Amazon vs. The World

March 17, 2011 -

Retailers have been gunning for amazon.com for a long time and have tried in the past to use political muscle to "put them on a level playing field." When I say "level playing field," what that translates to in the eyes of retailers is "force them to pay state sales tax." Retailers have lamented that it is unfair that they have to make their customers pay sales tax while Amazon does not.

Now brick-and-mortar retailers have a new weapon to take on Amazon - the Alliance for Main Street Fairness. The group is pushing hard to change sales-tax laws in more than a dozen states including Texas and California. Before the group was associated with smaller, local businesses. Now it has the backing of retailers like Target, Best Buy Co., Home Depot, Sears, and Wal-Mart.

Amazon has fought efforts over the years to force them to collect sales taxes. Lawmakers would like to change all that but have to get by a 1992 U.S. Supreme Court ruling; the court said that "only merchants who have a physical presence in a state have to collect sales taxes." Amazon collects taxes in five states: Kansas, Kentucky, North Dakota, Washington, and New York.

Still that hasn't stopped the fight to level the playing field, because, as retailers see it, Amazon is "eating their lunch." Last week retailers pushed for a new law in Illinois that forces Amazon to collect sales taxes if it employs marketing affiliates in the state. This law is similar to a law in New York - and if retailers have their way - it will be federal law.

U.S. Sens. Richard Durbin, (D-Illinois) and Mike Enzi (R-Wyoming) are also considering legislation to force online retailers to collect sales taxes.

This is bad news for Amazon and could be a slippery slope for other retailers and online goods sellers that don't currently collect taxes. Would Microsoft, Valve, or Sony like it if the virtual goods they sell suddenly had a state or federal tax attached? I think not. Consumers would not be amused.

We'll continue to follow this story as it develops.

Source: WSJ


Comments

Re: Amazon vs. The World

There should simply be a federal sales tax that applies to companies that sell to customers outside of the state they physically exist in.

-Greevar

-Greevar

"Paste superficially profound, but utterly meaningless quotation here."

Re: Amazon vs. The World

an 'unreasonable burden'....

Consider that Amazon already collects sales tax for most european countries. Why is collecting US sales tax any different?

Re: Amazon vs. The World

Because the US tax code is an unholy mess and trying to determine the the tax rate when you basically serve the entire country is not feasible. US Sales tax is not as simple as state X charges Y%. In some states, that tax can vary across county lines, across cities, across zip codes. Brick and Mortar stores are easy because they simply have a single rate, the rate for their physical location. Amazon would need to figure out based on where the item is shipping, what the tax rate is for that particular address. They would basically need to hire an entire separate tax proecssing firm to track/update/send money for all the various taxes. If that's not an undue burden I don't know what is. Amazon is not the IRS.

Re: Amazon vs. The World

A fair point, but Amazon certainly has the resources to determine the sales tax for any address in the company.

The rub is that smaller independent online retailers don't.  If state governments or the federal government want to require sales taxes, they should be the ones developing the backend to keep track of them.  Set up a DB that any online retailer can access to calculate tax -- if taxing online retailers is really a good way to generate revenue, then it should pay for itself.

Re: Amazon vs. The World

I live in Houston Texas. Tax is 8.25% If I drive 12miles west it is 9.4%  25 miles east 6.3%  North 13 miles it's 10.12% I belive. BigRedButcase has a point our state Taxes are a complete cluster F$@!&.

Re: Amazon vs. The World

Forcing Amazon to collect out-of-state taxes would no doubt constitute an unreasonable burden. While brick and mortar stores can easily have local franchises handle sales tax issues, Amazon would be forced to handle these issues directly as an out-of-state corporation or else be forced to establish an actual physical presence in each of the states it sells to.

Only the federal government has the right to regulate interstate commerce. Hopefully they will not be so foolish as to allow the above scenario to take place.

Re: Amazon vs. The World

I loathe Amazon, not because the company doesn't pay taxes, but because it's driving every local bookstore or specialty store out of business, because its service operations are hired out of Pakistan or somewhere, and because it's set up as a sort of dictatorship. I like the convenience and speed, but I just don't like Amazon's attitude towards local stores, towards supporting local labor or towards its customers. Essentially, Amazon treats everyone and everything as 'My way or the highway'.

If Amazon gets knocked down a peg or two, or if it goes out of business altogether, no one will find me crying about it. I'd even be willing to pay more sales taxes to give their competition a chance to get rid of Amazon. Good riddance, I say. It couldn't happen to a more deserving company (other than Walmart of course... or maybe BP... maybe Exxon... okay maybe a few companies are worse, but Amazon definately ain't one of the good guys).

Re: Amazon vs. The World

I'll admit I give Amazon a fair amount of business, but I support local business when I can.  I've never bought a comic book collection from Amazon (though I would have during that glitch last year that had $100 books marked down to $10, if I'd caught it in time); I'd rather pay $50 to my local shop than $30 to people I've never met.

And yesterday I biked up to my local bookstore, the one my dad used to take me to when I was 4 years old.  (It's moved since; it was forced out of its original location when a new Borders moved in up the street.  The local store has done just fine since the move; the Borders is long gone.)  It didn't have the selection Amazon does, of course, but I came home with $35 worth of used and discounted books on my back.  (It would have been $45, but the used, discounted Popeye hardcover I had my eye on was too big to fit in my backpack.)

Amazon's really revolutionized the way people do business, but there's absolutely been a cost, to traditional retailers, to states relying on tax revenues, and to consumers' privacy.  I don't hate them, and I don't mourn the disappearance of major retailers like Borders, but it's definitely good to keep the local community in mind when you shop.

Re: Amazon vs. The World

It seems that Amazon is on it's way to becoming the Wal-Mart of the internet- and I mean that in terms of a universal hatred everyone has for them whether it is justified or not.  

Before we get to the "Amazon is evil and doesn't pay their share of taxes", keep in mind that they are definately paying payroll taxes and every other tax that companies pay.  Also, the sales taxes are payed by the consumer outright.  

Yeah, the government needs to close some huge budget gaps as well as reduce the budget.  Say what you want about income taxes (half of the population doesn't even pay them), but sales taxes directly affect everyone- especially the poor. 

Also, if you want to talk "fairness", big brick and mortar stores dominate the landscape.  Even today, the internet is the best way for a small company to stand a chance to compete with the big boys.  

 
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Papa MidnightKyle Orland's response: http://arstechnica.com/gaming/2014/09/addressing-allegations-of-collusion-among-gaming-journalists/09/18/2014 - 12:41pm
Papa MidnightJames, I say this as a person who has managed a gaming press website before: This article is horrendous sensationalism: http://www.breitbart.com/Breitbart-London/2014/09/17/Exposed-the-secret-mailing-list-of-the-gaming-journalism-elite09/18/2014 - 12:41pm
Krono@james I never said you did. I was responding to Andrew's statement that he'd seen a mere two articles suggesting that the term gamer was tainted, by pointing him to a list of the articles that were more or less the orgin of the idea.09/18/2014 - 12:09pm
E. Zachary KnightBut james, you replied to my tweet when I tweeted about one of those articles. That is basically the same thing as writing an editorial on GP in support of it. ;)09/18/2014 - 12:04pm
james_fudgeNot only did we not write one, we didn't cover any of them either.09/18/2014 - 11:46am
KronoThe underlying suggestion most of the articles had that gamers supporting the issue were just the young men stereotype pissed off a lot of people, and sparked the #NotYourShield tag09/18/2014 - 9:41am
Krono@andrew Just two? The whole reason #GamerGate gained real traction was that 9 op-eds including arguments to that effect dropped in 24 hours: http://markdownshare.com/view/a524affd-e679-40be-8aa1-72058065dc2a09/18/2014 - 9:38am
MaskedPixelantehttp://www.gog.com/forum/general/double_fine_abandoned_spacebase_df9_development ITT: People who don't know what Early Access is.09/18/2014 - 9:32am
ZippyDSMleeFF2/4 remake now on steam.09/18/2014 - 9:13am
james_fudgeThis what they really think of us: http://www.donotlink.com/framed?54192709/18/2014 - 9:10am
ConsterAh yes, nothing quite says "I take offense to being associated with an awful few" like siding with said awful few.09/18/2014 - 9:07am
Michael ChandraSo be smart, and if you want to be part of the good guys, separate yourself from the bad guys. Don't attack those upset you won't.09/18/2014 - 6:30am
Michael ChandraMeanwhile, Gamergate is tainted and wise people already use a different tag to defend decent arguments. Keeping it up is like going #KKK while arguing about PoC.09/18/2014 - 6:30am
Michael ChandraSo while claiming to be unfairly attacked for the actions of a selected few, you unfairly attack an entire crowd for the actions of a selected few? #notagamer #butahater09/18/2014 - 6:30am
james_fudgeQuiknkold: Let me ask you- how many of those 'gamers are dead' articles did you see here? Because apparently i'm part of some vast conspiracy.09/18/2014 - 5:18am
NeenekoAh, that old straw man. That is one of the ironies about the discussion, the whole point is showing how good people can still have problems with sexism and not realize it.09/17/2014 - 9:11pm
Andrew EisenYes, there have been a handful of op-eds suggesting that the term “gamer” has become tainted (two that I know of) but that’s the opinion of only a few. I've seen an equal number from those who disagree.09/17/2014 - 8:55pm
Andrew EisenExcept, you haven't provided a single example of a site that’s actually calling gamers a "collective of Sexist White Bigoted Basement Dwelling Manchildren."09/17/2014 - 8:55pm
TechnogeekIf you want to make the stereotype of gamers less painful, try calling people out when they do bad shit rather than handwave it away as "not all gamers". Even if it is a few bad apples, that'll still more than enough to spoil the barrel.09/17/2014 - 8:53pm
quiknkoldI'm not going to Sell Gamergate anymore. It can sell itself. But I will sell the integrity of the Gamer. That we are still good people, who create and donate to charitys, Who engage with those around us and just want to have a good time.09/17/2014 - 7:35pm
 

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