Amazon joins Walmart in push for online sales tax | Hacker News Reader

Amazon joins Walmart in push for online sales tax

washingtonexaminer.com

38 pointshadronzoo38 comments

The crux of the article is this:

Amazon joins Walmart in push for online sales tax not out of some newfound concern for "marketplace fairness," but because Amazon's business model is changing in such a way that now Amazon stands to benefit from this tax.

In order to provide faster shipping, Amazon is building warehouses throughout the country. These warehouses constitute a "physical presence," which requires them to collect sales taxes, in any event. So, if Amazon is going to have to collect sales taxes under the existing "physical presence" doctrine, it may as well try to expand online sales taxes to whack its smaller competitors who don't have a 50-state network of giant warehouses.

Sigh!

I'm not sure if I'd be unhappy about paying sales tax on Amazon purchases if it meant free same-day shipping as a Prime member (or free next-day shipping for non-Prime), which is what I recall they're looking at switching to once their network of warehouses is ready.

I just want Amazon Fresh, then I never have to leave the house.

That's more or less what they're working towards. Although Safeway.com can already deliver that.

Yeah, but the online interface and experience is atrocious. Tried it a few times and it simply doesn't compare to going to the store.

As someone who uses Amazon Fresh, there are still things you want to leave the house for such as produce. Fresh has different categories for freshness, but I've found it not to mean that the produce is going to be ready to eat anytime soon.

I've found myself using Fresh for basic things, which the vast majority are on amazon's normal site.

Amazon really doesn't have any competitors in the mail order business. Any would-be competitors are partners/clients.

That businesses may use Amazon services like FBA does not mean they aren't directly competing with Amazon's B2C.

It's the same as when Wal Mart pushed for higher minimum wage. The target they argued for was below their own minimums, and it would only serve to decrease profits at other stores where they paid the actual current minimum wage.

The article doesn't mention one important historical factor. For years, Amazon was fighting to not collect taxes until more and more states started passing laws saying online retailers must collect sales tax at the behest of B&M merchants. Rather than fight a losing battle, they decided to beat those merchants at their own game: "Fine, you want us to collect sales tax? We'll build warehouses everywhere and have same day delivery instead of having warehouses in only a couple of states."

I live in NY where Amazon already collects sales tax so it doesn't really matter to me.

Takeaway: you will already be paying sales tax on your Amazon purchases in the future, and Amazon want to force other retailers to do the same in order to keep the playing field level.

That's an interesting definition of "level".

I'm not so sure this is a playing field leveling as much as it is someone who grew massively from eating a certain fruit scorching the field the fruit grows on after he's grown into a giant.

(I say this as a fan of Amazon -- I use them all the time and will continue to do so, but this is a purely shrewd corporate move and shouldn't be confused with making things fair).

So much for Amazon's risible old saw that "sales taxes vary so much among jurisdictions that calculating taxes would be an onerous burden for us". There is some business size at which that is true, but Amazon has never been that small. Lots of folks use Vertex: http://www.vertexinc.com/solutions/indirect/sales-tax.asp

Since Amazon has been growing its SaaS business for some time now one had to expect they were eventually going to want to make operating shopping cart checkout by yourself as tricky as possible. They might start lobbying municipalities to pile on the complications now that they're on the "right" side of this dispute.

I'm surprised this article made no mention of the affiliate nexus laws that have been passed over the past few years. The law was first passed in New York requiring Amazon to collect sales tax from NY customers. NY claimed Amazon's NY "associates", affiliates earning commissions for sending customers to Amazon, represented a physical nexus. Amazon agreed to collect the tax in this case, but it opted not to collect tax in other states who enacted a similar law. Instead Amazon effectively "fired" all of the affiliates living in those states. In one case Fat Wallet, a major player in the online affiliate industry, moved their company out of Illinois because they lost many of their affiliate partners. Illinois didn't gain anything and lost a source of income tax. This has been a major issue in the affiliate industry as it cuts off huge sources of revenue for affected affiliates. Amazon is pushing for the federal government to step in partly because they don't want to lose their online marketers. Secondly, they don't want to maintain a database of tens of thousands of tax jurisdictions across the country.

maintain a database of tens of thousands of tax jurisdictions across the country.

This was always a red herring. Vertex (and presumably others, although I've only worked with Vertex) already maintains this database, and will help any company calculate taxes for a reasonable fee. Corporations with far lower revenues than Amazon have been taxing in many jurisdictions for decades.

The lobbyists are going to be the death of the United States.

I can't blame Amazon though, just looking out for themselves which is the same as the rest of us do.

> The lobbyists are going to be the death of the United States.

I can't blame the lobbyists either, they're just looking out for themselves the same as the rest of us do.

I can blame the legislators. They're the ones with a monopoly on force wielded against us for their own gain.

I can't blame the legislators either, they're just looking out for themselves the same as the rest of us do.

I can blame the electorate. They're the ones granting the power and the legitimacy to the force wielded against us.

I can't blame the electorate either; they're just looking out for themselves the same as the rest of us do, because they are in fact the rest of us. There is no candidate now alive who will not rapidly succumb to the temptations of the lobbyists if given the opportunity. The problem can't be solved by voting for "good" people.

I don't know who the hell to blame. It's the system man!

I can't blame the system either - it exists because of those darned corporations, lobbyists, politicians, and the electorate.

Having just filed my taxes, and gone through the "so how much tax free stuff did you buy online?" rigmarole this would actually make my life easier. The article calls all but eBay and Overstock.com "Mom and Pop" shops. A real local store that happens to sell stuff online will actually benefit from this law. States will benefit, since this law will actually level things. The only places that will suffer are Amazon's smaller competitors, which otherwise would just turn around and try to crush the local brick and mortar small shops.

Just noting that this article is from last August.

Note that the Marketplace Fairness Act has been reintroduced in the Senate: http://www.reuters.com/article/2013/02/13/us-usa-tax-online-...

Yay for using government to blast competition to little bits!

Not that this is anything new. The government has granted a duopoly in almost all markets for cable/ internet services, and local governments are being sued for attempting to bring in their own networks.

As much as it sucks, money is power.

Bad from an environmental perspective: Mail delivery uses a fraction of the carbon of driving to the store.

Even if that's true, solving an environmental problem by applying different sales tax depending on how you buy something is wacky and undoubtedly fraught with inaccuracies and unintended consequences. A much better and more direct solution for the externality of carbon emissions is a carbon tax.

Because carbon taxes have no weird, unintended consequences.

Just because you don't like the consequences doesn't mean the carbon tax supporters don't intend them.

At least carbon taxes are better than cap'n'trade. That scheme is corruption on wheels. I actually wouldn't mind carbon taxes if I could believe that they would completely forestall cap'n'trade.

What is wrong with cap and trade? I don't have a strong understanding of the proposed law but it stands to reason that the free market would be able to find the most efficient method of reducing emissions.

I think cap and trade establishes some type of baseline ownership of pollution rights. For instance, some company who's been in business for a while, say an electrical power generation company, gets an initial allotment of credits. If they need more, they buy them from another company. If they have too many, they sell them. The corruption happens during the initial allotment, and the law will probably also be written to favor established interest who own an exchange where they will charge fees for every transaction.

A tax is just money going into the Treasury, plain and simple. Then you at least have a chance to curb corruption before the government spends it.

Well if that is the plan you might as well just raise taxes on oil and gas. It would be more direct.

The biggest criticisms I've seen so far revolve around two things:

1) Many existing polluters can't afford much of a limit, but we don't want them to go bankrupt, so every proposal offers tons of 'free' allowances, which will inevitably be allocated more by congressional pull than metrics. It also favors existing polluters and discourages new entrants, even though they may be cleaner than the existing market.

In Europe these free credits (and their unpredictability) caused the value of carbon prices to fluctuate wildly, which undermined parts of the program

2) <This criticism is stupid to me, but it gets around> - The credits will just turn into one more big derivatives market, and be engineered to obfuscate real polluting by clever gaming of the trading system.

These are definitely fixable issues, but it's reasonable to be worried that implementation may be so complicated that it has nasty unforeseen consequences, since setting up a new market and regulating it well is rarely easy.

Siblings capture much of what I mean by corruption. When the state creates new privileges and hands them out, incumbents with hundreds of lobbyists will get the lion's share. Do we really want to place e.g. Tesla at a disadvantage to BP? (You can see this at work in wireless spectrum allocation, as ATT and VZN get basically all new desirable spectrum.) Maybe society is indifferent to smaller competitors' plight in general, but this won't be good for innovation.

Another aspect, perhaps more serious, is that it would be very difficult to audit incumbent carbon producers' use of carbon credits. These aren't physical items for which you can count inventory, nor are they currency which enters and leaves the corporation via double-entry bookkeeping; they are numbers on a spreadsheet that are credited and debited based on circumstances that have yet to be defined. Corporate executives may not be perfect stewards of shareholder interest, but they've never even thought of the stakeholders for carbon credits. Europe might not have had such problems, but my feeling is that our accountants aren't as honest or diligent as theirs are, and our corporations are governed differently.

Also, for years before the introduction of cap'n'trade, large polluters will have the incentive to remain large polluters, so they get the most credits they possibly can. This is why energy lobbyists love to promote cap'n'trade, and they won't complain about a decade of lead time for it.

Yeah, I did some research and discovered I didn't know anything about it.

Whatever you think about cap and trade, it's not a free market thing.

By definition a "free market" is free of government interference. A system created by and run by the government, with mandatory participation is about as anti-free market as it gets.

If a company can't opt-out of participation then it's not a free market.

For some reason I thought it was a plan treat carbon emissions as something that could be traded. So if I have a factory and lowering my carbon emissions would cost me $5000 per ton/day and you had a different type of factory that could lower it's emissions for $1000 per ton/day I could sell you my emissions for a negotiated price (in this example, let's say we settled on $1400 per ton/day) and you can lower your emissions and I can keep chugging along. The same amount of carbon is in the atmosphere but it only cost $1400 per ton/day and you got to pocket some money to make your factory run cleaner.

I understand now that it is much more complicated than that but I like the idea of what I thought it was.

Reply on news.ycombinator.com