Amazon v. California, Round II

September 6, 2011 -

While Amazon might be on the precipice of usurping legislation passed earlier this year by the state of California with a voter referendum this November, lawmakers are on the attack. The New York Times chronicles the fight going on in California in this article, which is interesting because it pits traditional retail in the state against online retailers. Earlier this year the state passed a law to collect sales tax from any online retailers that have a physical presence within its borders - including resellers and those that earn money from referrals. Amazon, which is headquartered in Seattle, Washington, has no plans to pay its portion of  that sales tax, which the state estimates is around $100 million annually (from all online retailers, not just Amazon).

The big problem for lawmakers is that most online retailers - most notably Amazon - are not playing ball. The company cut its ties to anyone in the state that has a physical address and has argued that its only presence there - a manufacturing facility that builds the Kindle - is not subject to the law because it is not engaged in actual commerce. Further, Amazon easily collected 50,000 signatures it needed to put the whole online sales tax issue on the ballot in November.

This has pissed off more than a few state legislators, who are already trying to pass emergency measures to kill that November vote. The New York Times article notes that Democrats would need at least two Republican votes for their bill to become law. That prospect is a long shot, no matter how they slice it. Meanwhile, Amazon offered to open up distribution centers in the state if California gave them a free pass on the sales tax collection. Governor Jerry Brown and legislators have already said no to that proposal.

But not everything will come up sunshine and roses for Amazon either. Assuming that voters invalidate the sales tax law, powerful lobbyists are waiting to sue Amazon in federal court, such as the California Retailers Association.

The real question is, should voters in the state be forced to pay sales tax on online purchases? Remember in the 90's when you couldn't get a politician to say it was a good idea to tax anything on the Internet? Clearly those days are in the rear-view, but should consumers in California really give a state that continues to mismanage the tax revenue it already receives an additional $100 million to spend?

We don't have answers, just more questions. We’ll continue to follow this story as it develops.

Source: NYT


Comments

Re: Amazon v. California, Round II

Reason Magazine published an article on this topic today. They even proposed a solution to these internet taxation problems:

There are better ways to level the playing field. One solution is for states to cut taxes on in-state vendors. Another option is an “origin-based” tax regime, under which states would exercise their right to tax equally all sales inside their borders, regardless of the buyer’s residence or the ultimate location of consumption. Under that model, all sales would be “sourced” to the seller’s principal place of business and taxed accordingly. This approach is already fairly common. A Washington, D.C., resident who buys a car across the Potomac in Virginia, for instance, is taxed at the origin of sale in Virginia regardless of whether he brings the car back into the District. Each day in America, there are millions of cross-border transactions that are taxed only at the origin of the sale; no questions are asked about where the good will be consumed. We should extend the same principle to cross-border sales involving mail order and the Internet. Such an approach would be good for retailers, good for consumers, and good for federalism.

Re: Amazon v. California, Round II

Reason's "solution" is terrible. Just like Reason (a bastion of right-wing anarcho-libertarianism).

Suggesting California cut taxes on in-state vendors is ludicrous in an essentially bankrupt state. And the "origin-based" tax is questionably constitutional, impossibly difficult to enforce, logistically impossible to coordinate across 50 states individually in a useable and understandable manner that is fair to consumers, and is little more than a trumpeting of the "States Rights uber Alles/Tax Cuts 4 Lyfe cuz taxes r bad" motto Reason swears by. 

Re: Amazon v. California, Round II

How is it ludicrous? It is how brick and mortar already functions. If I cross the border between Oklahoma and Texas and buy something in Texas, I pay the Texas sales tax. The same with an online purchase. Such a solution would be the same for online; If I buy something from Amazon, I get charged the Washington sales tax.

Where ever the company is based, that is the sales tax charged. I don't see how that is hard to work out.

Re: Amazon v. California, Round II

The real question is, should voters in the state be forced to pay sales tax on online purchases?

The answer is, yes. In fact, we are already supposed to be paying the tax value on products purchased out of state. It's called the use tax if I remember correctly. Most people don't pay it and its almost impossible and highly impractical for the government to try and find out who owes how much.

What California is trying to do is hold the online retailers responsible for collecting the taxes that their constituents should have been paying in the first place. Amazon is trying to deny having any presence in the state that would force it to collect sales tax like any other CA retailer would. While its not difficult to get 50,000 idiots to sign a petition for "no new taxes" the fact is, this is a tax that should have been paid already, then maybe the state wouldn't be in as bad a financial problem as it is (it'd still be in debt, but not as much).

The days of free and untaxed internet sales are quickly coming to an end. I'm not saying there's no such thing as a free lunch, it's just that there's no such thing as a free lunch forever. Someone will always try to take their percentage, whether earned or not.

I hate broccoli/ and think it totally sucks/ Why isn't it meat?

Re: Amazon v. California, Round II

I'm completely unsympathetic to California.  They bankrupted their own state with frivolous pet projects like EMA.  Let them clean up their own mess.

Re: Amazon v. California, Round II

Watch them waste millions more fighting Amazon over this and losing like they did with ema. We wouldn't have so many budget problems if they dumped the nanny state routine and stopped figuring for these BS laws. My college receivedal a bill for 1 million dollars, probably to cover part of the state's lawyer fees.

Re: Amazon v. California, Round II

Considering California's proven incompetence with money, I fail to see how collecting more tax is going to help.

Re: Amazon v. California, Round II

Well, California has a bad money situation in the first place... it is one of the only states where the comptroller and governor are elected separately, so neither actually works for the other and bad budgets kinda evolve naturally out of it.  Good example of what happens when blame/responsiblity is concentrated but power is not.

Re: Amazon v. California, Round II

Why, they can get back the money they lost before!

Re: Amazon v. California, Round II

So their politicians can burn it on more vanity projects.

 
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E. Zachary KnightZippy, So you can't find even one?08/29/2014 - 1:04pm
ZippyDSMleeAndrew Eisen:Right because shes prefect and never exaggerates... *rolls eyes*08/29/2014 - 12:53pm
SleakerAnd honestly, nearly all of the games she references, or images she depicts I've always cringed at and wondered why they were included in games to begin with, from pinups through explicit sexual depictions or direct abuse. I think it's cheap storytelling.08/29/2014 - 12:35pm
Sleaker@AE - aren't most people fundamentally misunderstanding her at this point? haha.. On a related note I think a lot of the backlash is coming from males that think she is telling them their 'Generic Male Fantasy' is bad and wrong.08/29/2014 - 12:33pm
Andrew EisenAnd no, I don't think the female community would be upset over the performance of a case study in and of itself. Possibly the mostivations behind such a study, the methodology or conclusions but not the mere idea of a case study.08/29/2014 - 12:29pm
Andrew EisenAmusingly, these videos aren't saying you can't/shouldn't use tropes or that sexual representations are inherently problematic so those are very silly things to have a problem with and indicate a fundamental misunderstanding of the series.08/29/2014 - 12:29pm
SleakerDo you think the female community would get extremely angry over a male doing a case study on the negative impact of sex-novels and their unrealistic depiction of males and how widespread they are in american culture?08/29/2014 - 12:25pm
SleakerThe other thing that people might find problematic is that they see no problem with sexual representations of females (or males) in games. And realistically, why is there anything wrong with sexual representations in fiction?08/29/2014 - 12:24pm
SleakerTo even discuss or bring up these issues at a cultural level to begin with. Going straight for games to many probably feels like a huge overstepping given that it's interactive story in many cases, and when you're telling a story why can't you use tropes.08/29/2014 - 12:21pm
SleakerI think a large part of the controversy stems from the idea that games aren't culture setters, but culture reactors, and simply depict what is already in culture. So people don't care that games use tropes or are blind to them because we've failed ...08/29/2014 - 12:20pm
AvalongodBesides, what better way to make her point for her than to respond to her opinion by behaving like a misogynistic asshole. Sure, it may be a troll account, but that doesn't make it "ok"08/29/2014 - 12:19pm
AvalongodWhether Sarkeesian is "right" or "wrong" is not relevant, neither she nor any other woman should have to expect that her opinion will be met with death threats or even just sexist language.08/29/2014 - 12:18pm
Andrew EisenOh, may as well. Zip, I challenge you to cite three specific examples from the TvW videos (use direct quotes and time stamps) and explain how/why they ring hollow or are over exaggerated.08/29/2014 - 11:56am
Andrew EisenZip - Bullies on both sides? What both sides? And of course bullies are worse than people who aren't bullies.08/29/2014 - 11:23am
Neeneko(2) yes, male tropes also have problems and gender studies looks at those too. But this highlights a privilage problem, the idea that if male issues are not brought up too female issues should not be discussed.08/29/2014 - 10:42am
Neeneko@ZippyDSMlee - jumping back (1) one can acknowledge systemic problems without requiring every male be a Neanderthal.08/29/2014 - 10:42am
MaskedPixelanteI don't like the new 3DS, mostly because it means there's a good chance future 3DS games won't be compatible with the current models.08/29/2014 - 9:30am
ConsterI don't get why Amazon decided to buy this "Twitch" fellow, really. It took him ages to beat Pokemon.08/29/2014 - 8:31am
ZippyDSMleeIt goes without saying that we need to et rid of the bullies on both sides that are far worse than Sarkeesian or Quin will ever be.08/29/2014 - 8:24am
ZippyDSMleeI'm talking more about the genreal movement and how silly it is, as for Sarkeesian half of what she is says rings hollw while the other half tend to be over exsagerated.08/29/2014 - 8:22am
 

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