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This article in O'Reilly Radar asks the hypothetical question: When all of the states have passed e-fairness laws, who will be left for Amazon to fire?
Amazon already pays sales tax for states where they have a physical presence. So they just need to get rid of associate programs in any states that pass these laws.
There is an argument that Amazon should pay sales tax in all states where they sell something not just where they have a physical presence. Of course it would be hypocritical for certain people to make that argument when they have a business that sells to all states but does not collect sales tax from all states.
Excerpt from article:
.....officials "do not believe that there has been any sales tax collected as a result of the Amazon legislation."
That contradicts research conducted by the University of Tennessee, which estimated that Rhode Island would be out $132.7 million in sales tax revenue from 2007 through 2012, or 2.5% of the state's total 2007 sales tax collections. Instead of collecting more tax, Rhode Island gets less, and affiliates aren't earning as much income.
For those of you interested in the facts regarding Amazon.com's reprehensible behavior towards their Colorado affiliates, please see my take on the situation here:
It's about TAXES people. In this case, sales tax. We pay them when we pick up our dry cleaning at the corner store or buy a meal in a restaurant. We pay them when we purchase a book at the local bookstore, college bookstore or B&N.
Taxes are part of life (that and death presumably). Taxes support our American way of life and provide basic services, like...libraries anyone?
Just because we've become accustomed to buying from Amazon without paying local taxes doesn't make it right. They have an unfair advantage over brick & mortar stores and it's about time that Colorado and other states get their local governments fair share.
Someone on YouTube has this comment to the video that I thought was interesting:
I challenge you to post your state income tax returns showing where you have paid the use tax on your past Amazon and other online purchases. Certainly since you feel so strongly about it and accuse others of evading taxes, you have done so and will provide this information. Just to ensure this isnt the first year you have paid, please be sure to post a year prior to 2009 otherwise folks will say you only paid? them because of this legislation.
Sell something online to someone in Colorado? Here is what the law requires you to do if you sell so much as a bookmark to someone in Colorado:
(c) (I) EACH RETAILER THAT DOES NOT COLLECT COLORADO SALES TAX SHALL NOTIFY COLORADO PURCHASERS THAT SALES OR USE TAX IS DUE ON CERTAIN PURCHASES MADE FROM THE RETAILER AND THAT THE STATE OF COLORADO REQUIRES THE PURCHASER TO FILE A SALES OR USE TAX RETURN.
(II) FAILURE TO PROVIDE THE NOTICE REQUIRED IN SUBPARAGRAPH (I) OF THIS PARAGRAPH (c) SHALL SUBJECT THE RETAILER TO A PENALTY OF FIVE DOLLARS FOR EACH SUCH FAILURE, UNLESS THE RETAILER SHOWS REASONABLE CAUSE FOR SUCH FAILURE.
and you need to do this:
(d) (I) (A) EACH RETAILER THAT DOES NOT COLLECT COLORADO SALES TAX SHALL SEND NOTIFICATION TO ALL COLORADO PURCHASERS BY JANUARY 31 OF EACH YEAR SHOWING SUCH INFORMATION AS THE COLORADO DEPARTMENT OF REVENUE SHALL REQUIRE BY RULE AND THE TOTAL AMOUNT PAID BY THE PURCHASER FOR COLORADO PURCHASES MADE FROM THE RETAILER IN THE
PREVIOUS CALENDAR YEAR. SUCH NOTIFICATION SHALL INCLUDE, IF AVAILABLE, THE DATES OF PURCHASES, THE AMOUNTS OF EACH PURCHASE, AND THE CATEGORY OF THE PURCHASE, INCLUDING, IF KNOWN BY THE RETAILER, WHETHER THE PURCHASE IS EXEMPT OR NOT EXEMPT FROM TAXATION. THE NOTIFICATION SHALL
STATE THAT THE STATE OF COLORADO REQUIRES A SALES OR USE TAX RETURN TO BE FILED AND SALES OR USE TAX PAID ON CERTAIN COLORADO PURCHASES MADE BY THE PURCHASER FROM THE RETAILER.
(B) THE NOTIFICATION SPECIFIED IN SUB-SUBPARAGRAPH (A) OF THIS
SUBPARAGRAPH (I) SHALL BE SENT SEPARATELY TO ALL COLORADO PURCHASERS BY FIRST-CLASS MAIL AND SHALL NOT BE INCLUDED WITH ANY OTHER SHIPMENTS. THE NOTIFICATION SHALL INCLUDE THE WORDS "IMPORTANT TAX DOCUMENT ENCLOSED" ON THE EXTERIOR OF THE MAILING. THE NOTIFICATION SHALL INCLUDE THE NAME OF THE RETAILER.
I can see that is is a huge pain in the ass to do business in certain states.
now, if it were simpler and every online purchase collected 5% sales tax and each seller (yes, even eBay as the deal mediator or whatever the hell they call themselves) would remit the tax to a centralized department which would then distribute that tax back to the states (the states would fund the department) at percentages based on population then it might be easier and everyone would do it.
at least money would be collected, unlike now, when almost nobody pays tax on online sales which appears to hurt local businesses by increasing the total cost of the goods. does anyone know how much sales tax is never collected from online sales? for 2009, eBay $8 billion in sales. and Amazon had $24 billion. and what is 5 percent of $32 billion? where is my calculator? is that like $1.6 billion? just from those two sellers? is that 32 million per state? or a little less if you include DC.
but it looks like this is a burden for most businesses,,, but wow, that's a lot of money..
If there was enough of a outcry, an "interstate compact" could be negotiated and once the fifty state legislatures plus the US Congress approved it then such an interstate sales tax coordination body could be created. Such interstate panels already exist such as for regulating the use and abuse of Colorado River waters, driving infraction notifications between states, and out west for coordinating higher education within the WICHE* group. Nobody seems to want to go that route as parochial interests win out first, I guess.
Stephen Michael Kellat, MSLS
PGP KeyID: DC5A625B
* WICHE = Western Interstate Compact on Higher Education
It may on the surface seem like Amazon in being a big bully of a corporation. Sure, they are big enough, that could research all of the tax laws and put a plan into place. But what about smaller companies that sell online. I have a small art gallery here in Breckenridge. We have an online store at www.altitudegallery.com , where people from all over the country can purchase prints. However, a small store like mine doesn't have the researchers on staff to determine what the tax laws in 50 different states are. Honestly, I have a hard time keeping up with sales tax laws in Colorado, Summit County and Breckenridge. If I had to collect taxes for 50 states, it would basically put my online store out of business.
So I say, cheers to Amazon.com! Because even though at first it may seem like they are being unfair, I see them standing up for the rights of small businesses like mine.
Full piece here:
C'mon. One week after a law for tax fairness was passed at the national level, somebody--probably Mastercard/Visa, maybe Paypal--would have an online zipcode tax-rate application in place, so "research" would consist of either taking the person's credit card and having it added automatically, or--for cash & check--keying in a whole five digits on a computer.
Actually, as I should have known, those databases already exist. Wolfram Alpha will give you a zipcode's sales tax. www.zip2tax.com has a handy little calculator--put in the zip code on one side and the sale amount on the other (but by the time you enter the latter, it's already popped up the tax rate). Total number of researches needed: Enough to be able to use the web. I'll bet there are others. Heck, zip2tax even advertises on Google.
Fact is, online stores have had an unfair edge for a very long time, at the expense of local services (roads, police...oh yeah, libraries) and they don't want to give it up. The pitch used to be "don't strangle ecommerce in its cradle." That one doesn't fly any more.
Ohio is a bit of a mess in that regard. We have 88 counties. For example, if Blake visited Ohio from Western New York and entered the state by way of Conneaut on the way to Cleveland on I-90 he'd encounter three separate tax rates. Even worse, though, is the whole regime of permits and the like for actually collecting sales tax. Sales by an online retailer that could potentially happen in any of Ohio's 88 counties would require 88 separate vendor licenses and all that that entails. See http://tax.ohio.gov/faqs/Sales/sales.stm
This is an area of action ripe for an interstate compact or two. Fractured authority over sales tax makes it hard to conduct commerce.
Stephen Michael Kellat, MSLS
PGP KeyID: DC5A625B
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