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Print 59 comment(s) - last by Alexvrb.. on Jul 2 at 10:14 PM


  (Source: Stuart Isett/The New York Times )
Amazon says these sales taxes are "unconstitutional and counterproductive"

Amazon has fully committed itself to its effort against the collection of sales taxes, and it continues to prove this dedication over and over as it cuts ties with state after state.

After cutting ties with states like Texas, where Texas State Comptroller Susan Combs charged Amazon $269 million in unpaid sales taxes, and Illinois, where Sen. Dick Durbin (D-Ill.) plans to introduce a bill that would force Amazon to collect sales tax called the Main Street Fairness Act, Amazon is now looking to turn its back on California as well after Governor Jerry Brown signed a bill that would enforce the collection of online sales tax. 

"We oppose this bill because it is unconstitutional and counterproductive," said Amazon in an e-mail to Californian affiliates. "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. As a result, we will terminate contracts with all California residents that are participants in the Amazon Associates Program as of the date (if any) that the California law becomes effective."

Amazon also noted that these sales taxes "spur job and income losses." But Amazon has to do what it feels it should do, and with this bill in place, Amazon won't think twice about cutting ties with its 10,000 California-based sales affiliates.

Amazon is the largest online retailer with more than 90 million registered buyers and $34 billion in annual sales. In recent times, it has encountered increased pressure from certain U.S. states to collect online sales taxes since the retailer's affiliates operate within those states. In addition, some U.S. states see an online sales tax on Amazon purchases as a way of digging themselves out of large state budget deficits. 

But Amazon refuses to back down. Last month, Amazon CEO Jeff Bezos said the U.S. states' demands were unconstitutional, citing a 1992 Supreme Court decision that excuses Amazon and other remote sellers from having to collect taxes in U.S. states that do not have the company's employees or warehouses operating within its borders. 

As of right now, Amazon collects taxes in Kansas, Kentucky, New York, North Dakota and Washington. In other U.S. states where Amazon does not collect sales taxes, customers are to document and pay tax on out-of-state untaxed sales, but rarely do because they either don't know about this or just don't care.

Brick-and-mortar stores like Best Buy and Wal-Mart retaliated saying that Amazon has an unfair advantage due to its lack of sales tax collection in other states.



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This article is over a month old, voting and posting comments is disabled

As always...
By Motoman on 6/30/2011 12:10:02 PM , Rating: 5
...this is exactly the correct action for Amazon to take.

When you disagree with a law in a given area, you don't get to ignore it because you don't like it. You leave.

Amazon has "left" CA. Bravo. Exactly what they should have done.

If a federal law is made that enforces sales tax collection on interstate commerce, then that's fine. Otherwise states are just going to have to figure out their own problems with use taxes...and not try to make private business fix their problems for them.

Of course, ultimately, the sales tax isn't the issue. That's not why Amazon, Newegg, Monoprice et al are wiping the floor with BBY, Wal-Mart, etc. Even in the areas where online stores have to charge sales tax, like Newegg does in NJ, they still whomp the B&M competition. Because the prices are still better, and they still provide better service and better convenience. Hence, even if the fed passed a law requiring sales tax on interstate commerce tomorrow, the status quo wouldn't even budge.




RE: As always...
By Dr of crap on 6/30/2011 12:35:24 PM , Rating: 4
MAYBE the states, mine included, should cut spending!
Radical idea, I know. If my family were short that much money we'd SPEND LESS, not look for a hand out from our neighbors.

I just find the wastefull spending that just keeps going on ridiculious, and needs to be stopped. And before you post it let me say that I'd take less help from our state if the spending were reduced. Thing is I and MY FAMILY DON'T relie on state money to survive, like some do.

I applaud Amazon for doing this.


RE: As always...
By Adonlude on 6/30/2011 2:10:48 PM , Rating: 2
How can we cut spending when we live in the entitlement society that we do? Everybody has their hand out begging for government freebies. Nobody that threatens the entitlements can get elected.


RE: As always...
By lagomorpha on 6/30/2011 3:11:51 PM , Rating: 4
Democracy isn't really sustainable in a society in which the education system has failed. We need to either find a way to force a quality education on everyone, limit voting rights to people with a reasonable grasp of math, science, and history, or give up on democracy.


RE: As always...
By geddarkstorm on 6/30/2011 3:31:26 PM , Rating: 5
It's not simply education, in the sense of factoids and raw knowledge, that's failed; it's morality and ethical foundations that are now lacking and killing our society.

And I don't mean high minded moralities/ethics, like don't drink alcohol, or wear these kind of clothes not these other kinds, etc. I'm talking about personal responsibility, compassion, consideration, patience, and a sense of the greater good instead of solely shortsighted, selfish ambition.

Welfare can be a type of compassion, but only if it is working right, where selfish people aren't feeding off of it without a care in the world; but instead using it as it was intended for temporary relief to allow job hunting and a return to productivity (that is, using it to help individuals for the greater good of society, not just their personal desires). It should be an emergency thing, not a life style, and certainly not a CULTURE as it's become in our society today. And this is part of why we're going down hill, rapidly.


RE: As always...
By lagomorpha on 6/30/2011 5:14:42 PM , Rating: 2
Well you could always tie some negative condition to receiving welfare in order to prevent it from being a self-sustaining culture. Mandatory contraception comes to mind.


RE: As always...
By kart17wins on 6/30/2011 7:41:36 PM , Rating: 2
I've always thought that a good negative condition would be that to collect welfare you have to sit with your kids in a cubicle lined warehouse for 8 hours a day (just like if you actually had a job) and do nothing. Nothing is allowed no tv, no radio, no reading material, no ipods etc. Nothing to do but listen to sniveling kids all day long.
I'll bet most people wouldn't be milking the system for long.
And for food stamps, you get bread, peanut butter and milk. We will not let you starve but we aren't going to let you buy a whatever junk you want either.


RE: As always...
By Alexvrb on 6/30/2011 10:05:00 PM , Rating: 2
They don't even use stamps anymore. They use EBT cards. A button pops up that says EBT just like the other buttons for Debit, Credit, etc. It's amazing just how much of the population is on some form of government aid.


RE: As always...
By Solandri on 7/1/2011 7:15:00 AM , Rating: 2
They're still abused. Well, I dunno if you can call it "abuse" since apparently it's completely legal to use them on non-essentials. As long as you don't turn around and try to sell what you buy.
http://www.snopes.com/photos/signs/receipt.asp


RE: As always...
By Alexvrb on 7/2/2011 10:14:31 PM , Rating: 2
Oh I am more than aware of the abuse. I wasn't saying the cards helped. In fact they make abuse even easier - now it's completely painless. Nobody would even know except you and the cashier. I personally know cases of abuse, people who technically qualify for and abuse the program, even though they don't need it. I mean shoot, they have more money than I do, a newer car, etc.


RE: As always...
By MrBungle123 on 7/1/2011 10:51:13 AM , Rating: 2
Random drug testing for ANY social services... you fail no more food stamps, HUD house, WIC vouchers, etc... if you have money for weed you have money to support yourself.


RE: As always...
By ekv on 7/2/2011 1:15:24 PM , Rating: 2
negative conditions

1) wear a sign/placard

2) have name printed in newspaper (as being on welfare)

3) be shown on TV (during the regular Government Costs Exposed segment)


RE: As always...
By Mr772 on 7/1/2011 9:50:06 AM , Rating: 2
Check yourself man the United States is a REPUBLIC!!


RE: As always...
By Reclaimer77 on 6/30/11, Rating: 0
RE: As always...
By Motoman on 6/30/2011 5:18:49 PM , Rating: 1
lol.

quote:
As I have already proven in past discussions, these taxes are 100% Unconstitutional.


I see what you did there. In the past, you've failed to argue that use taxes were "unconstitutional." Because you cant' see the difference between sales taxes and use taxes...and how use taxes don't violate interstate commerce laws.

But I'm not getting into that again - your failure on the topic is exhaustively documented here on DT. Just couldn't let you try to pull that fast one there...be a man and admit when you've failed.


RE: As always...
By Reclaimer77 on 6/30/2011 5:43:42 PM , Rating: 1
quote:
Because you cant' see the difference between sales taxes and use taxes...and how use taxes don't violate interstate commerce laws.


There is none. You never once even attempted to explain this "difference". If the "use" tax is different than sales tax, then why is the "use tax" rate exactly the same as the states sales tax, Moto? A use tax is a sales tax with a different name, it's very creation was just to go around the Constitutional constraints placed on the practice.

Moto I'm honestly surprised you are taking that position. In so many other cases you seem to 'get it', but when it comes to this fictitious "use" tax you tow the big-gov line. I don't understand...

quote:
your failure on the topic is exhaustively documented here on DT.


Wow, really? I made strong arguments with TWO major Constitutional Articles to back up my position. You're counter is "uhh you're wrong because I said so".

quote:
But I'm not getting into that again


Well tough shit, because you just DID get into it again.


RE: As always...
By Motoman on 6/30/11, Rating: -1
RE: As always...
By Reclaimer77 on 6/30/2011 8:11:04 PM , Rating: 2
quote:
if use taxes were unconstitutional as you assert, it's reasonable to assume that ONE legal case would have been proven during the past decades in which every state in the union has had use taxes.


LOL brilliant logic. You know what, I can't find one legal case this decade where someone challenged the ruling on murder being illegal. So I guess by your logic, murder is legal!

It hasn't been challenged because hundreds of millions of Americans every year happily purchase items from the Internet, and practically none of them pay this "use tax" that you claim is so legally binding. In fact, if it's on such firm Constitutional ground, why is it so unenforced? You brought up precedence, fine, but isn't enforcement also a major part of the judicial system?

If all those people were suddenly prosecuted for breaking the "law", I guaran-damn-tee you that you WOULD see challenges then! And the states are fully aware of the shaky Constitutional ground on which their "use taxes" stand.

So in short, nobody challenges it Moto because nobody ever has to pay it anyway.

quote:
If your assertion was true, somewhere, someplace, sometime, someone would have gotten a use tax declared illegal. Hasn't ever happened, and that disproves your assertion right there.


Well then someone, somewhere, would be thrown in jail or fined for buying a DVD on Amazon and not paying the "use tax". Hasn't ever happened, and that disproves your assertion of them being legally binding and Constitutional.

quote:
A use tax puts both interstate and intrastate transactions under the SAME tax burden.


Show me in the Constitution where states were granted the right to pose a tax burden on interstate transactions? It's strictly prohibited!

quote:
I know exactly what you're trying to do...you're using that very definition to claim that the use tax *is* sales tax.


You're goddamn right I'm doing it, I already have.

quote:
As noted in responses to those post you made, you were citing an inapplicable section of federal law. Didn't apply. Therefore, you made no argument.


Wrong again. The Constitution is very clear on this. The Federal Government has sole power to regulate commerce between the states. If Congress enacted the "use taxes", my argument would be nullified and I would completely agree with you. But one fact is clear, states may not arbitrarily impose taxes and other economic barriers to out-of-state trade. Period. End of story.


RE: As always...
By Motoman on 6/30/2011 11:20:01 PM , Rating: 1
And this is why I didn't want to get into it again, and this is me getting out of it. Last time I'm going to attempt to educate you on this issue - because, like Pirks, you're evidently quite mentally deficient.

You're wrong. You're not a judge, you're not a legislator, you're not a lawyer, you're nobody. You're just some crackpot on the internet. There is nothing you've said that has any "value" at all. Nothing but the rantings of a true crackpot.

I don't like taxes. Nobody does. I don't like big government. I'm not passing judgement on whether or not it's "right" to have a use tax or not. Or any other tax. I'm simply pointing out the unassailable fact that if the slightest bit of your rant was correct, I can GUARAN-DAM-TEE you that *somebody* would have sued and gotten a judgement on it in the past, oh, 70 years or so - which is how long at least the CA use tax law has been on the books.

quote:
Show me in the Constitution where states were granted the right to pose a tax burden on interstate transactions? It's strictly prohibited!


It's not a tax burden on interstate transactions, because it's not levied on the vendor. It's levied on the resident of the state, and whether or not you agree with that as being "valid" in your world or not is of no value in this world. The real world. Your fantasy has no bearing on reality.

quote:
Wrong again. The Constitution is very clear on this. The Federal Government has sole power to regulate commerce between the states. If Congress enacted the "use taxes", my argument would be nullified and I would completely agree with you. But one fact is clear, states may not arbitrarily impose taxes and other economic barriers to out-of-state trade. Period. End of story.


Not even close. The burden, as I've pointed out, is on the resident of the state...which is why it doesn't violate the constitution. There is no even vaguely conceivable doubt about that inviolable fact. Your manufactured doubt based on your own personal preference has no value.

Think about this for a second...if buying out of state all the time well and truly exempted you from having to pay any tax...sales or use...why would you EVER buy anything in-state? You'd have to be a f%cking moron to do so...and the state would be f%cking stupid to encourage you to do that.

At any rate, you've done absolutely nothing but prove that you're a catastrophic failure of a human being for continuing to insist upon your maniacal little conspiracy theory here. I'm done with you, as should anyone with more than 2 synapses to click together. You're an absolute lost cause, and are worthy of no one's attention.


RE: As always...
By Reclaimer77 on 6/30/2011 11:40:01 PM , Rating: 2
You know I like you and usually agree with you, but maybe Yash is right about you. I certainly don't see how I've earned the considerable amount of insults this post has heaped on me. I know you like playing the Internet bully on here, but you can keep dreaming if you think that's going to work on me.

quote:
It's not a tax burden on interstate transactions, because it's not levied on the vendor.


The Constitution doesn't make any distinction between a vendor or an individual. There is none. "Taxes shall not..." is an ABSOLUTE statement. Do you know what absolutes are?

quote:
Think about this for a second...if buying out of state all the time well and truly exempted you from having to pay any tax...sales or use...why would you EVER buy anything in-state?


You're losing it here. You can't mail order EVERYTHING. And if you go to another state to buy goods, you'll still be taxed by their sales taxes. What does this have to do with anything?

quote:
Not even close. The burden, as I've pointed out, is on the resident of the state...which is why it doesn't violate the constitution.


So basically a Use Tax is a clever construct to collect sales taxes, without calling them sales taxes, and loosely enforced so as to not violate the Constitution...

How does this not prove the point I'm trying to make again?

quote:
You're wrong. You're not a judge, you're not a legislator, you're not a lawyer, you're nobody.


Ah the appeal to authority argument, one of the most fallacious methods used. You are neither of these things either, this doesn't make my arguments any less worthy of being expressed. And I AM someone, thank you very much.

By the way, fyi, there are MANY healthy debates all over the Internet over this issue. But I guess they are all "mentally deficient crackpot nobodies" too. I guess they didn't know Motoman already proclaimed the debate over, because HE said so.

Let me ask you something Moto, is there a name for this private little world you live on? What happens there when I don't just run away from your little tough guy act?


RE: As always...
By Alexstarfire on 7/1/2011 12:14:34 AM , Rating: 2
Watching/reading the argument between you and him was rather interesting. It seems a bit hypocritical of him to say that you're effectively nobody and hence should be ignored. He's a nobody as well and for him to think that his way of thinking/logic is any more valuable than yours is just stupid. Being an expert in an area is one thing, but that wouldn't make what they say any less true or false. People are just more apt to listen to what they have to say since they should have more knowledge on the subject. Trying to prove his point by badmouthing you is exactly what politicians do and is why the US is in such bad shape.

Anyway, it seems to me that based on what he say a use tax is is that it's basically a way to charge sales tax without actually imposing a sales tax. He says that the whole idea behind it is to set out of state companies on the same level as in-state ones. That in itself is almost exactly why it's probably unconstitutional. A proper use tax would tax both in-state AND out-of-state companies the same precisely because it is a use tax, and not based on sales, and wouldn't be discriminatory.

The only difference in the taxes is where the burden is places. Sales tax is on the company/vendor and a use tax is on all the individual consumers. Imposing a tax on every single individual is simply retarded. There is no way you could enforce something like that on every single person. However, if the federal government wanted out-of-state companies to be taxed the same as in-state companies then they would have allowed it.

Hopefully this simple logic is easy to follow.


RE: As always...
By Motoman on 7/1/2011 9:41:08 AM , Rating: 2
You have no logic.

It's not hypocritical for me to point out that he's nobody. I'm not the one making the outlandish, wildly radical claims. Me asserting that the law of the land for the past several decades is *legal* isn't exactly an earth-shaking proclamation. It's downright boring...blindingly obvious, as it were...I might as well be claiming that water is wet. To make such a bland, boring claim requires no special credentials...

...on the other hand, extraordinary claims require extraordinary proof. For which he has none...going so far as to claim that he is the only person who ever lived in this country in more than 70 years to "see clearly" the issue that he is ranting about. Really? Wow...you must be special indeed. But he's not...he has no credentials, no facts, just a crackpot theory.

AND HERE'S THE KICKER...THE ULTIMATE PROOF THAT HE IS WRONG: If he was right about use tax being unconstitutional, he'd be the greatest hero of the American people...ever. If he was right, he'd spend the *paltry* amount of money required to file a lawsuit...apparently win it in 5 minutes, according to him, and then he would become wildly popular and wildly rich. He'd make millions on the talk show circuit. Be a best seller with a book he commissioned someone else to write about it. Get all the hot chicks he could ever possibly want. Overnight he'd be more important to the American people than Steve Jobs or Bill Gates. Schoolchildren for the rest of eternity would learn his name in history class.

But he's not done any such thing. And never will. Because he knows he's wrong. He knows he'd be laughed out of the courtroom, and have been proven to be a moron in a court of law.

He'll make some claim about how he just doesn't care to do it, blah blah. Right - because he doesn't want to be rich. Doesn't want to be famous. Doesn't want his name to ring through the halls of eternity.

If he, or you, or anyone else wanted to go and do that...and therefore become rich and famous beyond your wildest dreams...you go on and do that.

If not, STFU and GTFO because your refusal to step up to the altar and accept your fame and fortune is tantamount to an admission of stupidity.


RE: As always...
By Reclaimer77 on 7/1/2011 12:34:12 PM , Rating: 2
You lose. This is the worst reasoning I have ever seen you use. It might work on Pirks or whoever, but it's not floating with me. To claim that someone needs to alter their life and file a motion in court to argue over the Internet is absolutely fallacious and, frankly, insane.

quote:
If he was right about use tax being unconstitutional, he'd be the greatest hero of the American people


Ahaha. Most Americans have no idea "use taxes" even exist because nobody has to pay them! Hero to the people!? Motoman you have lost it. Are you even thinking this through? Nobody cares!

quote:
If not, STFU and GTFO


I'm sorry, is this 1996 all over again? I think when you need to resort to 'leetspeak' ranting of this immaturity, that pretty much tells us what well your reasoning is springing from. He was just stating his opinion, he wasn't even part of this debate really, where do you get off speaking to him this way?


RE: As always...
By lightfoot on 6/30/2011 5:47:23 PM , Rating: 1
He never said that Use Taxes were unconstitutional.

He said that it is Unconstitutional for states to force out of state entities to act as taxing agents on their behalf.

Most states already have Use Taxes, the problem is that they don't enforce them. If a state can't even collect their own revenue properly and legally how can you expect them to do anything properly or legally.

States have broad power to tax the snot out of their own residents. What they don't have the power to do is to tax entities that are outside of their borders.


RE: As always...
By Motoman on 6/30/2011 6:54:13 PM , Rating: 3
quote:
He never said that Use Taxes were unconstitutional.


Yeah he did. And he just said it again. ^^

He has actually managed to delude himself into thinking that use taxes are illegal - and he provides inapplicable federal code to "support" it (and refuses to recognize that it's inapplicable), and he ignores the fact that there's no legal precedence to uphold his claim either.

Your other points are correct though. It would seem that you fully understand the use tax, and it's legality. Reclaimer doesn't, willfully so.


High and Mighty Wal-Mart
By tng on 6/30/2011 11:00:33 AM , Rating: 3
quote:
Brick-and-mortar stores like Best Buy and Wal-Mart retaliated saying that Amazon has an unfair advantage due to its lack of sales tax collection in other states.
Wal-Mart has the guts to say this? Don't know about Best Buy, but Wal-Mart has been convicted several times of illegally selling products below cost to drive other local competing businesses out.




RE: High and Mighty Wal-Mart
By MrBungle123 on 6/30/11, Rating: 0
RE: High and Mighty Wal-Mart
By tng on 6/30/2011 11:13:26 AM , Rating: 5
Didn't know this myself until I heard about the Wal-Mart example, but it is. There are laws against selling a product at a loss to drive out the competition. Both Federal and state laws make it a criminal offense.

If you see what a Wal-Mart does to local retailers when it moves in to a community like I have, you would never shop at one again. I have watched thriving areas of shops in small towns become virtual ghost towns less than a year after a Wal-Mart moves in. Sure Wal-Mart provided 200+ jobs (most part time with no benefits), but at least that many people lost their jobs with the locals (full time mostly). Then all of the profit is no longer reinvested in the local economy, but leaves the state as well....


RE: High and Mighty Wal-Mart
By quiksilvr on 6/30/2011 11:25:54 AM , Rating: 2
I thought about this as well and I have come to this conclusion.

If other businesses wish to compete against big stores like Walmart, BAND TOGETHER and make your own super store to compete. Pool money together, make a competitive market in that town. Don't just shrug and leave. If you honestly care about it, fight it!


RE: High and Mighty Wal-Mart
By bvDrAx on 6/30/2011 11:53:07 AM , Rating: 2
Brand Source does this for smaller shops already. Co-Op buying power.


RE: High and Mighty Wal-Mart
By MrBungle123 on 6/30/2011 11:38:21 AM , Rating: 2
I try not to shop there because thats where I worked when I was in college... brings back horrible memories.

Most of the small businesses that would be taken down by walmart were mom and pop operations that were buying from walmart the next town over and just marking things up a dollar or two. Also people don't like having to goto a different store to get socks, toothpaste, and fertilizer, they do well because they sell almost everything, so really ANY big box department store would have the same effect be it Target, Fred Meyer, K-Mart, or whatever.


RE: High and Mighty Wal-Mart
By ebakke on 6/30/2011 1:16:34 PM , Rating: 4
quote:
If you see what a Wal-Mart does to local retailers
[Sigh] Wal-Mart doesn't do anything to local retailers. Consumers do.


RE: High and Mighty Wal-Mart
By Reclaimer77 on 6/30/2011 3:11:42 PM , Rating: 1
quote:
If you see what a Wal-Mart does to local retailers when it moves in to a community like I have, you would never shop at one again.


Funny, Wal-Mart opened a Superstore (finally) in my town in a previously empty grass field. Two years later there are three strip malls around that Wal-Mart with about 20 shops and restaurants. They exist only because Wal-Mart brings a surge of people that did not exist there before. So where there was once nothing, we now have commerce, economic growth, development happening etc etc.

But hey, by all means, continue your typical propagandists hatespeach about the evils of Wal-Mart and how nobody should ever shop there.

quote:
Then all of the profit is no longer reinvested in the local economy, but leaves the state as well....


What kind of bulls#$ is this? Explain to me how a mom and pop store "reinvests" more into the local economy than Wal-Mart? Do you realize how much tax revenue and growth Wal-Mart's generate? You are making no sense at all. I suppose those 200'ish employes that live locally aren't "reinvesting" locally as well?

Nope, you're right. All the money spent and generated in Wal-Mart get's sucked up into the big evil alien spaceship to fund the "take over world" campaign.

Will there ever be a time in Daily Tech when this kind of blatantly propagandists anti-business drivel doesn't rule the day?


RE: High and Mighty Wal-Mart
By abhaxus on 6/30/2011 3:59:26 PM , Rating: 2
Not that I don't agree with much of what you said, but here is an example for how local business drive more money (as a percent of their revenue) into the local economy than a company like Best Buy or Walmart. I work for a locally owned top 100 electronics retailer.

When a customer spends money at our store, money is paid to the employees at that store that sold the merchandise. The transactions are audited by people in our office (which is local), the employees' paperwork is handled by HR people in our office (which is local), the money is deposited into banks (which for our case, is a locally owned bank. I'm sure other local retailers bank with large national banks). Money is invested in new stores, which are built and remodeled by local contractors (most national chains have companies that move from town to town to build their stores). At the end of the day, ALL of the money stays local. The office people are all in my local area, instead of in a district office somewhere. The banks pay their employees with money made on our money. The contractors obviously do the same. There are of course many more examples if you dig deeper into our relationship with the local economy. In the case of Walmart or Best Buy, significant amounts of revenue do NOT stay local. Portions go to Arkansas and Minnesota. They go to shareholders. They do not stay in the local economy.

Now that said, I think you are right in many regards. But I wanted to show you an example of how buying local is indeed better than buying from large chains. In the same sense that it holds true that most people would be better served to spend more time researching their votes for local politicians than national ones.


RE: High and Mighty Wal-Mart
By lightfoot on 6/30/11, Rating: 0
RE: High and Mighty Wal-Mart
By Etsp on 6/30/2011 11:17:53 AM , Rating: 2
quote:
below cost to drive other local competing businesses out.
When the purpose of selling it below cost isn't to unload stock that isn't selling at a profit, but when its purpose is to drive competitors out.


RE: High and Mighty Wal-Mart
By amanojaku on 6/30/2011 11:50:32 AM , Rating: 2
Having just recently left a sales position, I can confirm that selling a product at a loss is a crime if it's done with the intent to hurt a competitor's business. A limited-time sale is perfectly fine, particularly when the intent is to get rid of overstock. A company that has deep pockets, however, can sell a product at a loss while making up for it with one or more successful products. This will kill the competition as consumers rarely question low prices. Once competition is gone the prices suddenly go up to what they should have been, or more.

One of our competitors pulled that stunt. "Here, try this product as a trial." Incidentally, the trial competed with our best product (which was the industry leader) and was a bolt-on to their best product. Since people bought the competitor's flagship they were interested in the bolt on, and ended up running "trials" for years. The competitor "forgot" that it provided non-terminating evals. Proving that in a court of law would be difficult, but as I used to work for the competitor I knew exactly what was going on.


RE: High and Mighty Wal-Mart
By MrBungle123 on 6/30/2011 11:56:25 AM , Rating: 2
I suppose that makes sense, but it seems like it would be one of those grey area slippery slope sort of situations.


RE: High and Mighty Wal-Mart
By Motoman on 6/30/2011 12:04:06 PM , Rating: 2
Long time.

It's called "predatory pricing" and is, and has been, illegal for as long as I can remember.

If you're creating a loss leader that's one thing...if you're being predatory with your sales-at-a-loss, which is to say you're intentionally losing money to force your competitors to lose money until they go out of business (meaning simply that the bigger business wins by default), then that's illegal.


RE: High and Mighty Wal-Mart
By generationpolitics on 6/30/2011 12:32:51 PM , Rating: 1
Actually it is a crime. Vendors set a MAP price (Minimum Advertised Price) so larger corporations such as Best Buy, Target and Walmart can't undersell the competition. However Walmart found a work around by buying products in bulk and than underselling everyone else. People either don't care or simply do know of this.

This isn't just an issue for Amazon. It is for every online eCommerce store. It may benefit the state, but it will severely hurt the economy. People should be outraged about these Online Sales Tax. I just wish it was more of a hot button issue.


RE: High and Mighty Wal-Mart
By cerx on 6/30/2011 12:52:10 PM , Rating: 2
While Walmart does buy in bulk, they generally carry "similar", but different, items than everyone else. These items are cheaper to produce, so they can be sold for less. And with their buying power, they can "force" their suppliers to lower the MAP, etc.


RE: High and Mighty Wal-Mart
By Solandri on 7/1/2011 7:33:32 AM , Rating: 2
I'll say again: Amazon does not have an unfair advantage.

- When Amazon sells things to customers in states where they have a physical presence, they collect sales tax.
- When mom and pop store sells things to customers in states where they have a physical presence, they collect sales tax.

- When Amazon sells to customers in other states, they don't collect sales tax.
- When mom and pop store sells to customers in other states, they don't collect sales tax.

It's the same for both, ergo it's fair. The cause of the disparity is not Amazon having an unfair advantage. It's the mom and pop store being put at a disadvantage by the state they're in deciding to charge enough tax to change buyer behavior. If the states really hate how local businesses are being hurt by Amazon, they have a perfectly legal remedy available to them - lower or eliminate their sales tax.

Don't get me wrong. If the Federal government decided to step up and fix the issue through some sort of national sales tax, I would be fine with it (I might not like it, but if that's what the majority decides, that's what we do). But claiming Amazon has an unfair advantage here is like complaining that Susie has lots of cookies while you have none, omitting the fact that you ate all yours already.


Silly California
By MrBungle123 on 6/30/2011 11:00:07 AM , Rating: 2
We still have a federal system and companies and people can vote with their feet and leave. This will end up costing them more than they will get out of it.




RE: Silly California
By tng on 6/30/2011 11:04:09 AM , Rating: 2
I live there and California lawmakers just can't seem to help themselves.

They have one of the worst unemployment rates in the US and they still are looking to impose more regulations, taxes and other laws that will send more businesses packing for Nevada, Utah, the Dakota's, Idaho or other state that really does look at them as good to have there and not just a cash cow.


RE: Silly California
By MrBungle123 on 6/30/2011 11:51:47 AM , Rating: 2
I'm kind of wondering if the people in California will figure it out or if they will tax themselves into oblivion. My fear is that the huge population in California will move to other states and vote in more of the same anti-business stupidity that forced them to leave in the first place.


RE: Silly California
By tng on 6/30/2011 12:35:45 PM , Rating: 2
quote:
My fear is that the huge population in California will move to other states and vote in more of the same anti-business stupidity
That is happening in Oregon and Washington now. The people that move to rural areas of the state and talk about how much better it is than CA and then try to make it just like California.


RE: Silly California
By MrBungle123 on 6/30/2011 1:22:35 PM , Rating: 2
Here in Oregon the state does whatever Portland wants to do because that is where all the population is, the rural areas get overridden in pretty much every election. Time for the state of Jefferson I say.


RE: Silly California
By tng on 6/30/2011 8:40:56 PM , Rating: 2
Yeah, know what you mean. I grew up in Klamath Falls and that has always been the case. Now I live in NorCal and it is the same way there, the Bay area and LA overrule the rest of the state.

Lets here it for the State of Jefferson....


RE: Silly California
By MrBungle123 on 7/1/2011 10:55:16 AM , Rating: 2
No way! I live in K Falls now. lol. where are you at now?


RE: Silly California
By tng on 7/2/2011 4:46:18 PM , Rating: 2
South of Sacramento, commute into the Bay Area when I am not on the road.


RE: Silly California
By KCjoker on 6/30/2011 7:29:06 PM , Rating: 2
I'll tell you what's going to happen. Soon states like Ca and Illinois will get a bailout by the federal government. Which means states that have been managing their money well will be punished because they'll be the ones paying it.


RE: Silly California
By Dorkyman on 6/30/2011 9:41:23 PM , Rating: 2
Messiah already did that a few years ago. But no more, now that the House is solid R.

Grew up in California. Sorry to see it all turn to crap, but they did it to themselves.


Tax Evasion
By PheonixD on 7/1/2011 2:44:42 AM , Rating: 2
Amazon has a history of moving their warehouse to a low-customer base state that is close to a high-customer base state for the sole reason of evading sales taxes in the states where they sell MOST of their merchandise. Al Capone was sent to jail on tax evasion charges. Why do we not charge Amazon with the same offense? To have a functioning government which creates the very business environment that Amazon benefits tremendously from requires money. Everyone should pay their fair share. All these posters complaining about taxes should move to Somalia and see if their no-government ideals really produce the kind of society they would wish to live in.




RE: Tax Evasion
By Cerin218 on 7/1/2011 1:23:25 PM , Rating: 2
I agree with you. I currently live in a state that is nearly 6 BILLION in deficit, but the answer is to raise taxes so that they can publicly fund 600 MILLION of a new Vikings stadium. So I am right there with you when you talk about how big government is careful with the tax money that they currently spend and make sure that they won't need to take more from the people because they have worked so hard to eliminate waste. You know, like the 5 BILLION we just gave Pakistan. Nothing makes me happier than working hard to raise another countries standard of living. I hear everyone whine about how others should pay their "fair share". What is their "fair share"? Is that like half of this country where people don't have to pay tax at all, even though many of that 50% consume the services that the others are paying for? Fair like that?


RE: Tax Evasion
By Reclaimer77 on 7/2/2011 8:55:21 AM , Rating: 2
You're an idiot. Amazon pays IT'S taxes. They aren't evading taxes. It's illegal, and Unconstitutional, to make Amazon and other vendors collect your taxes FOR the state. And every attempt to do so has been slapped down by a Federal judge.


RE: Tax Evasion
By mindless1 on 7/2/2011 1:47:12 PM , Rating: 2
Most businesses do this, we can't fairly penalize Amazon for trying to maximize profits when that's inherently what a (any) business seeks to do.

Logically it makes sense to position a warehouse near a large population, but outside that region if they don't need the government resources the population does.

If you don't equally make use of government services, it does not seem unreasonable to me that you shouldn't have to pay as much for them.


Amazon has a physical presence in CA
By greg_l_2 on 6/30/2011 11:07:35 AM , Rating: 2
The part you are missing is that the law in CA goes deeper than the other states affiliates laws. It also establishes a physical presence from subsidiaries. And amazon does have many subsidiary companies in CA. In fact, Amazon does actually have a big physical presence in California. Amazon's subsidiaries in CA will force it to collect the tax and not just its affiliates. Lab126 their R&D lab in Silicon Valley, IMDB based in LA, and numerous AWS data centers in Northern California are all wholly owned subsidiaries or "shell companies" that are operated by Amazon giving them a presence. . Even if they drop the affiliates they will still have to collect the tax under the law unless they uproot all of their subsidiaries which will not be that easy. They seem to be dropping the affiliates just in spite, and to try and use whatever leverage they had to attempt to prevent this from passing. Also, they will probably wind up dragging this out in the courts but eventually they will be held responsible because they do actually have a nexus in CA. This is the same argument TX is making because Amazon operates warehouses and fulfillment centers there. Even the article says they should have to collect tax where they have warehouses. Well Amazon currently has warehouses in many states where they don't collect tax (ie. Penn, TX, IN, SC, etc..) They actually have a real physical presence in 19 states but only collect in 5. This is the important part of the law and is different from the pure affiliate laws that exist in Ill, Ark, Hawaii, etc..




RE: Amazon has a physical presence in CA
By Nutzo on 6/30/2011 12:17:41 PM , Rating: 2
I hope they relocate all these subsidiaries too.

Only solution to California's spending problem is to starve the beast. Maybe then the people who keep voting in these big spending liberals will get a clue. (and yes I live out here in this broken state of California)


By mindless1 on 7/2/2011 1:51:39 PM , Rating: 2
Starving the beast has to be weighed against loss of sales. Losing CA is no small hit on Amazon, and consider that the people who shop there are a different group than tend to shop locally, they will end up buying things online from someplace else instead so CA is in the same boat.

It could turn out to be that Amazon sees more profit loss than CA from this withdrawl... except CA let the temporary sales tax hike expire so they take a hit too.


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