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Comment by maeon3 | Hacker News Reader

Maybe Amazon could ask Connecticut to build them a new road in the state which they currently reside. Connecticut would say: "Sorry, we won't service entities that are not physically inside Connecticut."

And that quote illustrates he hypocrisy. Connecticut wants to receive money from entities outside their state, but they will not service those same entities outside their state.

This is all about getting something for nothing. If a state wants to tax entities from outside the state, then it should bring on new responsibilities for that state. Connecticut should be servicing Amazon in some significant way, proportional to the amount of money extracted from it.

The best way for amazon to fight this is to insist on a fair and equitable trade of tax money for state government services.

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the thing is, the tax is already being levied. And it's generally considered a tax on the customer doing the buying (who does live within that state) If the merchant is also within that state, the merchant is expected to collect the tax. If the merchant is out of state, the consumer is supposed to keep track of and pay 'use tax'

The argument here is not over if the tax should be paid or not, or even over who should pay the tax. the argument is over who should collect the tax; the states want the retailers to collect because that's likely to lead to increased compliance, and the retailers want the state to collect, 'cause that makes out of state goods look cheaper to people who plan to not report their use tax.

Moreover, Amazon is trying to avoid a circumstance where every state and county has different and potentially complex sales tax laws. Say, County X could have 100 different little tax levels depending on the type of product, time of day, phase of the moon etc. As is clear from the Amazon statement, they are not against sales taxes in principle and would agree to pay one if it were uniform (i.e. hassle-free).

As is clear from the Amazon statement, they are not against sales taxes in principle and would agree to pay one if it were uniform

As lsc pointed out above, that's not the case at all. Amazon is refusing to collect taxes on behalf of its customers, not refusing to pay its own taxes.

By law, citizens are supposed to tally up what they bought from internet retailers over the course of the year and pay any remaining sales tax on April 15th. Shockingly, this isn't happening, and the sales taxes aren't being paid at all. So these states want Amazon to behave like a bricks and mortar retailer, and collect the tax at time of sale instead.

Amazon doesn't want to collect sales tax because not doing so makes their prices look lower than competitors like Barnes and Noble, which does collect sales tax. Nothing more, nothing less.

Wal-Mart wanted $30 for a 10 foot USB cable. I got the same cable down the road for $10 at Radio Shack. Wal-Mart should be cheaper due to larger bulk discounts and their famed logistics. A $20 difference can't be accounted for with a 6% sales tax. And it was still cheaper than online once I added shipping.

For its part, Amazon supports the Streamlined Sales Tax project, which aims to harmonize and clarify states sales tax laws across the country.

and

“The sales tax collection is very complicated. The right place to fix this is with federal legislation.”

The law concerning use tax is un-Constitutional, that is the issue; and something that most people who do not file the use tax portion, are well aware of.

edit: what part of "No Tax or Duty shall be laid on Articles exported from any State." is unclear?

It is unconstitutional for a state to force a corporation out of state to collect sales tax, but it is certainly not unconstitutional to tax individuals in your state based on almost any concievable action the individual chooses to do.

Doesn't that only prevent the federal government from levying that tax?

Actually it is the opposite it prevents states from monkeying with interstate trade and reserves that right for the federal government.

How does refraining from collecting sales tax make Amazon look cheaper than Barnes and Noble? The sticker price doesn't factor in the sales tax; on an item-by-item comparison, the prices would look the same if B&N could match Amazon.

Based on this observation, I find the explanation that Amazon's not interested in spending the money to track state and local sales tax policies to be more plausible.

I don't think sticker price comes into play as much online. If you buy enough online, you get accustom to going through the purchasing process due to the additional price of shipping.

If B&N is calculating "Shipping + Tax" while Amazon is just calculating "Shipping" there will be a slight difference in price. And why not go with the cheapest?

I don't think sticker price comes into play as much online.

Maybe so, but go look at sticker prices of Amazon vs BN. I bet 9 out of 10 times, if not more, Amazon is cheaper at the sticker price level.

Wait if I buy an item in state Y and pay their state tax am I supposed to go back and pay state X where i live another tax on the same item? If not just have Amazon collect consumer taxes based on the state they are incorporated in and pay those back to that state. Then states would compete on corporate tax rates to attract business for the infusion of cash and the tax collection mechanism for online retailers is dramatically simplified.

Generally, use tax covers only items not taxed otherwise, so certainly no you do not owe X any sales tax if Y charged you. But this is a summary of a summary of a summary, for more details you can start at http://en.wikipedia.org/wiki/Use_tax and start following links from there, because details will certainly vary from jurisdiction to jurisdiction.

In some cases, yes depending on the state. If you buy an item in state Y and pay y% sales tax on it, then when you return to state X, sometimes you are required to pay the difference x%-y% in tax.

I am not a tax expert, but here are some examples I know of: A buddy of mine recently purchased a car while living in Texas, then moved to California a few months later and was required to pay the difference in sales tax on it before registering it.

New Hampshire doesn't have sales tax. The state of Massachusetts assumes people who reside in border towns will be purchasing goods there and automatically bills a yearly flat rate.

Considering they already handle all of the import duties and VAT for god knows how many countries, and a lot of those are product specific while sales tax almost never is, it seems likely this is just talk because they know there's no way a unform federal sales tax is ever going to replace state taxes.

yes, this is a big pain in the ass... for me. but it's a pain in the ass that I could handle. Amazon could hire 10 people who are all better than I am to work on this problem full time without causing themselves much by way of pain.

This is why I think it's about them wanting their goods to look cheaper rather than about any actual pain. If it was about the actual pain, they'd support the idea of different sales tax for every little hamlet because it raises the barrier to entry for people like me, e.g. selling my widgets myself rather than going through amazon.

Amazon doesn't pay the tax, their customers do. Connecticut requires Amazon to collect the tax from consumers then give it to the state.

I'm not sure roads is the best example to give here. Doesn't Amazon benefit from the state maintained roads since it would be difficult to get its order delivered without them?

Although as his been said, Sales Tax is usually regarded as a tax on consumer consumption rather than a tax on business which is why business to business sales are often exempt from sales taxes.

Presumably, the delivery trucks are already subsidizing the state road maintenance through gas taxes and vehicle registration fees. Still, if 100% of the sales to Connecticut residents were through affiliates I could see your point, but since that's unlikely, I view it as the states using affiliates as a loop hole to get around the 1992 Supreme Court ruling.

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