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California Lawmakers Give Amazon Tax Reprieve

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http://www.nytimes.com/2011/09/11/technology/california-votes-to-give-amazon-a-sales-tax-reprieve.html?_r=1&ref=business

California lawmakers overwhelmingly approved a compromise bill Friday night giving Amazon.com a one-year reprieve from having to collect a sales tax from its customers in the state.

Under the new measure, Amazon agreed to start collecting the tax in September 2012 unless there was federal legislation on the issue. Senator Richard J. Durbin, a Democrat from Illinois, has proposed a national law requiring e-commerce companies to collect sales tax, but it has not gained much traction.

Legislatures around the country, supported by struggling bricks-and-mortar stores, have been seizing on the sales tax issue as a means of raising much-needed funds. Amazon is fighting in the courts against a New York law compelling it to collect taxes, and has used the prospect of either opening or closing warehouses as a bargaining chip in negotiations with Texas and South Carolina.

The deal with California might embolden other states, said Robert W. Wood, a tax lawyer here. “Other states needing money will look and say, ‘It wasn’t a smooth process, but California is going to come out ahead,’ ” Mr. Wood said.

So a bankrupt state thinks it's a great plan not to collect sales tax from probably the biggest seller in the State. I bet all the little mum and pop stores in California are glad this had been approved.

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California is scared stiff of losing the tech firms - lots are moving to Coloradoa and to Columbus, Ohio.

Looks nice does Columbus. Apparently one of the safest and best places to live in the US. I did a search a few weeks back and was shocked how many good paying IT jobs exist there.

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So a bankrupt state thinks it's a great plan not to collect sales tax from probably the biggest seller in the State.

So a bankrupt state thinks that increasing taxes on companies is going to help pay their debts?

It's well established that a state has no right to force companies in other states to pay taxes there. Does Amazon have any operations in California anymore? If so, I'd guess they won't have by September 2012.

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AFAIK there actually is case law in the USA that says you don't have to pay sales tax on things purchased over the internet.

the little mom and pop stores can't give people prices that amazon can. so they need to go, or they need to offer something different.

my mum runs a bookstore in Ann Arbor, Michigan, they retain customers by offering damn good service, but the book business will eventually be almost completely electronic, it is a shrinking market and that is a good thing.

cheaper books means more people buy them and people can afford more books/articles etc.

its called progress.

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In other words, Amazon has bought itself a year to close down and move out all its operations in CA. Given that CA is right next door to a state that has no sales tax (OR), the winners are going to be DHL, FedEx, etc.

Edited by The Ayatollah Buggeri

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AFAIK there actually is case law in the USA that says you don't have to pay sales tax on things purchased over the internet.

the little mom and pop stores can't give people prices that amazon can. so they need to go, or they need to offer something different.

my mum runs a bookstore in Ann Arbor, Michigan, they retain customers by offering damn good service, but the book business will eventually be almost completely electronic, it is a shrinking market and that is a good thing.

cheaper books means more people buy them and people can afford more books/articles etc.

its called progress.

Books on the internet: out of sight = out of mind.

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AFAIK there actually is case law in the USA that says you don't have to pay sales tax on things purchased over the internet.

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Aren't the various states allowed to collect "use tax" on out-of-state purchases?

In NY state, they bill you an amount based on your income to cover the estimated use tax you might owe on out-of-state/internet purchases of less than $1000 each. I think it usually works out to around $100 for me. In addition, you're supposed to declare any individual purchases over $1000 (except precious metals, etc.) and pay that tax, too. All this is done when you file your state income tax return. Interestingly, this means (tax-wise) it's good to break up a single purchase into sub-$1000 parts, when possible -- camera+lens, for example.

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Aren't the various states allowed to collect "use tax" on out-of-state purchases?

Yes, but in the two states I visit regularly (AK and CA), no-one pays it and it's virtually unenforceable. That is why the CA authorities want Amazon to collect it on their behalf at the point of sale. They actually scrapped sales tax in AK a few years ago (though some individual cities still levy it), part of the reason being that so many people bought so much stuff online (as you'd expect in a remote location like that) that it was costing the state more in lost jobs etc. to the local businesses that were being penalised by the tax creating an unequal playing field that it would ever have raised.

Ultimately I suspect that either there will have to be a federal law requiring online retailers to collect state sales taxes on their behalf, or state sales taxes are going to disappear and be replaced by an equivalent that cannot be circumvented by buying from out of state (e.g. an annual Internet licence that you have to buy from the state in order to have a connection in your home, for example).

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http://www.nytimes.com/2011/09/11/technology/california-votes-to-give-amazon-a-sales-tax-reprieve.html?_r=1&ref=business

So a bankrupt state thinks it's a great plan not to collect sales tax from probably the biggest seller in the State. I bet all the little mum and pop stores in California are glad this had been approved.

Congress shall make no law abridging the freedom of speech, or of the press...

So how exactly is it OK for the state to demand a fee for selling a book or pamphlet?

Even the UK doesn't allow such flagrant abuse of the principles of free speech.

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  • 338 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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