Internet

After Crusading Against "Internet Sales Tax" Legislation, Amazon Is Now Totally Cool With It

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In a press release today, Amazon announced that it now officially supports the Marketplace Fairness Act*, which would force online retailers to become tax collectors in states where they have no physical presence, contradicting Supreme Court precedent.

"Amazon strongly supports enactment of the Enzi-Durbin-Alexander bill and will work with Congress, retailers, and the states to get this bi-partisan legislation passed," said Paul Misener, Amazon vice president, global public policy.

As Ars Technica's Nate Anderson notes, just a few months ago Amazon was still crusading against efforts by states like California to turn the online retailer into a tax collector:

"We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors," Amazon wrote in a letter this summer. "Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action."

But now the online retailer has done an about-face. "It's a win-win resolution," the press release read, "and as analysts have noted, Amazon offers customers the best prices with or without sales tax."

Perhaps those analysts also noted that fighting myriad proponents of an internet sales tax is exhausting, especially when the company's size and efficiencies would ensure that complying with any new tax legislation would be easier and less costly than for most of its competitors.

Read recent Reason coverage of internet sales tax developments here, and Veronique de Rugy's extensive treatment of the topic here.

*UPDATED: A previous version of this post erroneously referred to the legislation Amazon now supports as the "Main Street Fairness Act."

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  1. And of course Amazon having a seat at the table in hammering out the details of the bill and its enforcement are totally incidental to their support.

    Another victory for the Anti-corporate left!

    1. This sort of business shows how much our market has been replaced by corporate cronyism. Why people of any political stripe like this sort of thing is beyond me. It’s bad for almost all of us.

      1. Sure it’s bad for people as individuals. But it means more revenue and more control for the pure-hearted government employees who make sure we have hot food, shelter, clothing and sunshine every day.

        1. This crap has got to stop soon. It’s got to.

          1. We feel your pain.

            1. They called it unconstitutional, then said it was a “win-win”. Yeah, a win for statists, and a win for them. And of course, a loss for us.

              1. It’s impossible to keep your hands clean in doing business these days. The government is all-powerful and all-corrupting.

                And people wonder what’s wrong with our economy.

              2. I read the article, and I read the comments, and I weep for America’s blog commentators. I do.

          2. This crap has got to stop soon. It’s got to.

            What on Earth makes you think that? We’ve got a long way to fall yet until we hit bottom, and you know it.

            1. What the Wart sed.

            2. Europe may save us yet. By collapsing.

              1. If only we’d just let Hitler win, we’d be rich.

                1. I’m a little worried about what may happen over there if things get too awful, economically. For them, of course, but also for us. If they start shooting each other again, hard to believe we won’t get dragged into it.

                  This is aside from the substantial economic effects a European depression would have on us.

                  1. Wouldn’t a shooting war create some [JOBZ], though?

                    1. I don’t know about you, but all of this stuff gives me this weird vibe of reading a future history book, where everyone agrees that this is when Imperial America got started. Economic collapse all around, people all over inviting us to come save them with our military, and us getting authoritarian and economically weak enough to do it.

                      Fuckity fuck.

                    2. On the upside, there’ll be a lot of premium tail available for rapin’ if we have to go over there.

            3. I want the Wart to be Our Leader.
              Is there a patition or somethin?

    2. I was just going to post the same idea and found you beat to it, Hugh!

    3. And of course Amazon having a seat at the table in hammering out the details of the bill …

      Mafia strong arm politician: Hey Amazon … thats a nice business you got there … would be a shame if something bad happened to it.

  2. I heard about this last week (not in the media–at work). It sounded like Amazon already has nexus in a number of states, anyway, and it has been losing affiliates in the states that have been adopting the affiliate nexus regime. And, of course, they do kill on price competition–lower prices and lower/no shipping.

    1. I immediately wondered how many states Amazon already has “a significant presence” in.

      1. I think it’s a bundle–like maybe 15-20.

  3. They’re already on board the train–just got charged sales tax on a couple of purchases I made recently.

    1. Unfortunately for those of us who live in WA, we always get charged sales tax when buying from Amazon (itself; if the seller is through Amazon and is in another state then we don’t).

      1. We feel your pain as well, Episiarch.
        We do.

        1. Would you say that you stalk this blog, rectal, or would you say you obsessively squat at it instead? Do you have your food delivered so that you can never stop hitting refresh?

          Domino’s seems your type of garbage. Or do you just eat out of the neighbor’s garbage? That really seems your speed.

  4. Seriously, Main Street Fairness Act? What the fuck is Main Street and why does it think that making everyone pay higher prices is fair?

    1. We need sales tax to take back our money from the greedy corporations!

    2. Seeing a cute name like “Main Street Fairness Act”, or some acronym someone thought was clever, automatically tells me its bullshit. Names like Durbin attached to it are good indicators too.

      You’re a cunt, dickhead Dick Durbin.

    3. We must make things fair by eliminating the corporate welfare sales tax exemption!

    4. They wanted to call it the anti-dog-eat-dog act but someone told them not to.

      1. Not even remotely the same thing.

        1. Almost exactly the same thing. Well, close enough for government work.

    5. I think they’re referring to the merchants on Main Street who have to charge sales tax.

      1. As opposed to the ones that doesn’t have to charge sales tax? The ones that don’t exist?

      2. The merchants on main street dont have to charge a salex tax when shipping goods out of state.

        1. And actually, it isnt like anyone is avoiding the sales tax, as Im sure every state with a sales tax requires their residents to file and pay it on untaxed purchases.

    6. “Main Street” is the cute collection of stores in the center of your small town that don’t actually carry anything you want to buy when you want to buy it. They think it’s fair because levying a tax on your online purchases is a hell of a lot easier than upgrading their stores, improving their selections, hiring salespeople who aren’t crippled by either attitude or stupidity, or doing a better job of marketing and displaying their merchandise. “Main Street” is the collection of grannies who own candle, soap, and teapot shops, whose websites have said “Under Construction” since 1996.

      But Main Street wouldn’t even have to exist, really. It’s a tax. Wouldn’t matter what it was on, you’d automatically get the gub’mint behind it.

      1. You don’t seem to understand.

        If brick and mortar stores charge higher prices than Amazon they’ll continue losing business even if Amazon has to charge the same sales tax as they do.

        The problem is that brick and mortar stores actually have to charge lower prices than Amazon just to compete.

        1. May they should consider not wasting capital on bricks and mortar.

  5. Amazon – it’s been nice knowing you. Good luck in your future endeavors.

    1. Don’t be too hard on them. They did fight all of this when it first started a couple of years ago. In fact, the general feeling was that the affiliate nexus laws were unconstitutional and that Amazon, Overstock, et al. would eventually prevail.

      Frankly, I think they’re scared that they can’t win in court, because no court is going to deprive states of revenue these days.

      1. While they were fighting the good fight, I ordered from them regularly.

    2. Walmart and B&N pretty good business online, and they already have to charge sales tax.

  6. I so look forward to paying sales tax on my Kindle purchases. Because Texas obviously deserves a cut of that. And think of all the Main Street ebook vendors who will now have a level playing field!

    Fuck you, Amazon. You were one of my go-to online retail outlets, but no more.

    1. Incidentally, I’m also hearing that this law has little chance of getting enacted right now.

    2. Are you really going to give up the incredible convenience and free shipping of Amazon over this? Because I doubt you will; I know I won’t. I mean, where are you going to turn to?

      (Amazon also knows this.)

      1. You’re just a shill for the address-parsing industry.

        1. I’m doing geocoding right now, actually.

          1. Is that where you spend all day running around with your GPS only to find that the box with the logbook is up in a tree?

            1. I’m the one who chucks the logbook in the tree or on the roof.

    3. Fuck you

      I’m being serious here, so don’t abuse me with your superior sarcasm, but is “Fuck you” a libertarian axiom, like the Non-Aggression Axiom?
      Thanks.

  7. Eh. Complying with sales tax on the internet is neither difficult nor particularly expensive, even on a fairly small scale.

    1. You’re right, small businesses are already burdened with regulations and tax compliance. One more won’t kill them, right?

      Just one more… just one more…

      1. Full disclosure: I sell accounting software and related products. Two points: if you’re selling enough product on the internet to make any kind of living, you’ve already spent more on the webstore alone than the tax program will cost by at least an order of magnitude. Secondly, if you are selling anything in the state where you have nexus, you’re already forced to comply with their tax regs.
        I’m not arguing for or against sales tax, internet or otherwise. I’m just making a simple factual observation. It costs less than 35 cents per transaction to ensure that you are complying with the sales tax regs of all 50 states (unless you sell something like medical devices which have bizarre tax rules).

        1. Sales tax for all states is really easy, except for California which is a FUCKING NIGHTMARE because you have to do the sales tax in every locality.

          1. Texas is the same way. Each city, county, and school district (which could span more than one of the others) has their own sales tax program. It usually adds up to 8.25%, but knowing who gets what money is a chore.

          2. And Louisiana(which last I recall has the added bonus of individual county returns), and Iowa, and Georgia, and Wisconsin, and the Dakotas, and Illinois(a huge nightmare), and Virginia, and Colorado, and Florida. All of these states allow cities and/or counties to impose sales taxes. Some even have special districts which are always a nightmare because the boundaries are usually defined such that a local retailer can understand them, but someone halfway across the country has no clue.

            1. Yup, and the solution I’m referencing handles every single issue you’ve raised about calculation. Free markets fix lots of problems, Dave; just because you haven’t heard of the solution doesn’t mean anything about its existence.

              1. WTF? The free market isn’t fixing any human problem, it’s fixing a government problem. By wasting its time fixing government-created problems, it has less time to spend fixing other problems.

                The time you waste writing tax collection software is time not spent helping people with actual problems like cancer, cheaper energy, etc. But since you profit from a government-caused problem, it’s all good, eh?

          3. Which Walmart and B&N already do for their online sales.

            1. Wal-mart and B&N can easily afford to buy the software that is necessary to apply rates to the transactions, and to hire the team of people to file the monthly tax returns to stay in compliance.

              1. The returns do cost more, I wasn’t thinking about that. However, the per transaction cost to calculate and collect the correct tax is taken straight from the price sheet. Believe it or don’t.

        2. Complying with sales tax regulations involves more than just setting up the code.

          I’m not arguing for or against sales tax, internet or otherwise.

          Maybe not directly, but your original comment was quite clearly being dismissive of the critics of the legislation.

        3. Bullshit. You can get a simple webstore for $10 a month. I highly doubt sales tax software would cost that little (I can’t confirm it since none of the sites I checked out prior to posting actually list their prices, but generally speaking if the price isn’t given up front it’s gonna be more than $10 a month).

          1. The online processor for my recent employ wanted $500 per year just for our state.

          2. Really? Your own webstore, that you control the content, that reads your inventory, that collects payments and verifies credit card validity, and most importantly that doesn’t take a vig? I’ll just have to take your word for it.

            1. Yes Phil really. For New York:

              http://www.tax.ny.gov/pdf/publ…..pub750.pdf

              There are over 80 separate jurisdictions (cities, counties, and school districts) statewide that impose local sales and use taxes. Your return and any required schedules are also used to report, for each of these jurisdictions, the amounts of your sales and purchases by jurisdiction, and the amount of sales or use tax you owe for each jurisdiction. Therefore, you must know your gross sales and purchases, your taxable sales and purchases, the amount of tax you collected or were required to collect, and the jurisdiction in which these transactions occurred.

              In New York there are 62 counties. Within those counties there are 62 cities and 932 towns. In spite of there only being a bit more than 80 now the software has to accomodate the potential jurisdictions that could institute a sales tax sometime in the future.

              This doesn’t include keeping track of ‘tax holidays’ on certain items like clothing which will apply in some jurisdictions but not others. Throw in some odd balls like the Village of Saranac Lake which spans 3 towns and 2 counties and it starts to get really complicated.

              What it boils down to is the software is a service that needs to be updated on a regular basis.

        4. It costs less than 35 cents per transaction

          And if your margin is 34 cents per transaction?

          1. The 35 cent number is the highest rate, based on very small transaction numbers. If you’re only making 34 cents per transaction, you’d have to do 150k per year to gross $50k; the rate at that level is around 4 cents.

    2. Sicc ’em, Epi!

      1. Still smarting, huh Tulpa? You should argue about something you know nothing about with someone who knows a ton about it again, but not with me this time.

        1. I think Tulpa is rectal dont you?

          1. Wot I mean is there can be only one hater who hates Episiarch, cos Episiarch is the Truth. So the hater mus be the Devil, the Rectal, cos Episiarch is the Truth.

        2. You don’t want to go down this road with me again, pops.

          1. You were destroyed last time.

            I know enough about geocoding to:

            a. Avoid arguing with someone who knows more
            b. Judge the winner

    3. As someone who spent 9 years working in the sales tax compliance industry, you don’t have a clue what you are talking about.

      Even big companies routinely screw it up.

      My favorite sales tax district was a single shopping center in Texas. It was basically a single strip mall. Outside that one location, the regular rates applied.

      Haven’t even touched on how the same product can have different tax treatments(at the city and county level) based on where its sold.

      1. And we didn’t sell our services cheap.

      2. Also, its not just a matter of charging the right tax rate…the compliance side is all about getting the money sent back to the city, county, or state to where it should go to.

      3. As someone else who’s had to tangentially deal with SALT (in a prior job), IME Dave S is correct. And then there’s the tax holidays to keep track of, which purchases are exempt, and for what reasons…

        It’s a real bitch. Perhaps it’s easier if you’re just a retailer and rely on the buyer to figure out their SALT liability.

        1. Surprise, surprise, the free market has developed cheaper solutions.

  8. THIS IS WHAT TONY ACTUALLY BELIEVES IN.

  9. Welp, guess I’m not an Amazon customer anymore.

    Can’t say I’m surprised, but I’m still disappointed.

    1. I used to think this way. I would buy an American-made car because I did not want to feed the government with import taxes on a foreign made car. And it’s neighborly to buy local. There are no rewards for this idealism. I’ve flip-flopped on that. Now I just buy what I want at the lowest cost to me.

  10. Yo, fuck Amazon. Generally the same kind of horseshit as UPS is doing.

    Fuck the mythical “Main Street”, too.

  11. “It’s a win-win resolution,”

    Anybody that ever refers to a tax proposal as win-win is nothing but a statist fuck.

  12. OT: Stupid Central Planners

    “Winnipeg’s favourite clubhouse sandwich is on the endangered species list and could become extinct early in the new year.
    The Wagon Wheel Lunch restaurant has operated out of the Norlyn Building since 1958, but it has to move out by March. That’s when the Hargrave Street structure will meet with the wrecking ball as part of the downtown Winnipeg SHED (sports hospitality and entertainment district) plans.
    The extensive revitalization blueprints include the construction of a new hotel, a parkade, new office and retail space and a central meeting place over the next few years. There is no firm cost estimate on the massive project, but insiders say it will run well into the “hundreds of millions” of dollars.”

    http://www.winnipegfreepress.c…..16818.html

    1. Notice the stupid acronym that some idiot thought was clever.

      How do you improve “sports hospitality” when you steamroll a place that sells a fucking clubhouse sandwich that is a tradition for loyal sports fans?

  13. Well poo. Amazon gets the line’s share of my sales.

    1. Er, purchases, business, whatever.

      1. Toe the line; line’s share?

        1. That’s a bee on the pail.

      2. It’s the same, for all intensive porpoises.

  14. to turn the online retailer into a tax collector

    Yes. This is the biggest problem with a sales tax or VAT. The business becomes a proxy tax collector.
    Sales tax, at least here in CA, is very complicated.

    If calibrate customers existing flow meter, that work is not subject to sales tax. If I sell him a flow meter and calibrate it, my labor is taxable. If I put the flow meter in a box and ship it to the customer, it is taxable at the rate of its origin. If I put in my car and drive it to him, it taxable at the rate of its destination. Unless, of course, there is oil, gas, race-horse breeding stock, or one of several other exemptions involved. CA’s Board of Equalization has a table with hundreds of counties, cities, and special districts, each with it’s own sales tax rate. I’m supposed to prorate my sales among the agencies so the Board knows who to give the 1%, 0.75%, or 0.25% that’s on top of the 6% state base.

    So here’s what I think Amazon’s angle is on this. Amazon will only collect the 6% base state sales tax. Similar California based businesses will have to collect at least 1% more, and in some places, up to 2% more, depending on the origin. Amazon is ass-raping its CA competitors. NTTATWT.

  15. Eh. They know they can’t fight that shit forever — standing between the government and money is a recipe for disaster no matter who you are. They’re probably thinking this is the best deal they’re going to get in the long run.

    1. This is what came to my mind as well. No way the gov is going to leave that money on the table for very much longer. Get the best deal you can.

      Not that that makes me hate it any less.

      1. The SCOTUS should rule that interstate sales tax is a violation of the commerce clause. That was supposed to be the point of it – to make interstate commerce regular, i.e., without tariffs.

        Ain’t gonna happen, just sayin’

        1. It’s not a tariff if local producers have to pay it too.

          BTW, states are forbidden from charging duties by Article I Section 10:

          No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it’s inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress.

          so that’s clearly not the sole purpose of the Commerce Clause.

          1. Above, I was pointing out that local producers would be paying more sales tax than out-of-state producers, in CA. It’s sellers, not producers, but that lack of distinction is bearable for now.

            What your snippet says is that the revenue generated from interstate sales tax or other-named duties belongs to the feds. That’s not what the CA politicians want.

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  17. my classmate’s mother makes $87 every hour on the computer. She has been without work for 7 months but last month her income was $7500 just working on the computer for a few hours. Go to this site trunc.it/j1cy5

  18. pedro stuart? That’s it. A Scotsman’s depravity has no bounds.

  19. So now that they’re down with internet sales, will amazon now reopen or reconnect with affiliates that they closed in places like California?

  20. So now that they’re down with internet sales, will amazon now reopen or reconnect with affiliates that they closed in places like California?

    1. What the fudge was with the double posts.

  21. But now the online retailer has done an about-face.

    Okay, I’m going to open myself up to getting thumped on by Old Mexican if he sees this, and I’d deserve it. But I have to say the obvious here.

    Corporations don’t take moral stands. Only people can do that.

    Persons (employees) of Corporations are driven by entirely different motives compared to individuals. This is the sad side of the end of the One Man Company Empire days.

    Howard Hughes told congress where the bear goes in the woods. No corporation is going to do that. Because corporations are owned by “all the stock holders”, which means in effect they are owned by no one.

    Corporate employees are a little too much like government employees when push comes to shove. No corporate employee is invested in a corporation the way a single owner is invested in it.

    If Howard Hughes screwed the furry little pooch, he lost his shirt. If a CEO screws the furry little pooch, he gets a golden parachute. Upon which he can afford many, many more furry little pooches and he can just disappear onto some small tropical island paradise for the rest of his days.

  22. I seem to remember reading that Amazon had opposed California’s law specifically because they favored a uniform federal approach, as opposed to a patchwork of state laws. I’m not sure I agree with that, but I don’t see anything inconsistant in it.

    1. I could see that. Having to comply with a quiltwork of state & local regs is a nightmare as it is now.

  23. Of course Amazon likes the bill. They paln to charge it’s sellers 2.9% for the ‘work’ they do collecting, while skirting any responsibility to remit what they collect.
    They just found a new revenue stream.

  24. [grumble] Those B&Ms; that scream fairness …. So an online seller that needs to file 45 tax returns is fair when a B&M w one store and one location w one tax rate only needs to file one return? Sorry, I don’t agree.

  25. For those who were wondering about Amazon’s nexus in various states, this page has very thorough info: http://bit.ly/amazonnexus

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