Beginning of the end of Amazon?

[mauchow]

I can't link right now but it looks as though online retailers may now be required to charge state sales tax as the senate has passed the bill to do so.

That will likely drop about 75 purchases(from over 100) a year for me that I made through amazon before.

[sterlingice]

Avoiding sales tax is the primary reason you used Amazon?

"I think you're doing it wrong"

SI

[molson]

From what I read, the federal law would only allow states to charge sales tax on online transactions. Which confuses me because, they already can and some do. I must be missing something.

[Matthean]

This will hardly make an issue for me.

[Swaggs]

We had to file a "use tax" on our state returns here anyway. Certainly won't prevent me from buying things on Amazon.

The appeal for me is that I can find exactly what I want without searching for it around town, during the hours that I want to look, and generally have it at my house two days later.

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).

[DaddyTorgo]

Originally Posted by Swaggs

The appeal for me is that I can find exactly what I want without searching for it around town, during the hours that I want to look, and generally have it at my house two days later.

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).

This.

[QuikSand]

First of all... the senate doesn't get the final say. On anything. So, this action isn't the end.

Second... while not having anyone collect the taxes (technically, the ones you are supposed to be paying anyway) is a nice benefit... is the real advantage of shopping from a place like Amazon the 5-8% tax break? You're really going to drive to the mall or shopping center and shut down the majority of your online purchases now? I'm open to this being a partially accurate answer for some people, but I really don't think the actions will speak as loudly as the words.

Say if I'm looking at a fairly substantial purchase... say a piece of audio equipment, for $200. Right now, buying online and not paying sales tax saves me $12. Assuming the prices (including shipping) are identical (rarely true I think, as online vendors tend to kill the in-house ones) and now the tax is identical... I still am going to buy online or via catalog nearly 100% of the time. If this is the only thing I'm buying, you probably have to give me a $20 price break to get me to drive, park, walk, and wait at Best Buy or somesuch.

For a customer like me, online vendors collecting sales taxes basically whittles their current HUGE advantage down to just a very large one. They are still way, way ahead of brick and mortar joints anywhere that competition is relevant. I think there are a lot of people with me on this.

[Lathum]

I use Amazon a lot and never once considered sales tax. I use it because there is a huge selection, the reviews are usually accurate, and I am a Prime member so I get free 2 day shipping. When I lived in Seattle if I bought something in the morning it would often be at my house later that day. If it is a gift it can be mailed directly to the recipient. It is a no brainer.

Trust me when I say Amazon isn't going anywhere. Visit Seattle and take a stroll through South Lake Union and you'll see what I mean.

This is in addition to the huge campus there already.

Amazon Buying 3 City Blocks of Real Estate in Seattle’s Denny Triangle – 1 Million Sq Ft Office Towers To Come | Seattle Waterfront Homes - seattlepi.com

[kcchief19]

Originally Posted by molson

From what I read, the federal law would only allow states to charge sales tax on online transactions. Which confuses me because, they already can and some do. I must be missing something.

The streamlined sales agreement between some states really complicated things. I believe Amazon may have already been required to collect sales tax on shipments in and to states where they have a physical presence such as a distribution center. The streamline sales tax and Marketplace Fairness Act are the biggest misnomers in tax policy, and that's saying something.

Amazon can't be too concerned about it since they are supporting the measure. At this point they are large enough and their pricing competitive enough that they will still have a competitive advantage against almost all local retailers -- if there are any left -- and this will help keep upstarts out of the market.

ebay is the bigger threat. This will be an eBay nightmare.

[ISiddiqui]

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

Yep. Totally agree. It really isn't fair to brick and mortar stores that they have to charge a tax that Amazon can avoid.

Furthermore, Amazon, due to its size (economies of scale) tends to have cheaper products than brick and mortar stores, so they'll be fine.

[mauchow]

On diapers alone we saved about $60/year being tax free.. now we'll save the difference in prices which will amount to about $20 a year. Now granted this is just one of the many items that I saved a lot of money on. Hearing aid batteries. Regular batteries. Wipes. It all added up to more than a few hundred dollars in savings. As mentioned it will definitely cut back a lot of my spending needs that I directed at amazon for this reason alone. If the price was the same on amazon as target/walmart/home depot etc I'd get it on amazon for sure.

Now that the playing field is even more of the purchases will be made in person....

Maybe it won't deter me when and if the time comes... just my intial reaction I guess.

[The Jackal]

Time to get out a spreadsheet and compare gas prices to Amazon sales tax?

[cuervo72]

Originally Posted by QuikSand

I think there are a lot of people with me on this.

Completely with Quik on this one.

[Izulde]

Originally Posted by Swaggs

We had to file a "use tax" on our state returns here anyway. Certainly won't prevent me from buying things on Amazon.

The appeal for me is that I can find exactly what I want without searching for it around town, during the hours that I want to look, and generally have it at my house two days later.

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).

Yep. This here, except the use tax part.

[Ben E Lou]

Originally Posted by cuervo72

Completely with Quik on this one.

[Matthean]

Originally Posted by mauchow

On diapers alone we saved about $60/year being tax free.. now we'll save the difference in prices which will amount to about $20 a year...If the price was the same on amazon as target/walmart/home depot etc I'd get it on amazon for sure.

So you'll still be buying from Amazon it just means that you won't save as much. In other words, yay Amazon.

[Swaggs]

Originally Posted by mauchow

On diapers alone we saved about $60/year being tax free.. now we'll save the difference in prices which will amount to about $20 a year. Now granted this is just one of the many items that I saved a lot of money on. Hearing aid batteries. Regular batteries. Wipes. It all added up to more than a few hundred dollars in savings. As mentioned it will definitely cut back a lot of my spending needs that I directed at amazon for this reason alone. If the price was the same on amazon as target/walmart/home depot etc I'd get it on amazon for sure.

Now that the playing field is even more of the purchases will be made in person....

Maybe it won't deter me when and if the time comes... just my intial reaction I guess.

If it makes you feel any better, it looks like Wisconsin was already a use tax state: Use Tax Commonly Asked Questions - Wisconsin Department of Revenue

So, it looks like you should have been tracking, reporting, and paying 5%+ on your income taxes already (or filing a quarterly consumer tax return). I would assume that the new law will likely put the onus on businesses and make life easier on the consumers who have had to track and calculate it themselves.

[lighthousekeeper]

Originally Posted by Swaggs

We had to file a "use tax" on our state returns here anyway.

[PilotMan]

Amazon already has to charge tax in states where they have warehouses or shipping facilities. That has to be a fair number of states right now. Kentucky is one of those places, it doesn't affect me at all.

[sterlingice]

Originally Posted by kcchief19

ebay is the bigger threat. This will be an eBay nightmare.

And Amazon marketplace, etc. There are a ton of middleman resellers on the net who gets sells A, which box store sells normally for $10. They find it for 50% off at a $5 and then sell it for $8 on ebay or Amazon. Or they buy it at the same $5 wholesale price and mark it up to sell online with lower overhead. It's not even fair to call it a closet industry or subculture as I don't think either do its scope justice.

SI

[sterlingice]

Any Europeans with a VAT laughing hysterically about the "uproar" about this? Then again, there's a good chance it doesn't survive the House.

SI

[Young Drachma]

When you live in the middle of nowhere, the choice between 'Amazon tomorrow' or "drive several hours today" is an easy nod toward Amazon almost every time.

[Alan T]

Honestly, I would still use Amazon even if it cost more than physical stores because I just hate going to stores, hate dealing with sales people and hate dealing with other customers, and parking and traffic , etc.

The only time I buy anything in person at stores is generally something that I want to see/try on or whatever before I buy it. Or a place that also provides some form of service in addition to the purchase.

Having to pay sales tax on online purchases is so far down the radar for me that I can't even begin to care.

[Logan]

They've been charging sales tax in NY for at least a couple years now. Back when it happened, there was a lot of the same reaction...but of course, their prices are still better, the service is better, the convenience is better, etc. I buy just as much from Amazon as I did then and don't complain about it.

[DanGarion]

They have been charging sales tax in California for over a year now on Amazon, it hasn't deterred me one bit since most things are cheaper on Amazon anyway.

[molson]

I haven't seen a number yet but this would be a pretty huge windfall for state governments, right? Though, one thing I don't quite understand yet, is would states be required to opt-in with their own legislation to actually collect this tax? Or would Amazon just be required to collect it, then they'd send the check? I know in Idaho we've had proposed internet sales tax legislation in the past but it's always died a horrible death. Would the state be required to pass some kind of legislation for this to have any effect?

[Young Drachma]

"Windfall"

[Galaxy]

Amazon seems to be cheaper on a lot stuff than the stores.

Amazon has seen this coming for years. That's why they are ramping up their distribution centers-rying to get into the same-day/short delivery approach, investing in Amazon Web Services, tablets, and so on. Not to mention they usually have excellent customer service.

[mckerney]

Originally Posted by Galaxy

Amazon seems to be cheaper on a lot stuff than the stores.

Amazon has seen this coming for years. That's why they are ramping up their distribution centers-rying to get into the same-day/short delivery approach, investing in Amazon Web Services, tablets, and so on. Not to mention they usually have excellent customer service.

I believe they've also been investing in a web payment service to sell to third parties to easily comply with state and local sales taxes on out of state transactions so they'll probably see a decent windfall there if it passes.

Most the things I buy on Amazon will still be cheaper than buying locally even with sales tax (and that's if I can even find it in a nearby brick and mortar) so it won't change my shopping habits at all.

[Passacaglia]

Originally Posted by mauchow

On diapers alone we saved about $60/year being tax free.. now we'll save the difference in prices which will amount to about $20 a year. Now granted this is just one of the many items that I saved a lot of money on. Hearing aid batteries. Regular batteries. Wipes. It all added up to more than a few hundred dollars in savings. As mentioned it will definitely cut back a lot of my spending needs that I directed at amazon for this reason alone. If the price was the same on amazon as target/walmart/home depot etc I'd get it on amazon for sure.

Now that the playing field is even more of the purchases will be made in person....

Maybe it won't deter me when and if the time comes... just my intial reaction I guess.

Do you use subscribe and save? That's some good money savings there. Plus, it's pretty awesome to have the diapers (and wipes and genie refills) just arrive without having to think about it.

[mckerney]

Amazon's Billion-Dollar Payday Nearing Thanks To Marketplace Fairness Act - Seeking Alpha

According to Internet Retailer magazine, Amazon will offer to handle the sales tax collection process for its third-party merchants in exchange for 2.9% of the tax collected. This means that Amazon has created a money printing machine. Amazon's new offer is aimed at hundreds of thousands of independent U.S. businesses, ranging in size from tiny used-book sellers to major manufacturers that sell their products through the Amazon.com site.

More online retailers well end up using Amazon's payment system and Amazon will make more of those transactions. Sounds like it could work pretty well for them.

[Galaxy]

Originally Posted by mckerney

I believe they've also been investing in a web payment service to sell to third parties to easily comply with state and local sales taxes on out of state transactions so they'll probably see a decent windfall there if it passes.

Most the things I buy on Amazon will still be cheaper than buying locally even with sales tax (and that's if I can even find it in a nearby brick and mortar) so it won't change my shopping habits at all.

I buy physical, traditional books through Amazon, and they are usually 20-40% than Barnes and Nobles, not counting the sales tax.

[JPhillips]

I heard this only applied to retailers with more than a million in sales. Will Amazon's plan really be such a windfall?

[molson]

Originally Posted by JPhillips

I heard this only applied to retailers with more than a million in sales. Will Amazon's plan really be such a windfall?

So Amazon wouldn't have to collect the tax when a third-party smaller seller is involved?

As for the windfall, Amazon alone generates $60 billion in revenue a year or something, I'd figure they'd be collecting a decent amount of sales tax. Though I did just read that California projected $1.9 billion a year in sales tax revenue when they passed their law, and they ended up with $100 million, so there's obviously some disconnect about how this actually works.

[AENeuman]

Originally Posted by mauchow

On diapers alone we saved about $60/year being tax free.. now we'll save the difference in prices which will amount to about $20 a year. Now granted this is just one of the many items that I saved a lot of money on. Hearing aid batteries. Regular batteries. Wipes. It all added up to more than a few hundred dollars in savings. As mentioned it will definitely cut back a lot of my spending needs that I directed at amazon for this reason alone. If the price was the same on amazon as target/walmart/home depot etc I'd get it on amazon for sure.

Now that the playing field is even more of the purchases will be made in person....

Maybe it won't deter me when and if the time comes... just my intial reaction I guess.

Never thought of using Amazon as a substitute for CVS... guess that's why they are so successful

[Lathum]

Originally Posted by Passacaglia

Do you use subscribe and save? That's some good money savings there. Plus, it's pretty awesome to have the diapers (and wipes and genie refills) just arrive without having to think about it.

we do this and it works great. We do Costco for wipes because it is cheaper, otherwise it is Amazon

[mckerney]

Originally Posted by molson

So Amazon wouldn't have to collect the tax when a third-party smaller seller is involved?

As for the windfall, Amazon alone generates $60 billion in revenue a year or something, I'd figure they'd be collecting a decent amount of sales tax. Though I did just read that California projected $1.9 billion a year in sales tax revenue when they passed their law, and they ended up with $100 million, so there's obviously some disconnect about how this actually works.

Amazon will do much better if there's no minimum for it. Anyone on the Amazon marketplace would probably have to pay, but if everyone has to do it there will probably be quite a few stores that just sell off their own site that would switch from their merchant processor to Amazon for the ease of sales tax collection.

[Ryan S]

Originally Posted by mauchow

I can't link right now but it looks as though online retailers may now be required to charge state sales tax as the senate has passed the bill to do so.

That will likely drop about 75 purchases(from over 100) a year for me that I made through amazon before.

Is this really going to make a big difference?

In the UK we pay a 20% sales tax online and in store (and the prices you see always include tax). Buying online is still much, much cheaper than buying in a store.

[digamma]

Originally Posted by Lathum

We do Costco for wipes because it is cheaper, otherwise it is Amazon

Costco wipes are quality too.

I'm with the forum fascists who say it won't change my Amazon habits at all.

[GrantDawg]

I get what mauchow is saying. Looks like he is buying a good bit of everyday items, mainly for the tax break. I'm sure there is a segment out there that does this, and this will affect their purchases. But most Amazon buyers are probably not going to be overly concerned with the tax, because they are buying for ease and the ability to find what they want without having to go to a number of stores looking. The people who are buying everyday items are more likely now to just go ahead and pick them up at the store while there, since there is no real advantage to ordering them.

[Desnudo]

You already get charge sales tax occasionally. It doesn't stop me from going through with the purchase.

[mauchow]

I wasn't meaning to make this a discussion about Amazon going out of business.. it was an overreaction on my part to have it titled that way. It made for good discussion, regardless.

At least I didn't say someone died and linked to something stating that the person died, only to say it was just a story...

[finketr]

While we're making things equal between online and B&M sales, can we please change the royalty structure for streaming music online versus radio?

[Solecismic]

I can think of a couple of things I'll switch to getting at the grocery again. I don't think it will change my habits much.

What's troubling to me is all the rhetoric about "fairness" in taxation. What is a fair share? What are taxes for? Ideally, we should have a government that treats taxation as something it should do as little as possible. Our legislators should treat our money as their own. They don't - almost every bill has dozens of unnecessary pork-filled riders.

Businesses pay sales tax in states to support the infrastructure. They choose to pass along those costs to customers. When people go online to shop they generate fewer road trips, less wear-and-tear on the infrastructure. On first glance, it seems unconstitutional for states to tax inter-state trade. This only gets through the courts if judges interpret a web site visit as a business setting up shop in your state.

Amazon supports this new tax because it has become a multi-billion-dollar business. As such, it will derive a competitive advantage over smaller businesses by paying this tax. It has developed the structure to pay taxes in nine states where it has a physical presence. Other businesses have not. For Amazon, this support is quite cynical.

I don't see this as leveling any "playing field" - any more than a law prohibiting a store from displaying its goods because that gives it an advantage over internet stores levels the physical presence playing field. It's apples and oranges.

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.

[finketr]

Originally Posted by Solecismic

I can think of a couple of things I'll switch to getting at the grocery again. I don't think it will change my habits much.

What's troubling to me is all the rhetoric about "fairness" in taxation. What is a fair share? What are taxes for? Ideally, we should have a government that treats taxation as something it should do as little as possible. Our legislators should treat our money as their own. They don't - almost every bill has dozens of unnecessary pork-filled riders.

Businesses pay sales tax in states to support the infrastructure. They choose to pass along those costs to customers. When people go online to shop they generate fewer road trips, less wear-and-tear on the infrastructure. On first glance, it seems unconstitutional for states to tax inter-state trade. This only gets through the courts if judges interpret a web site visit as a business setting up shop in your state.

Amazon supports this new tax because it has become a multi-billion-dollar business. As such, it will derive a competitive advantage over smaller businesses by paying this tax. It has developed the structure to pay taxes in nine states where it has a physical presence. Other businesses have not. For Amazon, this support is quite cynical.

I don't see this as leveling any "playing field" - any more than a law prohibiting a store from displaying its goods because that gives it an advantage over internet stores levels the physical presence playing field. It's apples and oranges.

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.

Amen!

[ISiddiqui]

Originally Posted by Solecismic

When people go online to shop they generate fewer road trips, less wear-and-tear on the infrastructure.

So your packages don't get shipped by mail (or UPS/FedEx) trucks driving to your door?

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.

Depends on definitions of waste and "our" money (in an individual or a communal sense - because I think it makes more sense to think of it as the latter).

[Warhammer]

If you look AT&T as a whole, shippers deriving to my door that drop packages off at 20 other houses that keep me and those cars from making separate trips to a central point, yes, it does save wear and tear on infrastructure.

[ISiddiqui]

This assumes you don't to Best Buy or the store to play around with stuff before you buy it on Amazon (which is something I think everyone does - thanks Amazon smartphone app).

[Arles]

I've been paying sales tax on some amazon purchases for around 2-3 months already. Hasn't really stopped me yet.

With Prime, the free 2-day shipping (which ends up often being one day with a distribution warehouse about 20 min from my house) makes it well worth it. I got two mother's day gifts, printer ink, legos for my son (using his allowance) and a DVD on Monday that just arrived this morning. That saved me atleast a half day of shopping and it cost less than buying at the store (even with the tax).

[JPhillips]

Originally Posted by Solecismic

I can think of a couple of things I'll switch to getting at the grocery again. I don't think it will change my habits much.

What's troubling to me is all the rhetoric about "fairness" in taxation. What is a fair share? What are taxes for? Ideally, we should have a government that treats taxation as something it should do as little as possible. Our legislators should treat our money as their own. They don't - almost every bill has dozens of unnecessary pork-filled riders.

Businesses pay sales tax in states to support the infrastructure. They choose to pass along those costs to customers. When people go online to shop they generate fewer road trips, less wear-and-tear on the infrastructure. On first glance, it seems unconstitutional for states to tax inter-state trade. This only gets through the courts if judges interpret a web site visit as a business setting up shop in your state.

Amazon supports this new tax because it has become a multi-billion-dollar business. As such, it will derive a competitive advantage over smaller businesses by paying this tax. It has developed the structure to pay taxes in nine states where it has a physical presence. Other businesses have not. For Amazon, this support is quite cynical.

I don't see this as leveling any "playing field" - any more than a law prohibiting a store from displaying its goods because that gives it an advantage over internet stores levels the physical presence playing field. It's apples and oranges.

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.

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.