California's new state budget. Amazon to collect taxes July first

[Quicksilver]

Interesting stuff.
Q&A: The new state budget - Inside Bay Area

[bmwbmwuser]

When one is dealing with the economy, one of the major causes that run the show is government intervention (taxes, etc.)

[AzNMpower32]

Originally Posted by bmwbmwuser

When one is dealing with the economy, one of the major causes that run the show is government intervention (taxes, etc.)

As an Econ major, I would say, not always.

Technically Virginia passed a similar law a couple years ago on any online purchase over $100, requiring a levy of the 5% state sales tax. Whether it's enforced is a whole 'nother story.

I just do my shopping and larger purchases when I got to Europe and fork over the 19% VAT (or 23% in Finland), and get a bit of it back. At least my tax dollars are going towards something useful, like their public transit and healthcare.

[motordavid]

From Saturday's Barrons...Amazon does not blink...

Do you remember when they used to call the Internet the "information superhighway"?

That was so 1995. A couple of bubbles ago. Still, recent events have conjured an eerie blast from the digital past. Mary Meeker was back in the news, as was former Clinton Treasury Secretary and Obama chief economic advisor Larry Summers. And Amazon.com (ticker AMZN) once again is arguing that its customers shouldn't pay state sales taxes. Haven't we been here before?

Amazon has long contended that requiring it to collect state sales taxes is unconstitutional, pointing out that the federal government regulates interstate commerce and bars tariffs on trade between the states—unless a company has a physical presence in that state.

On Wednesday, California passed a law that lets Sacramento collect taxes from out-of-state e-commerce sites that do business with in-state Web affiliates, which is to say third-party Websites connected to Amazon. Barnes & Noble (BKS) and Wal-Mart (WMT), both of which have substantial e-commerce operations, argue that Amazon and other e-tailers should collect sales taxes simply because they are retailers.

The Internet is a game-changer, they would say, that redefines shipping across state lines. Talk to your local bookstore owner, if you still have one, about the fair-competition argument.

California, which is broke, estimates that it can capture about $200 million a year in sales taxes by closing the "affiliate site" loophole. That's not likely.

Hours after the law was passed, Amazon terminated relationships with its California affiliates. Critics of the proposed law point out that there are some 25,000 Amazon affiliates in California—small businesses that employ people and pay income taxes.

But the real story is this: If Amazon is ever required to collect sales tax from all of its customers, it will lose a key competitive advantage over brick-and-mortar retailers. So, the debate still rages—roughly a decade after it started, and with no end in sight.

* * * *

Somewhere, in this situ, the good/right/proper avenue is hiding, imo.
Meanwhile, the broke states, counties, cities and towns will turn over every available rock to raise 'revs'...what where those geniuses doing during the halcyon days of the early 2000 decade? Where did all that dough go?!

[PersonaNonGrata]

Yup, Amazon has been down this road before with other states and knows that the federal law prohibits taxing them if they don't have a sufficient nexus in that state. So, Amazon does what it has done before and cuts off California businesses. Like other states before it, California will experience reduced sales tax revenue while putting more California businesses out of business or at risk of going under.

Once again, California is proving itself to be a lost cause of a state and hell bent on driving itself over a cliff. More dumb laws made by dumb politicians. Don't even get me started on the new CA law allowing illegal immigrants to get college financial aid.

[NIGHTMAREuki]

Originally Posted by PersonaNonGrata

More dumb laws made by dumb politicians. Don't even get me started on the new CA law allowing illegal immigrants to get college financial aid.

Seems like most people in gov can't play chess at all, they dont see anything past the first move, in this care make up a tax = bring in more money. But so many more things involved that they can't comprehend.
Out of all politicians the only one i can think of that sees the whole picture is Ron Paul.

[LeMansX5]

Originally Posted by PersonaNonGrata

Yup, Amazon has been down this road before with other states and knows that the federal law prohibits taxing them if they don't have a sufficient nexus in that state. So, Amazon does what it has done before and cuts off California businesses. Like other states before it, California will experience reduced sales tax revenue while putting more California businesses out of business or at risk of going under.

Once again, California is proving itself to be a lost cause of a state and hell bent on driving itself over a cliff. More dumb laws made by dumb politicians. Don't even get me started on the new CA law allowing illegal immigrants to get college financial aid.

This will backfire and prove a loss than help Cali. Seen in several other states. Cali is not the first state, Amazon has done this. Amazon is in need of affiliates, they will go to another state. Politicians don't even learn form mistakes of other states.

[PersonaNonGrata]

Originally Posted by LeMansX5

This will backfire and prove a loss than help Cali. Seen in several other states. Cali is not the first state, Amazon has done this. Amazon is in need of affiliates, they will go to another state. Politicians don't even learn form mistakes of other states.

I recently read that Amazon cut off over 2000 California affiliates. That's 2000 California businesses that are no longer selling products anywhere in the country. (If Amazon has to sever relations with a CA company, then I am taking that to mean Amazon no longer sells that company's products anywhere.) So, this state brilliance has once again driven businesses in CA under or out of the state.

I just placed an Amazon order the other night and guess what -no sales tax and I'm in CA.

[JCL]

But it doesn't matter that there is no sales tax, because there is a use tax. You report that on your annual tax return, don't you

Yes, I agree that use taxes are uncollectable.

But should Amazon be exempt from collecting sales taxes? I tend to agree with the writers that postulate that they will eventually have to, and they know it, but that they are just delaying as long as possible, while they play the states off against each other.

All you need is a federal law that mandates they must collect it. Republicans are reportedly working on it now. Not sure it will pass, but it seems like it would at least make it a slightly more level playing field. I don't think that the Constitution ever contemplated internet commerce, and that it is somehow unconstitutional. Amazon is just hiding behind that.

[AzNMpower32]

The US should just switch over to VAT and avoid this whole controversy anyway. The US taxes consumption too low in general anyways so a VAT would eliminate the whole "who's responsible for taxes" question (everyone) and ratcheting up the tax rate would allow governments to pay some of their debts down.