Amazon sues NY over Internet sales tax collection (Full Version)

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humbleinspirit -> Amazon sues NY over Internet sales tax collection (5/3/2008 8:42:10 AM)

Amazon sues NY over Internet sales tax collection

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"We are challenging the constitutionality of the recently enacted legislation in New York," Amazon spokeswoman Patricia Smith said.

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The law applies to companies that don't have a brick-and-mortar presence in New York but have at least one person in the state who works as an online agent — basically someone who links to a Web site and receives commissions for related sales.

Businesses with a physical presence in New York already collect the state sales tax on online purchases. The proposed law would apply to companies that have $10,000 or more in New York sales.



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The suit argues the change unfairly targets Amazon, is overly broad and vague, and violates the commerce clause of the constitution because it imposes tax-collection obligations on out-of-state entities.

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rlj -> RE: Amazon sues NY over Internet sales tax collection (5/3/2008 10:44:07 AM)

I believe that Amazon is in the right in this case because of a 1992 SCOTUS ruling (Quill Vs. North Dakota) that exempts out of state retailers from collecting sales tax if they have no physical presence in that state. (Here is an ok link about it)

The only way this can be changed is for Congress to change it.



humbleinspirit -> RE: Amazon sues NY over Internet sales tax collection (5/3/2008 10:59:38 AM)

Hmmm, now I know that my State has a voluntary collection practices for State returns, however how is one gonna remember if they made a some purchases and how much they paid for them though, especially if small? This could be a topic of a new thread as well.



rlj -> RE: Amazon sues NY over Internet sales tax collection (5/3/2008 11:30:19 AM)

quote:

Hmmm, now I know that my State has a voluntary collection practices for State returns, however how is one gonna remember if they made a some purchases and how much they paid for them though, especially if small? This could be a topic of a new thread as well.


I don't believe there is a way for them to individually collect from everyone. Theoretically it would be easier just to go after the big corporations who sell a whole bunch of stuff except for the 1992 ruling I posted.

This is something you might find interesting:

http://www.streamlinedsalestax.org/

It is about the Streamlined Sales Tax Project to provide uniformity in the sales tax codes of different states. The biggest problem facing online retailers in regards to tax is the number of different localities within each state and how to collect for them. Then different states have different ways of taxing. For example in New York I don't believe clothing is taxed at a state level but some communities do, in Ohio it is taxed. If I'm wrong it's just that confusing. [&:] The definitions and such need to be made less confusing.



humbleinspirit -> RE: Amazon sues NY over Internet sales tax collection (5/3/2008 11:33:37 AM)

I just meant from a moral perspective.



rcjames -> RE: Amazon sues NY over Internet sales tax collection (5/3/2008 1:55:27 PM)

quote:

ORIGINAL: humbleinspirit

I just meant from a moral perspective.


I must ask; is there a moral perspective for these taxes?


Thanks
RC



Random -> RE: Amazon sues NY over Internet sales tax collection (5/3/2008 2:15:25 PM)

quote:

ORIGINAL: humbleinspirit

Hmmm, now I know that my State has a voluntary collection practices for State returns, however how is one gonna remember if they made a some purchases and how much they paid for them though, especially if small? This could be a topic of a new thread as well.


Most, if not all, states have these taxes. If you buy things from out of state you are supposed to pay this use tax. The tax itself isn't "voluntary" but paying it almost is, since the state has no way of knowing how much to charge you. Many states have added a line to their income tax form, and even put in a "handy" table to help you estimate how much you might owe.

The reason for this is because the Quill decision makes it impossible for the state to force the retailer to collect it, so they go after you instead. That is completely legal. You are actually paying a use tax in that case, not a sales tax, but the rates are generally the same.

What is new in this situation, although I don't think it changes anything, is that NY is saying that anyone who runs a banner ad on their site for Amazon is essentially an agent of Amazon. If even one of these people live in NY, that is the link to say that Amazon has a "presence" in the state. If they have a presence in th state, they are supposed to collect sales tax.

I really don't see this going anywhere.



Random -> RE: Amazon sues NY over Internet sales tax collection (5/3/2008 2:17:27 PM)

quote:

ORIGINAL: rcjames

quote:

ORIGINAL: humbleinspirit

I just meant from a moral perspective.


I must ask; is there a moral perspective for these taxes?


Thanks
RC


Some argue that there is (I disagree). It is immoral to allow online companies like Amazon to not collect sales tax, because that gives them an unfair advantage, which helps them to put local bookstores out of business. Using an unfair advantage to force someone out of business is immoral, according to the argument.



humbleinspirit -> RE: Amazon sues NY over Internet sales tax collection (5/3/2008 2:22:31 PM)

I am all for paying these taxes, begrudgingly but either way. The only stuff that I really buy is from either Ebay or from a record club, and the occasional Christian Book, but they don't count though as they are in my State and I am already taxed on that. It just bothers me that I would have to "keep a record" of what I actually have spent is all.



rlj -> RE: Amazon sues NY over Internet sales tax collection (5/3/2008 2:57:06 PM)

quote:

It is immoral to allow online companies like Amazon to not collect sales tax, because that gives them an unfair advantage, which helps them to put local bookstores out of business. Using an unfair advantage to force someone out of business is immoral, according to the argument.


What I'm curious to know though is how many people use this to purposefully circumvent the sales tax? Almost everything that we buy online is bought because we can't find find it new at the stores or it is something old and it is used- this even goes for getting used stuff on Amazon. My in-laws who live way up in upstate New York do alot of online shopping because the best place for them to go shopping is in Syracuse about 90 minutes away or up in Canada.

The system in place now is basically on the honor system- if you buy something you should report it.

In the meantime I find it hard to type right now because I can't see through these three fingers obstructing my eyesight...



humbleinspirit -> RE: Amazon sues NY over Internet sales tax collection (5/3/2008 3:17:23 PM)

I would think that anything that is bought from another person on Ebay, if it is not done as a business deal wouldn't be taxable at all. Afterall, the person probably already paid taxes on it when they initially got it and are probably now selling it at a loss instead.



trainfan -> RE: Amazon sues NY over Internet sales tax collection (5/3/2008 4:10:37 PM)

quote:

What I'm curious to know though is how many people use this to purposefully circumvent the sales tax?


I'll preface this to say. I own my own business that has to compete heavily with the internet retailers.

There are a huge amount of people who do this and will tell me that to my face!

The on-line stores are able to purchase items by the truck load and as such buy some things well below wholesale prices which is what I have to pay. B/c they are able to buy products so cheaply they are able to sell those products at close to or below wholesale prices. In order to compete I have to keep my profit margin razor thin. It further complicates the issue when the on-line retailers throw in free shipping. People will come in look at what I am charging and say "I can pay the same price or less on-line, I don't have to pay sales tax and I get free shipping why would I buy this here?" I used to point out they were supposed to pay sales tax on their state return but usually got laughed and asked "what kind of idiot does that?" So I keep my mouth shut.

I am fully in favor of a national sales tax on all on-line sales. It would level the playing field for local retailers. Otherwise eventually all that will be left will be on-line retailers and WalMart.



Random -> RE: Amazon sues NY over Internet sales tax collection (5/3/2008 7:29:18 PM)

I've got no problem with an online national sales tax. The issue is expecting an online retailer to decipher the sales tax rates and codes of literally thousands of jurisdictions.

You can also argue that they should not pay sales tax because they are not getting any services. I would agree, to a point. But the stuff is still being delivered, so there is wear and tear on the roads, the delivery people are usually residents of that area, etc.



Random -> RE: Amazon sues NY over Internet sales tax collection (5/3/2008 7:29:53 PM)

quote:

ORIGINAL: humbleinspirit

I would think that anything that is bought from another person on Ebay, if it is not done as a business deal wouldn't be taxable at all. Afterall, the person probably already paid taxes on it when they initially got it and are probably now selling it at a loss instead.


If you buy something used, as a general rule no sales tax is owed. If you buy it new, the tax is owed.



trainfan -> RE: Amazon sues NY over Internet sales tax collection (5/3/2008 7:44:14 PM)

quote:

ORIGINAL: Random

I've got no problem with an online national sales tax. The issue is expecting an online retailer to decipher the sales tax rates and codes of literally thousands of jurisdictions.

You can also argue that they should not pay sales tax because they are not getting any services. I would agree, to a point. But the stuff is still being delivered, so there is wear and tear on the roads, the delivery people are usually residents of that area, etc.


That is why I said a national on-line sales tax. Even keeping track of it by state wouldn't be that of a big deal. Either way it is a boost for local economies since more people would buy locallyand the states would take in more in state sales taxes. The money collected by the fed could be split between the states for roads.



Random -> RE: Amazon sues NY over Internet sales tax collection (5/4/2008 6:20:46 AM)

quote:

ORIGINAL: trainfan

That is why I said a national on-line sales tax...



I know, I was agreeing with you! [:)]



45degreeN -> RE: Amazon sues NY over Internet sales tax collection (5/5/2008 1:08:24 PM)

Should we pay a sales tax on items bought over seas and shipped to our homes?

I dont think so, those items entered the US only after they were bought and if this national 'on line' sales taxes might just drive all the on line retailers our of the country. IS THIS THEIR GOAL?

Trainfan-- many of those "on-line" retailers never actually have those items in some warehouse but have them shipped from the manufacturers so that means they needn't actually have that warehouse at all. what you fail to understand is that many people would rather touch and feel what they buy and those people are unlikely to ever buy on line. The coming generation though has lost that loyalty to the touchy feelie and it will get increasingly unlikely to buy locally regardless of taxes.



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