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Amazon vows to continue dropping "states who pass those affiliate laws"

Taxes have become a major issue for Amazon in many U.S. states, but the online retail giant isn't afraid to turn its back on those pressuring it to collect. 

A few years back, Amazon filed a lawsuit against the state of New York because NY tried to collect taxes from out-of-state transactions through Amazon. More recently, Texas State Comptroller Susan Combs charged Amazon $269 million in unpaid sales taxes on online sales. This led to Amazon's decision to close a distribution center and cancel further plans to expand operations in the state.  

While certain states are going after Amazon mainly due to the fact that the retailer's affiliates operate within these states, and because they need a way to offset huge budget deficits, they're not the only ones who have a bone to pick with Amazon. Brick-and-mortar competitors like Best Buy and Sears also want to see the retail giant collect taxes because they see Amazon as having an unfair advantage. 

Amazon is cutting loose from more U.S. states that continuously pressure the retailer to collect taxes. For instance, Illinois just passed a new law that requires online retailers to collect taxes if they have affiliates in the state. Amazon's answer to that is to cancel affiliate programs in the state of Illinois. 

In addition, both Texas and California are considering bills that would tax online sales. Amazon made it clear that it will simply continue to drop affiliates in U.S. states if the states continue down this path. 

"We will continue to drop states who pass those affiliate laws, from the affiliate program," said Chief Executive Jeff Bezos. "In the U.S., the constitution prohibits states from interfering in interstate commerce. The sales tax collection is very complicated. The right place to fix this is with federal legislation." 



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RE: Urg
By smackababy on 5/12/2011 9:59:53 AM , Rating: 1
That isn't entirely true. States give tax breaks to companies for building there. Kia was looking to build a plant in Alabama, and the state refused to work with them. So, Kia built the plant right over the state boarder in Georgia. Jobs were potentially lost because the plant was built in another state.


RE: Urg
By Kurz on 5/12/2011 10:09:12 AM , Rating: 2
Key phrase the State refused to work with them.


RE: Urg
By LancerVI on 5/12/2011 10:24:35 AM , Rating: 5
Besides government jobs obviously, the State or any government does NOT create jobs! Period.

I hate hearing that they need to create jobs. NO! They create nothing but debt!


RE: Urg
By therealnickdanger on 5/12/2011 10:31:11 AM , Rating: 5
Even government jobs don't really count as jobs per se. As far as economic growth is concerned, government jobs do not produce wealth and profit, they only cost money in the end. It's a totally different animal than a private business or corporation. Granted, you can't have a solid functioning economic system without roads and utilities and such, but it's still only the private sector's use of those systems that truly creates jobs that create wealth that make those systems available via tax dollars.


RE: Urg
By Nutzo on 5/12/2011 10:46:22 AM , Rating: 5
+1

Government is overhead, it does not create wealth.
Just like in a private business, overhead needs to be kept to a minimum or you run out of money.


RE: Urg
By PlasmaBomb on 5/12/2011 11:17:46 AM , Rating: 4
Someone needs to tell all Governments this... they seem to have missed that memo.


RE: Urg
By gamerk2 on 5/12/11, Rating: -1
RE: Urg
By nolisi on 5/12/11, Rating: -1
RE: Urg
By AssBall on 5/12/2011 12:30:15 PM , Rating: 3
The difference is that the private sector has ongoing competition. Governments don't really have anything constantly driving them to become more efficient, unless they are at war.


RE: Urg
By yomamafor1 on 5/12/2011 12:56:19 PM , Rating: 2
Except when the private sector is rapidly reducing in size to accommodate the reduction in consumer spending, spending by government becomes important in the short run.

It is fair to say that government spending is important in the short run, but not an ideal source of job creation in the long term.


RE: Urg
By tastyratz on 5/12/2011 6:06:08 PM , Rating: 2
incorrect.
Government jobs are to provide a service to the people with which the taxpayers foot the bill. Creating more government jobs to do un-necessary tasks instead creates additional tax burden on the people who are not employed to pay it.

Since there are less tax payers the tax bill per head goes up and demand goes down. Instead of resizing per demand the government simply passes on lost taxes to those whom still pay any. The unemployed can not afford to drive on public roads and stimulate other economy.

I think what you are confusing is the lesser burden of a government job than a private sector job in the money trail. The salary is paid out of taxes, but also taxed offsetting a large chunk of that salary. The person then in turn purchases goods and services which are also taxed, and those goods and services continue along to others which keep those who create the goods and services employed and paying taxes.
Net gain however is still negative, because you are not creating more tax income than you are paying for said person, you are only temporarily slowing economic decline by buffering through our tax deficit.


RE: Urg
By michael67 on 5/13/2011 4:43:21 AM , Rating: 1
quote:
Since there are less tax payers the tax bill per head goes up


You are right on that, but what most don't get is, it also means if Amazon dose not pay its tax, the Electronics, book or what ever shop that sells the same stuff as them has to pay more tax.

Is it fair that a struggling shop that provides local jobs get to pay more tax, ware a big multinational like Amazon dose not have to pay any ???

It dose not mater if you hate government or not, you still need some government, and they run on tax.

I think Amazon should pay its share, everyone else has to pay why not them????

and yeah we all love sheep stuff, but if we save tax on it here, we pay somewhere else more, because the same amount of tax is needed anyway.
I think its just unfair that struggling John Average that runs his own local shop gets taxed, and ware a big multinational like Amazon dose not have to pay tax, because there business model uses the internet.


RE: Urg
By tastyratz on 5/13/2011 7:30:30 AM , Rating: 2
Well you are partially right. Sales tax is only at the state level, and Amazon like any other retailer online or b&m pays tax on in state local sales but not out of state sales. This applies to best buy who has an online website as well as the mom and pop store. Running a local business that does not ship out of state is a choice and relying on only that these days is a failing business model. The market has changed and mom & pop need to adapt to survive in the global economy. While the state needs to collect tax, these goods are not intended for consumption within their state.

What is not fair is the explicity targeting of the amazon cash cow. If amazon is a target so shouldn't the little guy in this instance.

Now if destination states proposed a tax for incoming goods then it would be different. While most have a tax law requiring you to declare it is barely enforced. Some sort of national database system requiring retailers to register purchases, costs, and destination would be a fair way to implement. While I am not saying lets go tax things, if they WERE to do it that would be what I think is the most fair way.


RE: Urg
By AssBall on 5/12/2011 8:32:45 PM , Rating: 2
quote:
Except when the private sector is rapidly reducing in size to accommodate the reduction in consumer spending


In a nut shell, that kind of sounds exactly like increasing efficiency to me.


RE: Urg
By Chaser on 5/12/2011 12:40:05 PM , Rating: 3
But, when government grows -as many mostly on the left feel it's not large enough even today- it takes money OUT of the private sector which then inhibits true economic growth and revenues that our country needs to stimulate and grow the real economy. The U.S. governments combined borrow 40% of the money it spends.

More government jobs stimulate the economy about as much as you do borrowing off your credit card to pay your monthly bills.


RE: Urg
By AEvangel on 5/12/2011 12:49:56 PM , Rating: 2
quote:
Keep in mind money is a creation of government, and its purpose is to make economic activity (versus barter/trade) more efficient and easily measureable. They also make economic activity possible by collecting taxes, raising a military, and protecting the people and resources of not just the consumers, but of the suppliers in the economic equation.


Really...that surprising...I guess all that Money that was around before Govt was imaginary.

How does collecting Taxes make economic activity possible?? So if we don't collect taxes then NO economic activity is happening??

Really, the only person protected by the Govt is the supplier or the the Corporation since the fundamental laws of economics already in place protect the consumer just as effectively as do any laws created by Govt.


RE: Urg
By AssBall on 5/12/2011 12:59:21 PM , Rating: 2
The "fundamental laws" of economics don't really address human nature. Without government intervention and upheld laws, I would just shoot you if I wanted your car. Maybe sue you until you are insolvent is a better modern analogy.

The whole economic system breaks down and there isn't even motivation to produce or innovate without some kind of enforced structure.


RE: Urg
By AEvangel on 5/12/2011 1:47:08 PM , Rating: 2
Yes, they do since the Fundamental Laws of economics are based on the ideals of Human Nature...they are tied together.

I agree, the system does stutter when their is not some sort of structure, but that structure would come from the Human desire to increase wealth and stability, which factors right back into the Fundamental Laws of economics under supply and demand.

Also my car or any car would have NO value if the value is consistently stripped away by your thieving or litigious ways. What would happen is the demand for protection and or legal advice would increase and perhaps the price of guns or attorneys. It's all linked together.


RE: Urg
By Skywalker123 on 5/13/2011 9:31:55 AM , Rating: 1
Money was not a creation of government.


RE: Urg
By AEvangel on 5/12/2011 1:00:49 PM , Rating: 4
quote:
Jobs are created because there is DEMAND for some good.


Correct...and as the Govt. produces no physical goods they are not a productive part of the economic system.

quote:
That demand comes from the consumer spending money.


Correct...basic supply and demand.

quote:
The consumers obtain money from a Job.


Correct

quote:
As such, any job creates economic growth. In theory, the more total wages/salaries/benefits paid out to workers, the higher economic growth [as the result of increased consumer spending]


WRONG

Govt jobs do not create economic Growth...How is this you ask simple, if the Govt hires someone for lets say $50k a year, they have to collect roughly $150k in taxes to pay for that persons salary thus removing $150k worth of income from the private sector.

quote:
Hence the fallacy of "Unions cost too much" or "government doesn't create jobs", as they create far more long term growth then someone making just over the minimum wage.


WRONG...the Govt and Unions are overhead...nothing more they do not and cannot CREATE jobs. Only the private sector or consumers can create jobs. Please refer back to supply and demand.


RE: Urg
By darckhart on 5/12/2011 2:31:58 PM , Rating: 2
quote:
Correct...and as the Govt. produces no physical goods they are not a productive part of the economic system.

WRONG. physical goods are not the only indicator of "productive part" of economic system. 1. The govt provides valuable services that enable other parts of the economic system to function. for example, judicial systems to enable IP rights. law enforcement and investigation to dissaude fraud. 2. The govt also provides tangible "products." For example, high technolgies provided by NASA free of charge to industry to allow development of consumer products.

quote:
Govt jobs do not create economic Growth...thus removing $150k worth of income from the private sector.

WRONG. I guess all that 150K x 2.8M feds (http://www.census.gov/govs/apes/) income lost to the private sector was reeeally big compared to the HUNDREDS OF BILLIONS in the private sector by AIG, insert your favorite big banks here, others, sitting in a fat cat's pocket. Get real.

quote:
Only the private sector or consumers can create jobs.

WRONG. Any time you need someone to do something and will pay them to do it, it's a job.

The fact of the matter is that you need both parts in order to have a functioning economic system.

I applaud Amazon. If states are too short sighted and don't have the ability to exercise fiscal responsibility, screw them. Close a plant and see how they like it.


RE: Urg
By The Raven on 5/12/2011 1:29:38 PM , Rating: 3
If I interperet this correctly, this makes no sense.
Jobs<-Demand<-Money<-Jobs?

You are saying that you wouldn't have a demand for food if you didn't have a job.

Demand is were it starts.
If there is no demand then there will be no jobs, money or goods made.

Demand dictates how many units of a good are needed, how many jobs are needed, and how much they will be sold at.
and possibly subsidized or taxed

If you were correct then you could take this information to all the 3rd world counties out there and easily turn them into little industrial powerhouses fueled by all the monopoly money that you would need to fund those gov't jobs with.


RE: Urg
By Ammohunt on 5/12/2011 2:52:36 PM , Rating: 1
How many poor people have you worked for?


RE: Urg
By kitonne on 5/12/2011 7:13:29 PM , Rating: 2
I've worked for a lot of poor people... Do not confuse the business with the personal wealth. The business is usually owned by a bank or shareholders (whoever came up with the investment money) while you work for a human being, who is also an employee most of the time.

The beauty of the system here in US is that you do not need to be rich to start a business and hire people - if you have a good idea, you can loan money to finance your startup, and have a chance of working on your dream with no money down.

The corrolary is that most guys who start their own business and hire others, are heavy in debt and their personal wealth is smaller then what they own. Some manage to "make it" and after many years of hard work they pay off the debt and become rich, but at that point in time in their careers, they are no longer actively hiring new people or creating new jobs - they are retired :-)

History shows that many rich people who inherit their wealth do not create any new jobs - they live off interest / dividends /business income/ and just spend the money accumulated by their forefathers, and once the money is gone, you never hear their names ever again.

Of course, there are exceptions either way, but in general, there is no link between personal wealth and job creation.


RE: Urg
By myhipsi on 5/13/2011 8:20:59 AM , Rating: 2
quote:
History shows that many rich people who inherit their wealth do not create any new jobs - they live off interest / dividends /business income/ and just spend the money accumulated by their forefathers, and once the money is gone, you never hear their names ever again.


Anybody that makes money off their investments by way of interest and/or dividends, is providing capital for economic growth. In addition to that, when they spend that money, they create demand which also helps the economy. How they got their money (short of stealing it) is inconsequential.


RE: Urg
By rcc on 5/12/2011 5:23:16 PM , Rating: 1
Let's simplify it.

Government jobs don't produce anything tangible and do not add to the GDP.


RE: Urg
By kitonne on 5/12/2011 7:20:13 PM , Rating: 2
Let's see.... Velcro, and all the other gazillion things invented by people employed by the government and now in common use, and contributing to our GDP, do not count, right?


RE: Urg
By rcc on 5/13/2011 2:54:48 PM , Rating: 2
Correct. The money came from the taxpayers, got reduced by overhead, and finally generated a product, or idea. Then a company took it productized it and started selling it, thereby raising the GDP.

It's not an easy black and white picture. But the bottom line is that the government can't do anything without money that it takes from taxpayers. (Well, it can simply print money, but that's a short term solution that adds more problems than it solves).

I have no problem with certain government programs and functions. But the government as a GDP contributor is a lot like a perpetual motion machine. It could happen some day, but the world hasn't seen it yet.


RE: Urg
By Ammohunt on 5/12/2011 2:50:56 PM , Rating: 2
Simple soultion cut bloated Governement hmmmm...where have i heard that before....


RE: Urg
By Drag0nFire on 5/12/11, Rating: 0
RE: Urg
By AEvangel on 5/12/2011 1:59:37 PM , Rating: 3
quote:
I could also remind you that the 2008 mess that got us in this place occurred because of insufficient regulation (not enough government), and has dramatically decreased wealth, profit, and economic growth.


LoL...it would be funny if you were not SOO wrong.

Keep, in mind the the wealth of this country has been slowly moved from the larger public to select few more and more each year. The only difference is increased Govt regulations.

As for the reasons for the economic collapse? They are varied, but some of the main were due to the Govt pushing for increased lending to under privileged and large amounts of money created by the BRIC nations that needed an investment opportunity.

Also the belief that some companies are too big to fail thus no risk to them. So they gamble on weird investments that payoff in the short term increasing their wealth and when the collapse happens we subsidize their loss. Since they know the Federal Reserve and the Govt will always be there to back their play.


RE: Urg
By maven81 on 5/12/2011 1:47:48 PM , Rating: 1
How do you say something so demonstratively false? Government spending most definitely creates jobs. Explain the military industrial complex? There are entire industries who's primary, or even only customer is the government. This ranges from the obvious (DOD and NASA contractors), to the less obvious (Micron PC used to have an entire subdivision which built computers only for the government).
Not only that but you forget that government spending is what created this little thing called THE INTERNET. Sheesh.


RE: Urg
By therealnickdanger on 5/12/2011 2:07:28 PM , Rating: 3
I guess you didn't see this part of my post. I give credit to government's role in providing support for the private sector.
quote:
still only the private sector's use of those systems that truly creates jobs that create wealth that make those systems available via tax dollars

The government didn't create Amazon, Google, Facebook, etc. So while the Internet started out as a government-funded project, its success and power to create massive wealth ultimately has very little to do with the government. What the Internet is today is not even recognizable compared to ye olde Internetz of the 20th century. If anything, government today is trying to stifle the growth and power of the Internet because of its ability to share ideas and information beyond their control.

Government spending is just that - SPENDING the money that private citizens EARN in the private sector. Every person working in a government field is paid by TAX dollars or dollars borrowed heavily from other countries, not some fantasy Monopoly money bank account. It's not always a bad thing - we need to spend money to maintain a military and, on occasion, support crackpot ideas like "going to the moon". ;-)


RE: Urg
By maven81 on 5/12/2011 2:51:10 PM , Rating: 1
You are splitting hairs here. Government paying someone in the private sector is still the government creating jobs. When the pols talk about creating jobs, they aren't talking about just government jobs, I'm pretty sure they mean any jobs. The government doesn't just provide support for the private sector, there are many instances where that part of the private sector only exists to serve the government.
You also don't want to admit that even government jobs create jobs because you need secondary jobs to support them... government employees need transportation, they need food, they need housing, etc. If people are working they are creating demand right? This is why studies show that even spending money on unemployment benefits creates some growth, since people throw that money right back into the system.

Yes, the government didn't create facebook and such, but they usually provide the seed that makes such things possible. They have the power to create massive investment without seeking a return. Something most businesses would never do. For example in the beginning the government was buying up something like 40-50% of the early output of the semiconductor industry. This allowed the industry to establish itself, and later thrive on it's own. But someone has to get the ball rolling.


RE: Urg
By therealnickdanger on 5/13/2011 10:21:48 AM , Rating: 2
I don't believe that we're that far off from understanding one another. Every direct government job and the jobs that get money (contractors) from the government are all paid with money collected via taxes. Even the taxes that are paid by government employees still come from tax dollars. Tax dollars come from sales taxes, income taxes, and all other sorts of added fees and taxes in life. I'm not saying it isn't worth it, but we have to be clear in our understanding of exactly where the money comes from. The wealth does not originate with the government.

Without the intense competition and ingenuity of individual citizens and corporations of citizens, most government initiatives/incentives would go no where nor been improved. Even when government seeks to build something like the space program or the Internet, at best it still only serves as a consolidator of private research and the unifyer of funds collected from private citizens.


RE: Urg
By foolsgambit11 on 5/12/2011 4:24:11 PM , Rating: 2
Those government jobs are critical to producing wealth and profit. Using the same logic, you can dismiss the entire banking sector, private shipping sector, etc. Only jobs in manufacturing, which produce real goods would be real jobs. And only when those goods were going to non-governmental sources. But that is an oversimplification. There are plenty of government projects that have had an demonstrable overall value-added contribution to the economy, and in that sense, they certainly produced wealth and profit.

The real difference between most government jobs and most private sector jobs is just the revenue source, not the value of the work done. Of course, the way revenue is collected has far-reaching implications on efficiency and productivity, but that's another issue - one that is addressed at least as far back as Adam Smith, who talked about the efficiency of toll roads and waterways versus other government projects.


RE: Urg
By borismkv on 5/12/2011 10:39:27 AM , Rating: 2
Government policies can be enacted that either attract businesses or push them away. State governments can have a lot of say in whether large companies choose to base themselves in the state or not. Having laws that make it harder for a business to make a profit tend to force businesses away from that state, and thus people lose their jobs or the potential jobs are taken to other locations. Laws that make it easier to make a profit attract businesses and in turn increase the number of jobs available. One of the biggest reasons that the US has such a high unemployment rate right now is the Federal Business Tax code is a heaping pile of horse manure. It's more profitable to base a company in Canada or Europe and conduct business in the US than it is to actually base the company in the states. After all, we can't audit and heavily tax companies that are not based in our own country and choose to shift their profits made in the US overseas to escape the world's second highest corporate tax.


RE: Urg
By Nutzo on 5/12/2011 10:40:56 AM , Rating: 2
Proving once again that government doesn't create jobs.

Give tax breaks to a company to build in a specific state does create more jobs, it just changes the location of those jobs, while reducing the overall taxes collected.


RE: Urg
By Solandri on 5/12/2011 1:12:54 PM , Rating: 2
Limited government can create jobs. e.g. Fishing. If commercial fishermen were allowed to catch as many fish as they could, they'd deplete the fishery and put themselves out of work. The government, by managing the fishery so that only a sustainable amount are caught every year, can sustain and even create more jobs. Alaska's government does a damn good job of this and it's one of the most productive fisheries in the world. New England's government failed to do this, and destroyed their centuries-old cod fishing industry.

But these types of situations are not that common (pollution mitigation is probably one of the biggest ones). Generally, excessive government destroys jobs.


RE: Urg
By rcc on 5/12/2011 5:39:42 PM , Rating: 2
Hence the descriptions of Government jobs being overhead. Done properly, just as with company management, it can enable others to remain profitable. But the money used to pay for Government jobs has to come from someone else's pockets.

The only way for a Government to theoretically generate real money is to nationalize businesses, and/or compete with them, and generate a profit (yes!, the evil 6 letter word). And we can see how well that's worked for the countries that have tried that.


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