Taxing of Internet Purchases

[Stan4dSteph]

There is a space to pay sales tax from mail order purchases on the NY state income tax form. It's up to you to determine how much you want to pay in. Any store that has a physical location inside NYS must charge sales tax on a mail order purchase if shipping to an address in NY. We started having to pay sales tax on LL Bean after they built stores here.

[Chernabog]

So now all the California "related" businesses (or whatever they call them) are going to STOP PAYING INCOME TAXES because they're moving out of the state, or will go on to different businesses. If the Amazon law was supposed to generate $150 million in sales tax (which is NOT going to happen now due to them cutting ties), and the affiliated businesses used to pay $150 million in sales/income tax, then the only winners in this situation are Best Buy and Target! California ends up with less money, less business, and fewer jobs. Stupid stupid Democrat financial philosophy. Raising taxes does NOT always equal more money overall.

Here's an idea Best Buy and Target: Lower your goddamn ridiculous full-manufacturer's suggested retail prices and I'll certainly be willing to pay a few extra bucks for the convenience of going to your store to pick it up. I will never, ever pay $29.99 for a blu-ray.

[Ghoulish Delight]

Here's what stinks imo in terms of Amazon is doing.

They've cut off the affiliates, screwing them over. But they still have offices here in California. So it changes nothing. They remain, under this law, required to collect taxes because even without the affiliates they have a presence in California. So cutting off the affiliates is a pure publicity move. They're trying to gain sympathy by saying, "Look at all these poor people we had to cut off to avoid the headache of this law," but in reality doing so avoids nothing. That's a pretty sh*tty thing to do to the affiliates.

[Chernabog]

No, it is my understanding that Amazon does not have offices in California. They have companies they work with that are based in California (i.e. the manufacturer of the Kindle) but no offices themselves.

If you go on Amazon right now, you STILL don't have to pay sales tax in California.

The California law seeks to (unconstitutionally) circumvent a 1992 US Supreme Court ruling on this issue. What Amazon has done is say, if you're going to try and enforce this, then we have the right to circumvent the unconstitutional law.

I think it's a business move and an effort to protest a misguided law. The publicity is secondary.

[Ghoulish Delight]

They do have offices here. My friend just got offered (and perhaps presciently turned down) a job at one. And, even by the Quill v. North Dakota, any office is enough to count as a Nexus.

California's new definition of a Nexus may indeed be too broad. The old definition probably wasn't broad enough. But the fact is, if Amazon is not currently collecting sales tax, while having offices in California, they are ignoring the law, not circumventing it, and doing so at the expense of many small businesses just to push their own agenda. I find that distasteful.

[Chernabog]

Was your friend's office for Amazon, or a subsidiary? According to the NY Times:

"The law had said that an online retailer needed to collect taxes on purchases if it had a physical presence, or a nexus, in a particular state. Any retailer with an office or warehouse qualified. Amazon had no such facility in California."

If your friend turned down a job at an Amazon office in California then Amazon should have been charging sales tax in California BEFORE the law was passed. I have a feeling that your friend was offered something else:

"California’s new law goes further by including related companies, or subsidiaries in its definition of a nexus. Several Amazon subsidiaries have offices in California like A9, which works on search technology, and Lab126, which designs Kindle digital book readers."

There are no Amazon offices in California:

http://www.amazon.com/Locations-Care...node=239366011

Plus, if you go to the jobs section and perform a search for all of California, all jobs are listed in Cupertino, CA... for the aforementioned Lab126 company.

[Ghoulish Delight]

Yes, it's a subsidiary. What's your point? The new law includes such subsidiaries (source). So unless they're shutting A9 (and A to Z, which is where my friend was offered), then cutting off the affiliates does nothing to change their status under the new law and they're screwing the affiliates over for now reason other than to grab attention. So my point stands.

[Chernabog]

Originally Posted by Ghoulish Delight

Yes, it's a subsidiary. What's your point?

More or less what CP wrote - I'm sure Amazon's attorneys analyzed the law in relation to Quill v. North Dakota (which I really should get around to reading, lol), and are advising that while the "affiliates" portion of the law is going to be difficult to get around, Amazon has a chance of winning on the "subsidiaries" issue. Hence, they cut all ties to CA affiliates and are not collecting sales tax in CA right now.

I'm not sure who reports the sales tax on their CA forms, though everything I've read states that it is nigh impossible to enforce. Personally I pay plenty of sales tax, which is ridiculously high even after the expiration of the 2-year temporary increase. It is a fundamental philosophic problem, I suppose, that Dems see tax increases as equaling more revenue. Raising taxes actually drives businesses and jobs away, thus leading to lower income taxes overall and a greater burden on the CA economy due to the unemployed.

Again, Best Buy and Target need to lower their prices to compete, plain and simple. When books, cell phones, movies, electronics and groceries are cheaper to buy on the internet (even WITH the sales tax added), Best Buy and Target need to step it up. The only thing going for the brick and mortar stores are the convenience of having the item NOW, and people will pay a few extra dollars for that. But a FEW extra dollars, not like $10-12 more for a blu-ray, or $100 extra for a television.

[Kevy Baby]

Originally Posted by Chernabog

Again, Best Buy and Target need to lower their prices to compete, plain and simple. When books, cell phones, movies, electronics and groceries are cheaper to buy on the internet (even WITH the sales tax added), Best Buy and Target need to step it up. The only thing going for the brick and mortar stores are the convenience of having the item NOW, and people will pay a few extra dollars for that. But a FEW extra dollars, not like $10-12 more for a blu-ray, or $100 extra for a television.

I disagree with this, purely on the basis that Target and Best Buy don't seem to be hurting. While they may not be getting your Blu Ray business, they are obviously selling quite a number of them

[Chernabog]

Originally Posted by Kevy Baby

I disagree with this, purely on the basis that Target and Best Buy don't seem to be hurting. While they may not be getting your Blu Ray business, they are obviously selling quite a number of them

According to them they are hurting (or, at least that overall sales are down)-- which is the reason for this law being passed in the first place. Their argument essentially is that anyone buying off of the internet gets an automatic discount because they don't pay sales tax, and that they simply cannot compete with that. I think that's a load of BS.

Certain items are keeping them going -- people generally want to buy an iPad or a smartphone from a brick-and-mortar store, for instance, or if they HAVE to get a video game on release date they'll reserve it at Best Buy or Gamestop rather than wait for mail delivery. See i.e. the article below:

http://www.startribune.com/business/123809429.html