Amazon.

Originally Posted by RainMaker

And here's my gripe. The competitive advantage talking point being passed around is bullshit. Look at what it costs to ship products. To pack and send something UPS to a residential address will cost a business over $10 (obviously larger ones get better deals). Credit card processing fees are higher because of the prevalence of online fraud. This notion that all online stores get to sell products with no costs associated to them is bullshit.

So why is it that Barnes & Noble online prices are less than their store prices if the costs are the same?

No one said "no costs" - that's your strawman, but they have to take into account lesser costs and one of those is in one the customer has to pay sales tax. In the other, the customer doesn't. So one basically gets to report a lower price if it offers the same item at the same retail price.

[ISiddiqui]

Originally Posted by RainMaker

I do love the competitive advantage bit though. Amazon lost nearly a billion dollars last year. Walmart made $26 billion in profits. Huge competitive advantage they have there.

You realize that most of Amazon's losses are due to the fact that they are selling Kindles at a loss, right? Also Amazon bought LivingSocial last year, which cost them quite a bit of cash (and LS isn't make them much at the moment).

As for Walmart, its the most profitable business in the world. What a comparison .

[Tekneek]

Originally Posted by Swaggs

At the same time, I think it is only fair that e-stores have the same taxes that brick and mortars do (and I still do the vast majority of my shopping at brick and mortars).

Is taxation supposed to be about equality? Maybe we should set all taxes so that everything is equal.

If Amazon, or any out-of-state business, is required to collect taxes for your local municipality, then your local government should have to compensate them for the administrative costs related to that. It is obviously part of the deal for local operations to collect it. They knew that when they went into business. An out-of-state business didn't sign on to do that work and derives no benefit from it. I'm against it.

[JPhillips]

Then Amazon or any other company can decide not to sell products in that state.

[Tekneek]

Originally Posted by JPhillips

Then Amazon or any other company can decide not to sell products in that state.

A bigger problem than the state level is the fact that in some states the tax rates are different based on county and even city limits. It's unreasonable that this burden should be placed on an out-of-state business to comply with that. A local business doesn't have to deal with resolving a large array of possible sales tax rates based on where you live. It is only based on where they exist. This is a burden that local brick-and-mortar don't have to deal with.

[ISiddiqui]

Originally Posted by Tekneek

Is taxation supposed to be about equality?

Partially, yes. After all, don't you hear a lot about everyone should pay their "fair share" - we have disputes over what is fair, but fair taxation implies similarly situated people get hit up equally.

[Tekneek]

Originally Posted by ISiddiqui

Partially, yes. After all, don't you hear a lot about everyone should pay their "fair share" - we have disputes over what is fair, but fair taxation implies similarly situated people get hit up equally.

But are they similarly situated? Local brick-and-mortar collects sales tax based on where they reside, not where the buyer resides. Until they all collect sales tax based on residence of the buyer, I am not buying how this levels the playing field.

[ISiddiqui]

They are both Retailers. Unless you would rather that Amazon has to pay sales tax on every transaction it makes to Washington State . On the other hand, the transactions are being done in the buyers' state, since the buyer is purchasing the good while in his/her state.

However, it appears you happen to be in the minority. As said fairness is usually disputed, but it appears that more folks believe it is fair to treat online retailers like brick and mortar stores in sales tax / use tax issues. Hence the bill.

[Tekneek]

Originally Posted by ISiddiqui

They are both Retailers. Unless you would rather that Amazon has to pay sales tax on every transaction it makes to Washington State .

That makes more sense than giving them the burden of determining the tax rate in my local jurisdiction. I also doubt there would be as much of a push for this if it went down like that.

However, it appears you happen to be in the minority. As said fairness is usually disputed, but it appears that more folks believe it is fair to treat online retailers like brick and mortar stores in sales tax / use tax issues.

Maybe so, but just because the majority agrees to do something does not make it right. There's a long list of wrongs in this world that some majority was once in agreement on.

[JonInMiddleGA]

Originally Posted by Tekneek

A bigger problem than the state level is the fact that in some states the tax rates are different based on county and even city limits. It's unreasonable that this burden should be placed on an out-of-state business to comply with that. A local business doesn't have to deal with resolving a large array of possible sales tax rates based on where you live. It is only based on where they exist. This is a burden that local brick-and-mortar don't have to deal with.

Well, they do if they're the local pizza joint that happens to have two locations on different sides of a county line. Of course the diff still exists on having to program each register only once depending upon the location but to some extent the issue does come up.

But let's be honest, this bill has nothing to do with "fairness" or "competition" or anything else. This is about nothing more than government wanting a crack at getting its hands on more money.

[ISiddiqui]

Originally Posted by Tekneek

That makes more sense than giving them the burden of determining the tax rate in my local jurisdiction. I also doubt there would be as much of a push for this if it went down like that.

You realize computers are these wonderful things that can calculate rates very easily, right?

[ISiddiqui]

Originally Posted by JonInMiddleGA

But let's be honest, this bill has nothing to do with "fairness" or "competition" or anything else. This is about nothing more than government wanting a crack at getting its hands on more money.

Technically, the federal government wouldn't be getting a dime of more money if the states can charge more sales tax to online sellers.

[Tekneek]

Originally Posted by ISiddiqui

You realize computers are these wonderful things that can calculate rates very easily, right?

Sure, even I can calculate the rates very easily. What I can't do very easily is research all of them, based on every street address in the country, charge that, collect that, and then submit that. Why should such a material change to their business be pushed onto them with no compensation? Let them collect it based on the location of each distribution point that each product is shipped to the customer from. Amazon easily has this data and can set it once per shipping point (adjusting whenever the local community changes it, which will be unlikely to happen often since they'll be rapidly increasing revenue).

Originally Posted by JonInMiddleGA

Well, they do if they're the local pizza joint that happens to have two locations on different sides of a county line. Of course the diff still exists on having to program each register only once depending upon the location but to some extent the issue does come up.

A better comparison would be pizza delivery. If I order a pizza delivery from another county, do they charge me sales tax for the delivery address or their address? In my state, it is charged based on the location of the pizza place. Not mine. There are a lot of problems with going down this rabbit hole and they don't sound good to me.

[JPhillips]

Keep in mind that for years on-line retailers have argued that their physical location for order processing can't be taxed because the sale happens in whatever state the purchaser lives in.

They can't have it both ways.

[molson]

Originally Posted by JPhillips

They can't have it both ways.

When it comes to taxes, they often do.

[ISiddiqui]

Originally Posted by JPhillips

Keep in mind that for years on-line retailers have argued that their physical location for order processing can't be taxed because the sale happens in whatever state the purchaser lives in.

They can't have it both ways.

Bingo.

As for saying a business should be compensated for a law making a material change to their business, LOL! One of the costs of doing business is realizing there is a risk that a government entity could sweep the rug out from under you if you are doing something that seems too good to be true (such as avoiding all sales taxes).

[Tekneek]

Originally Posted by JPhillips

They can't have it both ways.

Unless there is a legal precedent on that, they can argue whatever they want when it is convenient or legally expedient to do so. Why can't they argue for whatever position helps them the most?

[Tekneek]

Originally Posted by ISiddiqui

As for saying a business should be compensated for a law making a material change to their business, LOL! One of the costs of doing business is realizing there is a risk that a government entity could sweep the rug out from under you if you are doing something that seems too good to be true (such as avoiding all sales taxes).

Yes, but I happen to think it is wrong. Let's decide if we're going to charge sales tax based on location of seller or location of buyer (or location of shipment origin) and make it that way across the board. I would be more supportive if this meant the same thing for all retailers.

[ISiddiqui]

Originally Posted by Tekneek

Unless there is a legal precedent on that, they can argue whatever they want when it is convenient or legally expedient to do so. Why can't they argue for whatever position helps them the most?

Because when it comes around to that argument harming them, no one is going to listen to them when they go back on it. Basically they've screwed themselves by arguing that way because people are naturally going to say, we'll that's what you've been arguing, so you get it.

Originally Posted by Tekneek

Yes, but I happen to think it is wrong. Let's decide if we're going to charge sales tax based on location of seller or location of buyer (or location of shipment origin) and make it that way across the board. I would be more supportive if this meant the same thing for all retailers.

How about location of the transaction? That makes the most sense.

[JonInMiddleGA]

Originally Posted by ISiddiqui

Technically, the federal government wouldn't be getting a dime of more money if the states can charge more sales tax to online sellers.

This is called throwing the states a bone.

[ISiddiqui]

Like the Feds care anything about the states, Jon

[Tekneek]

Originally Posted by ISiddiqui

How about location of the transaction? That makes the most sense.

Then we're getting into a discussion about where the webservers are located, aren't we?

[ISiddiqui]

As stated above:

Keep in mind that for years on-line retailers have argued that their physical location for order processing can't be taxed because the sale happens in whatever state the purchaser lives in.

We'll go with the retailers' argument - the state where the purchaser lives. After all, that is where the buyer decides to purchase what the seller is offering.

[JonInMiddleGA]

Originally Posted by Tekneek

A better comparison would be pizza delivery. If I order a pizza delivery from another county, do they charge me sales tax for the delivery address or their address? In my state, it is charged based on the location of the pizza place. Not mine. There are a lot of problems with going down this rabbit hole and they don't sound good to me.

I was focused on the fact that b&m businesses do have to deal with multiple rates. I just grabbed the simplest b&m example I could think of.

FTR, I'm entirely opposed to the new measure - regardless of what rate is used - ... unless of course they'll use the windfall to roll back other existing rates by at least an equivalent amount. (sorry, not holding my breath on that one )

[JonInMiddleGA]

Originally Posted by ISiddiqui

Like the Feds care anything about the states, Jon

Hey, they have to get tired of hearing them whine, same as the rest of us