Morning Poll: Should Amazon.Com and Other Online Retailers Pay Sales Tax?

Categories: Morning Poll

amazon logo 1.JPG

Online bookselling giant Amazon.com has three distribution facilities in Phoenix and is planning a fourth. Despite the massive movement of sold books through Arizona, Amazon -- like most other online retailers -- neither collects from its customers nor pays, according to the state, any state sales tax.

That's one of the primary reasons Amazon.com's got such a big presence here. Other states, like California, want to put the squeeze on the book giant.

Not only doesn't the state collect sales tax from Amazon, but the retailer is technically in violation of state tax laws, according to a state Department of Revenue analyst quoted in a May Business Journal article.

The Governor's office didn't call us back yesterday morning on the matter. During a celebration on Thursday of Amazon.com's completion of a 1.2 million-square-foot facility and its plans for another facility of similar size, Brewer told reporters who asked about the tax situation that, "I'm not in a position today to really discuss that." 


It's a touchy subject, since pressing the company on the issue might just cause it to pull up stakes an leave town for a more friendly state. That would cost the state jobs. But wait -- isn't Brewer, signer of SB1070, a believer in the idea that the law should be followed?

Brewer's acquiescence puts money before principle -- or state law, if the state revenue department's analyst is right.

So, should Arizona join other states in trying to force online retailers to collect and pay sales tax, or should we continue to reap the benefits of having less-strict enforcement?

Here's your morning poll:





My Voice Nation Help
29 comments
CPA Howie
CPA Howie

Its time that sales taxed is charged on all online purchases as though purchased at a brick & mortar retail store in the state in which the buyer lives.  Sales tax was originally exempt in order to subsidize online retailers.  They no longer need the subsidy; it's time it goes.

Brandon
Brandon

Riddle me this. How is the Amazon distribution center Governor Brewer is standing inside for this photo-op with the Amazon bigwigs not a "physical nexus"?

http://verdenews.com/Main.asp?...

Between the four distribution centers, we're talking millions of square feet of warehouse space, offices, employee facilities, parking lots, and tens (if not hundreds) of millions of dollars in inventory. This isn't a physical presence?

In New York, a blogger who links to Amazon is considered a nexus, and Amazon collects and remits sales taxes accordingly. But in Arizona, four sprawling distribution centers, registered by Amazon's lawyers under a subsidiary LLC, are not?

Clarity
Clarity

If Amazon is forced to pay taxes on items shipped out of state, which legally theydo not have to collect, Amazon will simply up and leave the State.

Another thing Republican politicians can screw the State out of in termsof jobs and revenue. I would not be surprised in the least to see the Republicanspush that agenda and royally screw the State even more. 

Wait for it... Wait for it...

Larry Miller
Larry Miller

What right has any of these guys, sitting at a desk, doing no real work, have to our money? I worked hard, I sweat and toiled for my sustenance. I struggle to gert by, just like most of America.So why can some pencil pusher, I will never meet, sitting at an air conditioned desk somewhere, just right up a new demand for more of my money? How do they keep getting away with this? Last time I checked, it looked like half of everything I earn is taken by one tax or another. Yet they just sit there, at their air conditioned desks, and keep finding more and more ways to push that pencil, and take what they have not earned.

Next time you are in traffic, or sitting in a movie, or at a ball game, look at all the people, and just try to imagine how much half of everything all these people make must be. And yet the people that do this to us are still broke?

Give me a break. I oppose evil in high places. The answer is not to tax more entities, to pay their fair share. Because we are all way beyond any resonable idea of a fair share. Who is it that always, I repeat always, winds up paying the tax? We the working people, thats who. It always trickles down. I believe the answer is to work the other direction. I believe we need police and fire protection. I believe we need Military protection. I believe we need sewer and garbage service, and safe roads. But as I drive through my towns neighborhoods, with it's  thousands of homes. I cannot begin to justify half of the income of all these people being taken to support these services. It can not be that hard to figure out. Can it?

Jos Harrison
Jos Harrison

I don't see anything wrong with it so long as they're doing the sales. I can't remember the last time i bought something from Amazon rather than one of its resellers, and obviously Amazon shouldn't be responsible for collecting or repaying its resellers share of sales tax. Plus how do you figure out what portion of Amazon's sales come from AZ, since that'd be the only part they're responsible for paying.

David
David

Let's get real folks. This is not rocket science.

L.C. and WhoKnows have it just about right.

Companies with a physical in-state presence ("nexus" in legal jargon) in a particular state will collect sales tax from their customers for online sales within that state. If Amazon does not collect sales tax for shipments to Arizona, it means Amazon's implicit contention is that it has no tax "nexus" in Arizona - - - sure, Arizona may have some big humongous distribution centers who in truth do all their work for Amazon, but I will bet you dollars to donuts that those facilities are separate and carefully shielded entities and are not considered an Amazon "nexus". If the state of Arizona or anyone else doesn't agree with Amazon's contention, they can sue them, but so far, no such lawsuits like that have gone against Amazon. Amazon did not get to be as big as it is being careless in such matters. If Amazon eventually loses out, it will be because of changing laws rather than violations of existing laws.

Now let's talk about use tax - - - that's where a state that can't get it's tax-grubbing paws on a retailer like Amazon,  passes a use tax law requiring good-faith honor system voluntary payments from individual suckers - - - - er I mean , citizens. Now put on your thinking caps and tell me what is the problem with use taxes? Those of you who said they are UNENFORCEABLE go to the head of the class. No state has the resources, and neither is there the necessary supporting legal framework, to be prying into online purchase records of millions of citizens to determine what they owe in use tax. Who knows anybody (private citizens) who pays use taxes? The compliance rate is abysmally small, and the states are completely unable to enforce it.

OK, let's wrap this up. The U.S. Constitution reserves to the federal government the power to regulate interstate commerce. Individual states have NO power in the regulation or taxation of interstate commerce unless it has been specifically granted by appropriate federal law.

So getting back to L.C.'s point, sales tax will be collectible on interstate online retail purchases when and only when we have appropriate federal interstate sales tax legislation, passed by Congress and signed into law by the President. Right now, we've got bupkus in that area.

Until Congress gets a spine and passes something into law, to those who expect me to pay sales tax on my out-of-state online purchases, I quote one of my favorite historical figures, Yosemite Sam, draw my six-shooters and say "Back Off, Varmint!"

AZIndependentThinker
AZIndependentThinker

The tax is to be applied where the purchase is made. So if you are visiting another state the tax is collected where you make the purchase. No, AZ does not expect you to pay them taxes when you are visiting another state. When you are sitting at home and shopping over the internet the tax is applied to where you are located at that time.

AZIndependentThinker
AZIndependentThinker

The sales tax laws say that the tax is on the consumer regardless of where the item comes from. When the retailer has a physical location in the same state as the consumer than the retailer is required to collect the tax at the point of sale and remit it to the state. If the retailer is not located in the same state as the consumer then the state cannot require the retailer to collect the tax and instead the consumer is required to pay the tax to the state on their own. Since Amazon has a physical presence in AZ the state can require them to collect sales taxes on purchases by AZ residents. It's totally ludicrous that our state government is exempting Amazon from having to do this but requires other retailers with a physical presence to collect the tax.

If Amazon had no physical presence in AZ then this wouldn't be an issue. Amazon's argument that their distribution centers are a subsidiary is ridiculous. Any way you want to cut it, Amazon has a physical presence in AZ and should be required to collect sales tax on their AZ based retail sales just like other retailers located here.

AZIndependentThinker
AZIndependentThinker

It's amazing how many people are in favor of giving a special exemption to a big retailer such as Amazon. They absolutely have a physical presence with their multiple distribution centers. It doesn't  matter that these facilities are subsidiaries. Why shouldn't they have to collect sales taxes like traditional brick and mortar retailers? Following this logic we'll move more retail sales to online where sales tax isn't collected and then we can increase our sales tax a lot higher.  Maybe we can jack it up to 15% or so and shift the burden of sales tax collection to businesses which don't have as much clout as Amazon. Sounds like a wonderful plan, doesn't it? Although Amazon may be creating lots of jobs, there are even more jobs lost at brick and mortar retailers as people shift their buying to online to avoid sales tax. Anyone make the connection to our state sales tax increase last year (6.3% to 7.3%) and the increasing shift of sales from local stores to online stores such as Amazon that don't collect sales tax?

How about expecting businesses to compete with the same set of laws and let the free market operate as it should? Amazon is an amazing business and is a compelling place to shop without needing any subsidies through sales tax collection exemptions. Exempting them from collecting sales tax is absolutely a subsidy which is paid for by people who shop where sales taxes are collected.

We all know how unrealistic it is that people will keep track of all their online purchases and then honestly remit the taxes they owe.  How about we stop requiring all retail businesses to collect sales taxes and require citizens to also report and remit those taxes?  And while we're at it, let's do away with income tax withholding and just let everyone take full responsibility for managing it on their own?  The government should not be in the business of picking winners and losers.  Amazon's exemption is outrageous and there is no legitimate justification for treating them differntly than any other retailer that has a physical presence in our state.

Rex Reason
Rex Reason

This is a big Zonie thing. They tend to favor big business at all costs. Which is odd, considering how bad big business has been fucking them over for decades.

Walter Concrete
Walter Concrete

If you buy something, you pay tax.   If you sell something, you don't pay tax.    Ray, I smell a Pulitzer in this one.    Start popping the champagne.    I love the way you intertwined the characters and the landscape of retail heart break.   A better dramatic comedy has never been written.

Frustratedvoter
Frustratedvoter

The problem with amateur economists and tax policy wonks is they tend to get everything wrong.  WhoKnows got close with the Federal point, and the Feds won't do anything controversial that doesn't otherwise help them, so don't hold your breath.  Everyone who thinks taxing Amazon is bad is basically begging to have their property taxes increased, income taxes increased, not to mention sales taxes increased (until all the actual AZ retailers neighbors are out of business, at which time you get rid of the sales tax completely and triple those other taxes again to make up the difference).  Tax systems simply don't work when you only tax some transactions and make it otherwise elective.  Worse, you have to raise your rate to offest the ever-shrinking tax base, creating even more incentive to buy from out of state businesses that can defy your law.  Great strategy if a self-inflicted wound is the goal (and for some of couse it is).  Amazon - the tribal casino and smokeshop of the retail sector - putting your neighbors out of business since 1996...  but at least you can sleap well with the illusion that you're getting away with not paying tax on something!  Ask any politician, for the braindead masses illusions are just as good as reality.

AZIndependentThinker
AZIndependentThinker

Very well stated!  We just went through that exact same scenario last year when we ended up raising our state sales tax from 6.3% to 7.3% (a 16% increase!). Such an increase wouldn't have been as necessary if retailers such as Amazon collected sales tax for AZ residents. The more sales tax has to increase the more people will shop online to avoid sales tax and so on and so on. Maybe we should eliminate sales tax altogether and increase income tax?

Jas Wats
Jas Wats

No, because raising the income tax only taxes those who actually work, not all purchasers, as it should.

elExtranjero
elExtranjero

On a second thought, I just read in the newspaper that AZ just passed a law to make you pay sales taxes that you saved by buying online, and by buying in another state.  According to the article, you will be responsible in your state tax forms to declare whatever tax you saved by buying as I said above and then pay it.  So I guess there's no getting away from it...unless of course you forget you bought anything online or in some other state...LoL

elExtranjero
elExtranjero

All I know is that when I buy something online from say Kohls, or JCPenney who both have actual stores in AZ i get charged sales tax.  Why does Amazon get a break on that?  And don't tell me that's no break to Amazon, since in reality I am the one who ends up paying the tax.  They get the break in the form of 'not playing in the same field' as the other retailers because they can use their NO TAX break to their advantage...

Jwphx
Jwphx

Exactly.  Plus they are saving the cost of collecting and remitting (accounting costs)

Mistalee
Mistalee

Walsh's right. It is a sucky headline, Amazon DOES collect and remit sales taxes.  But the sale is taxable when the customer is a resident of the state which is the point of sale. The warehouse the item eventually ships from is not necessarily the point of sale.

AZIndependentThinker
AZIndependentThinker

It doesn't matter where the item is shipped from. It's really simple...if the retailer has a physical presence in the same state as the consumer then that state can require the retailer to collect sales tax on the consumer's behalf. A good example is Walmart. Because they have a physical presence in AZ they are required to collect tax on all purchases by consumers in AZ that are done through their website even when those items end up shipping from somewhere outside of AZ.

Roro
Roro

I regularly buy items from Amazon that are shipped from the Goodyear, AZ "Fulfillment Center" as per the UPS tracking information and I have never had sales tax applied. The new state law requires that I know what is and what isn't taxable and remit the "use tax", something that businesses have software for to perform automatically. This applies to in and out of state sales. My wife, an accountant, said the reason they don't want to is that it is a real pain in the butt come audit time.

Mikey1969
Mikey1969

First off, fuck Amazon. I can't stand anything about them. At all.

As for the story, here's the problem with sales tax on the internet: Where do you pay it for? The state where the business you are ordering from is headquartered? The state where the item is shipped from? The state where you reside? It's just too much of a pain in the ass for anyone to ever consider it fair, someone will always complain that they aren't getting their share. Also, what's the rate going to be? If I order my product and it ships from one of the Arizona facilities, will I py a different sales tax rate than if I were to order it and it were to ship from a facility in somewhere like New York? Next, how do they calculate your total cost? They obviously don't know where something is going to ship from until the order is fulfilled. Sure, maybe there is a closer facility, but they are out of the product, so suddenly it ships from somewhere else, and the total you have planned on changes, maybe causing checks or debits to bounce, if you play your finances as close as my wife and I did, up until 5 years or so ago...

Either way, it's a total cluster even thinking about trying to put together some kind of coherent law about taxing the internet. Besides, I believe we have been assured for years that we were never going to be taxed on the internet, are we once again going to roll over, expose our bellies to the legislature, and submit?

Jwphx
Jwphx

Actually it is quite simple.   I was an owner of a company that did business in every State and we had distribution centers in 5 States.   If we had a physical Salesperson in a State, we had "Nexus" which required us to collect and remit sales tax for anything shipped into that state, regardless of what state it was shipped from.  So a customer in California was always charged California sales tax and we remitted it to California no matter if it was shipped from Arizona or Mississippi.  In States where we had no Nexus, we didn't charge sales tax.  Just the fact that we had a Salesperson that lived in a State meant that we had Nexus, we did not even have to have a company owned or lease office or distribution center.   What Amazon is getting away with is not right.

Ross
Ross

It's so 20th-Century to be calling Amazon a bookseller and writing stories that imply all they ship from Arizona is books.  There are many more products in their warehouses here, including candy, according to people who work there and report that there is a problem with the boxes being "accidentally" broken and the contents consumed by employees.

WhoKnows
WhoKnows

If an item is shipped from a brick and mortar facility in AZ to someone in AZ, there should be a state sales tax applied.  In fact, if it's shipped to any state with a brick and mortar Amazon facility that state's sales tax should be applied.

Michael J. Walsh
Michael J. Walsh

Bad headline & question since if Amazon et al COLLECTED sales tax they would pay ("remit" in tax lingo) it. 

Ghj Hbn
Ghj Hbn

welcome to our website:

=== http://globalsell.org/ ===-

shirts,bags,hat and the decorations.

if you like to order anything you like.

More details,

please just browse our website Quality is our Dignity;

Service is our Lift.

enjoy yourself.

thank you!!

Now Trending

Around The Web

From the Vault

 

Loading...