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Sen. Dick Durbin (D-Ill.)  (Source: chicagotribune.com)
Senator Dick Durbin (D-Ill.) plans to introduce a bill called the Main Street Fairness Act

Amazon's war on taxes is becoming a tale as old as time. A U.S. state pushes the online retailer to collect taxes, and Amazon simply packs its bags and leaves for the next state that will leave it alone. But this time, that may not be the case.

Amazon is the largest online retailer with over 90 million registered buyers and $34 billion in annual sales. It launched in 1995, and sells everything from food, furniture and apparel to computers, electronics and toys. 

Recently, U.S. states have started pressuring Amazon to collect sales taxes on its items due to the retailer's affiliates operating within those states, and because of large state budget deficits. For example, Texas State Comptroller Susan Combs gave Amazon a $269 million bill in unpaid sales taxes, which led to Amazon's decision to close a local distribution center and cancel all plans to expand in the state of Texas. 

In another instance, Amazon won an exemption on a new sales tax law in South Carolina after saying it would pull a distribution center from the state if forced to collect. Amazon has also cancelled tens of thousands of affiliate accounts in Illinois and Colorado due to tax problems, and has brick-and-mortar chains like Best Buy and Wal-Mart breathing down its neck because of Amazon's "unfair advantage."

The unfair advantage refers to the online sales tax reprieve that was put in place awhile ago to support the then-upcoming industry of online shopping. But now that Amazon is large and in-charge, states and brick-and-mortar retail chains believe this reprieve is no longer necessary.

Now, Amazon may be in an inescapable position as Senator Dick Durbin (D-Ill.) plans to introduce a bill that will require all businesses to collect sales tax "in the state where the consumer resides." The bill is called the Main Street Fairness Act.

"This idea is overdue," said Durbin. "Online retail sales are now very fulsome and are growing at the expense of local units of government." 

Amazon argues that a Supreme Court ruling from 1992 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. In addition, Amazon notes that it currently collects taxes in Kansas, Kentucky, New York, North Dakota and Washington, and that buyers in other states where taxes are not collected are to report it themselves, though they rarely do. 

According to a University of Tennessee study, U.S. states will collectively lose $10.1 billion in uncollected sales tax revenue this year. Next year, that number is expected to jump to $11.3 billion. With many state budgets in the red, the collection of online sales tax looks to be a quick fix that they all will continuously push for.

Jeff Bezos, Amazon CEO, has said that he would prefer that the tax situation be "fixed properly" through federal legislation, and this month, he may get his wish. Durbin is gathering support from former mayors and governors who are now in Washington "weighing the budget problems back home," and the issue will go to Capitol Hill by the end of the month.

"Doing it state by state gives the Internet companies an opportunity to go shopping, to find the state that is going to treat them the best," said Durbin. "It certainly argues for a federal approach."

Jason Brewer, vice president for communications and advocacy for the Retail Industry Leaders Association, is unsurprisingly for Durbin's new bill, saying that it's only a matter of time before Amazon will be forced to collect taxes

"Ultimately, this is a battle they are going to lose, and this is about how long they can push off that day of reckoning," said Brewer. "They always claimed to support a federal solution, but they've never lifted a finger to get there."

Even if Amazon loses this battle, it really wouldn't be that bad for the online retail giant. According to analysts at Wells Fargo Securities, Amazon's products would still be cheaper than Wal-Mart or Target even if it had to collect sales tax. In fact, if Amazon had to collect sales tax, it would be 5 to 6 percent cheaper than Wal-Mart and 12 to 13 percent cheaper than Target. In addition, with a sales tax policy in place, Amazon could add new shipping centers anywhere they pleased, and could accelerate shipping time.

With prices remaining lower than brick-and-mortar retailers and items being delivered quicker than ever with cheaper shipping prices, how could Amazon lose?



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RE: B&M Changes?
By wurkfur on 6/3/2011 2:05:13 PM , Rating: 3
And on top of that, a Democrat wanting to wage additional taxes on consumers. Imagine that...


RE: B&M Changes?
By mcnabney on 6/3/2011 2:09:21 PM , Rating: 1
I know. It is much better to borrow the money from your kids.


RE: B&M Changes?
By therealnickdanger on 6/3/2011 2:14:50 PM , Rating: 3
Everyone knows it's better to introduce as much new spending as possible when in a recession, depression, or even if times are good. You should never cut spending even if you're only reducing the amount of increase. Everyone knows you can only get out of debt by spending more.

-2 - 2 = 4


RE: B&M Changes?
By Solandri on 6/3/2011 2:34:58 PM , Rating: 5
Actually, macroeconomics (economics on a national scale) does work the opposite of microeconomics (economics on an individual scale) in many cases.

The way it's supposed to work at the macroeconomic level is that the government spends more during bad economic times to stimulate the economy. But during good economic times, the government spends less so as not to overstimulate the economy. Essentially, the government should be spending during bad times, and pay for it by saving during good times.

Unfortunately, we've been doing the former, but not the latter. People who argue the macroeconomic principle of stimulus during bad economic times, suddenly switch to the microeconomic principles during good economic times ("there's lots of money, so let's spend more!"). Like a teenager with his/her first credit card, they latch on to whichever argument justifies the choice they want - to spend more - despite the economic weather.


RE: B&M Changes?
By The Raven on 6/4/2011 3:11:12 AM , Rating: 4
quote:
Like a teenager with his/her first credit card, they latch on to whichever argument justifies the choice they want - to spend more - despite the economic weather.

This is because spending more always makes the lower more populous (voting) classes happier (yeay free stuff!!) and so the politician can get reelected.
Which is why these Keynesian theories should have never been brought into the halls of our gov't.

Money should be invested, and not simply spent if you want economic growth. Last I checked "the gov't" didn't have a fat portfolio of great investments. Leave it to the many various pros in the private sector and we will see real lasting economic growth. Besides, putting all of our eggs in one gov't basket doesn't sound like a good idea, does it? Gov't intervention should be kept to a minimum. If it isn't, then we are (as we are now) at the mercy of the gov't to ensure our currency doesn't turn to crap (even more than it already has). And unfortunately for anyone solely in paper (mostly low income folks), that is not something that the gov't can do.

Who gave the gov't a credit card that taxpayers (and now their children) have to payoff? Short answer: we the people did/do every time we vote for the betterment of our personal situations instead of voting to protect economic freedom. But it seems that since the recession began people are waking up to the fact that we need to cut that card up.
quote:
The way it's supposed to work at the macroeconomic level is that the government spends more during bad economic times to stimulate the economy.

If economic times are so bad, where is that money coming from? They are either printing it or taxing for it. And neither inflation nor taxes are good for economic growth.


RE: B&M Changes?
By BansheeX on 6/4/2011 10:31:18 PM , Rating: 1
In Keynes' defense, he wanted surpluses in good times to pay for the deficits in bad times. Of course, all socialist ideas are wishful thinking doomed to fail because the power of force is too easy to abuse. That's why government powers of force need to be restricted to preventing forceful behavior in others. Force can never be a tool for "the greater good" as it will always result in the opposite.


RE: B&M Changes?
By mcnabney on 6/3/11, Rating: 0
RE: B&M Changes?
By Reclaimer77 on 6/3/2011 2:47:28 PM , Rating: 5
quote:
Taxes should be fair


Taxes, by their very nature, are unfair. Are you an educated individual at all? You'll find no such use of the word "fair" in U.S tax law, I assure you.

If States cared about "fairness", they would remove sales taxes altogether. This isn't about being fair, it's about getting as much money as they can instead of cutting budgets.


RE: B&M Changes?
By robert5c on 6/3/2011 5:13:11 PM , Rating: 3
hear hear!

coming from a state (Oregon) that doesn't charge sales tax (so really any of this wont help my B&M stores), i never understood sales tax. You already pay taxes on your income, at the federal if not also the state level, your then supposed to get taxed again when you spend that money?

this really only hurts the young and poor that can't save and spend every dime...they get taxed a second time on ~100% of their income


RE: B&M Changes?
By Reclaimer77 on 6/3/2011 5:32:57 PM , Rating: 3
quote:
You already pay taxes on your income, at the federal if not also the state level, your then supposed to get taxed again when you spend that money?


Yes and then when you die you pay "Estate Tax". They are triple dipping!


RE: B&M Changes?
By MadMan007 on 6/4/11, Rating: -1
RE: B&M Changes?
By TheDoc9 on 6/6/2011 12:06:39 PM , Rating: 1
It's even worse than that, because as that money is passed through the family it's continually taxed through sales/investment or further estate tax.

For some reason the poor lazy people with a victim mentality who want to steal from the evil rich don't see how fucked up that is.


RE: B&M Changes?
By callmeroy on 6/6/2011 2:16:31 PM , Rating: 2
yep! The Estate /Death Tax I have always thought as having no excuse but pure unbridled greed on the government level. Granted I'm no financial advisor so maybe there is a very rare case where an Estate tax does make sense from the simple view of what it is...its just pure greed to me.

I believe if you gift a certain amount to someone that is taxed as well....I forget the term for that tax, but I mean its just so ridiculous ...taxes taxes taxes....


RE: B&M Changes?
By cerx on 6/6/2011 5:04:27 PM , Rating: 2
The purpose of the "death" tax is to prevent the situation we left in England and Europe where families who "have" now will "have" forever. It's an attempt to level the playing field.


RE: B&M Changes?
By Reclaimer77 on 6/6/2011 8:23:17 PM , Rating: 2
If you think the Forefathers set out to make sure that people who "had" didn't "have forever", you're a sad individual.

Taxes were never meant to target unpopular people or business or to "level" anything. We've lost our way.


RE: B&M Changes?
By semiconshawn on 6/4/2011 1:00:36 PM , Rating: 2
Ahh Oregon. I used to love to drive down from Washington to shop. No state income tax Wash. no sales tax Ore. Pre Amazon tax free bliss.


RE: B&M Changes?
By foolsgambit11 on 6/4/2011 7:48:26 PM , Rating: 2
Sales taxes make sense because they can be targeted. Income taxes can also do that, but it is only half of the story. The government needs both tools to optimize economic growth. The government also needs to use the tools sensibly, lest they become implements of destruction. But just because they can be used wrong isn't a sufficient argument for their abolition. Neither is your (or my) personal belief that the money raised is being incorrectly used. These are collective decisions, made by our duly elected representatives, and changeable by our representatives (or by us in a referendum/proposition/initiative), if we as a whole truly think the change must be made.

Additionally, the poor don't get taxed on 100% of their income on the way out - they get taxed on substantially less than the rich, because essentials like food staples are not taxed at purchase (and are in fact generally subsidized at production to make them cheaper to buy). Since food makes up a larger percentage of their spending, they are taxed less than the rich - an example of sales tax being used in a targeted manner.


RE: B&M Changes?
By HrilL on 6/6/2011 11:50:39 AM , Rating: 2
How about get just get rid of non necessary spending? How about we have smaller government that stays out of our business and doesn't feel the need to protect people from their own retardedness? What ever happened to personal responsibility and taking care of ones self? Why should the middle class support people that don't want to work and just suck the government tit? If Oregon can get by without sales tax and lower income taxes then I'm sure every other state can as well.

If we really want the economy to turn around quickly we need to cut taxes. Cut spending and make government much much smaller. And cut out useless regulations. We also should make it so environmental groups can't file lawsuits without just cause because they're slowing or halting American innovation. We should also eliminate copyright and patents as these create artificial monopolies that also hinder innovation and create a tax on innovation. Capitalism is about competing in the market and government granted monopolies shouldn't be allowed to hinder true competition.


RE: B&M Changes?
By MeesterNid on 6/3/2011 2:18:10 PM , Rating: 5
Yeah, that or we could also try not spending the money we don't have, but whatever.


RE: B&M Changes?
By mcnabney on 6/3/2011 2:38:32 PM , Rating: 2
Good luck finding that. Hasn't happened since, well, since before the revolution.


RE: B&M Changes?
By MeesterNid on 6/3/2011 3:04:47 PM , Rating: 2
Oh, right, that means it can't be done and the only answer is to tax people more! Go it!


RE: B&M Changes?
By kerpwnt on 6/3/2011 5:40:04 PM , Rating: 2
But if our elected officials don't create new taxes or conjure up new programs, what will they do? They have to at least look busy...


RE: B&M Changes?
By Adonlude on 6/6/2011 3:07:09 PM , Rating: 2
I believe that is one of the major problems with our systems. What do lawmakers do? They make laws... constantly. If they dont make laws they don't have a career. It is simple math that the lawbooks can only grow to eternity, or to revolution.


RE: B&M Changes?
By enlil242 on 6/4/2011 12:50:47 AM , Rating: 5
Illinois State / Chicago / Cook County is the highest taxed metropolitan area in America and we STILL are billions in debt. It doesn't matter how much money they get in taxes, they'll spend more than they have anyway.


RE: B&M Changes?
By callmeroy on 6/6/2011 2:40:07 PM , Rating: 2
Your logic is sound and I agree with it...the problem is were aren't politicians, our views on the matter aren'g going to be weighed against people voting to re-elected (re: re-hire) us for our job again.

And that's the whole game of being a politician...all these social programs that so many depend on these days -- (and yes some are in legit need , but a LOT of people work the system that shouldn't get the aid they get) -- if you cut the spending all over the place then out of the wood work you have all this group and that group or this association and that association crying foul and then taking out TV spots to fling mud at you and generally doing whatever they can to kill any hopes you win your next term.

Not saying its right...just saying that's WHY politicians are scared to death to cut spending too much -- basically putting their own self interests in front of the country.

But there's several problems with our country right now...

1) We are in fact, becoming a nation of sissies. The "PC" culture, handle every creed, ethinicity , etc. with kid gloves, being afraid to enforce the concept of "You are responsible for your own actions"....that is killing us in more ways than one and apparently no one gives a rat's arse about it.

2) Banks. I think they finally learned their lesson from the fiasco meltdown that hit the boiling point back in 2008..but it should have NEVER gotten as bad as it did or is now. Lending standards have to be high, there has to be PROOF that you can REALISTICALLY pay back that which you borrow. I know how this killed us more than many -- I worked at one of th top 30 mortgage banks in the country that was killed due to the collapse in '08. I've seen people approve purely crap loans and not think twice about it. (Btw, I wasn't one of those approving loans, I was in IT)

3) Probably the hardest , but yet most imporant compoment is simply CONFIDENCE. Both with businesses to invest, expand and hire and consumers to SPEND. And yes I said it .. SPEND. But the assumption of this point is -- SPEND on what you HONESTLY can afford, but still SPEND!

If you are unemployed for instance...you aren't one of the people I'm talking about to spend spend spend now...but if you are fortunate to be doing ok now...you really want to help the economy -- back with your confidence and spend.

And btw I have put money were my mouth is on this one...I've been renovating my condo for almost the past year now...so far $20k spent. Plus I bought a new car...so I have definitely contributed my part as a consumer...that's for damn sure. :)

4) Then its government...they have to man up...do some cuts even where it will be controversial...tough times call for tough measures...


RE: B&M Changes?
By Arsynic on 6/3/2011 3:46:16 PM , Rating: 5
You can borrow money from your kids or stop spending so goddam much.

I swear a Democrat could be eye deep in debt and still apply for more credit cards and when you tell them that they shouldn't, they cry, "Well you want me to steal the money from my kids?"

No, motherfucker, stop spending so damn much!


RE: B&M Changes?
By AssBall on 6/3/2011 4:30:41 PM , Rating: 2
And one from one of the most highly mismanaged and financially corrupt states in the country, Illinois, to boot. Shocker.


RE: B&M Changes?
By guffwd13 on 6/3/2011 2:20:54 PM , Rating: 4
wow, really. funny how one's political affiliation changes one's perspective on a subject.

my thoughts were: what's a democrat doing defending businesses? but you're right, this is clearly a democrat trying to extort more money from hard working citiz-

oh wait, this is a tax thats already required to be paid by law! this isn't a new tax dumbass, its to replace the use tax. it wouldn't be in addition to it!


RE: B&M Changes?
By Reclaimer77 on 6/3/2011 2:40:39 PM , Rating: 1
quote:
my thoughts were: what's a democrat doing defending businesses?


Because they paid him to do it. I bet we'll see "campaign contributions" from Wal Mart and Best Buy go Mr Durbin's way next election year.

quote:
oh wait, this is a tax thats already required to be paid by law! this isn't a new tax dumbass, its to replace the use tax. it wouldn't be in addition to it!


The Constitution specifically prohibits the Federal Government from doing this though. Not that a Democrat, especially Dick Durbin, cares.


RE: B&M Changes?
By phantom505 on 6/3/11, Rating: -1
RE: B&M Changes?
By Reclaimer77 on 6/3/2011 4:19:14 PM , Rating: 5
quote:
Not only is this permitted by the constitution it is expressly written in it.


Article One, Section Nine of the Constitution of the United States says "No Tax or Duty shall be laid on Articles exported from any State."


RE: B&M Changes?
By Reclaimer77 on 6/3/2011 4:21:13 PM , Rating: 3
footnote:

Besides being wholly unconstitutional, the proposed bill usurps the rightful authority of states, not the federal government, to levy and collect state sales taxes.


RE: B&M Changes?
By yomamafor1 on 6/3/11, Rating: 0
RE: B&M Changes?
By Reclaimer77 on 6/4/2011 3:47:04 PM , Rating: 3
That's a pointless interpretation.

quote:
This clause was not written to encourage citizens to purchase goods from other states in order to avoid state tax.


What kind of logic is this? Of course it wasn't written for that, because there wasn't supposed to BE a sales tax on interstate goods in the first place! Hello? This is why "use" taxes were created, because calling them sales taxes (which they really are) is UNCONSTITUTIONAL!

Claiming that, at some point, a major Article to the Constitution got too old and doesn't apply so just ignore it, is dangerous and foolish thinking. If you want to change or update the Constitution, fine, they Forefathers built an Amendments system into the document. You aren't supposed to just shrug it off and go ahead and do anything you want or just ignore the thing completely.


RE: B&M Changes?
By foolsgambit11 on 6/4/2011 8:05:47 PM , Rating: 1
And this isn't technically breaking that clause. That clause is a limit on the power of Congress to collect taxes, but this isn't Congress collecting a tax. This is Congress clarifying whether sellers are required to collect state taxes on purchases made across state lines, and for whom they are collecting said tax. When the Supreme Court last ruled on interstate commerce tax collection in Quill (1992), it explicitly stated that, while North Dakota couldn't compel an out-of-state retailer to collect sales tax, "The underlying issue here is one that Congress may be better qualified to resolve, and one that it has the ultimate power to resolve." In other words, it explicitly stated that Congress could do exactly what this bill proposes. That is in theory, at least. In practice, depending on the implementation, the Supreme Court could still find it an overwhelming burden on interstate commerce, considering differing tax rates and definitions of taxable items, etc.


RE: B&M Changes?
By foolsgambit11 on 6/6/2011 2:10:58 AM , Rating: 2
Hooray rate down without explanation! But that's not why I'm posting....

To clarify further, Congress certainly has the power to regulate interstate commerce - Article I, Section 8, paragraph 3. While people may take issue with some laws justified under the commerce clause, this one should be pretty cut and dry, and clearly within the Framers' intent, without resorting to penumbras and emanations (to borrow a well-worn phrase). This is clearly about regulating interstate commerce, and not about regulating some tangentially related thing (e.g. gas mileage for vehicles) by using the commerce clause as a justification. Even the strictest interpretation of the Constitution would allow Congress to regulate in this area - as long as Congress itself isn't laying or collecting a tax, which they clearly aren't.


RE: B&M Changes?
By foolsgambit11 on 6/6/2011 2:23:02 AM , Rating: 2
Additionally (boy, I should have planned this all out in one post), Article IV, Section 1 applies here. "Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records and Proceedings shall be proved, and the Effect thereof." In this context, that would mean that each State would have to respect the sales tax (an Act of a State) of other States, with Congress determining the implementation (effect) across State borders.


RE: B&M Changes?
By Reclaimer77 on 6/6/2011 8:28:23 PM , Rating: 2
quote:
Hooray rate down without explanation!


Because you are wrong and are pushing a bad position. I posted proof, in black and white no-uncertain terms. Your counter has been nothing but shaky interpretation after interpretation. You would make an excellent Supreme Court justice, sir.

The argument isn't if Congress can "regulate" this. Congress telling Amazon it has to ensure sales taxes are collected for every state is the crux of the issue here. And that's most certainly Unconstitutional. I'm fully aware that the goddamned "commerce" clause in modern times has been used to pass everything under the sun. But technically taxing Internet purchases are Unconstitutional as well.


RE: B&M Changes?
By foolsgambit11 on 8/21/2011 1:37:02 AM , Rating: 2
No, you posted a faulty interpretation of Article 1, Section 9. In this context, the Supreme Court has ruled that "export" explicitly means export to a foreign country, not to another State in the Union. See, for example, Dooley v US (1901), which states that taxes can be levied on goods shipped to Puerto Rico, because it isn't a foreign country.

Additionally, the court has set a pretty tight rule on what constitutes a tax on an export, essentially stating that if the tax doesn't explicitly target exports, then it isn't a violation of this rule; so even if the Supreme Court were to reverse its long-standing interpretation of this clause on the definition of "exports", it would also have to revise its definition of a "tax on exports".

Finally, again, where the Supreme Court has ruled against interstate tax collection (see National Bellas Hess v. Illinois, where it overturned a State law on interstate tax collection), it has explicitly stated that it was because this power is reserved for Congress - which again sets the precedent that it is within Congress' powers to regulate in this area.


RE: B&M Changes?
By SilthDraeth on 6/3/2011 10:25:02 PM , Rating: 2
You just got owned!


RE: B&M Changes?
By ekv on 6/3/2011 2:43:50 PM , Rating: 2
Ah, so Federal gov't usurping State's rights again, eh?


RE: B&M Changes?
By mattclary on 6/3/2011 3:00:02 PM , Rating: 1
Actually, as much as I hate taxes, this is the ONE area where the feds are explicitly granted authority.

THIS is interstate commerce, in a way that abortion and so many other subjects are not.

I have a small computer business and buy lots of stuff from Newegg. Personally, it would make my life a lot easier if Newegg charged sales tax.


RE: B&M Changes?
By ekv on 6/3/2011 3:12:47 PM , Rating: 1
Do not forget State's will levy taxes and counties will levy taxes. Interstate Commerce is highly overused and abused. Trying to over-ride State's rights in the realm of taxes will go down about as well as ObamaCare. [26 and counting]

http://topnews.us/content/232979-petitioning-state...

Newegg has never failed to charge me sales tax. If they don't charge you, they are quite accommodating. For your business account you may ask them to add sales tax. You do have a business account, no? 8)


RE: B&M Changes?
By mattclary on 6/3/2011 3:24:03 PM , Rating: 2
Like Amazon, Newegg charges taxes in some states where they have a presence. I'm in Florida, and they don't here.

And as I alluded in my post, yes, I fully agree that the interstate commerce clause has been raped like a 90lb dude in a super-max. But in this instance, I think they are spot on.


RE: B&M Changes?
By kerpwnt on 6/3/2011 5:50:25 PM , Rating: 2
Amazon is a strange beast. Amazon has warehouses where I live, in NV, but they don't charge me tax on stuff I order. However, I don't think they have ever shipped anything from a warehouse in my state. Maybe the story would change if they did. Either way, I'm pretty sure they should be charging me taxes on my orders.


RE: B&M Changes?
By Reclaimer77 on 6/3/2011 3:23:09 PM , Rating: 1
No you're wrong. The Fed does NOT have authority to bind Amazon into collecting sales taxes for the states. That is extremely Unconstitutional.


RE: B&M Changes?
By mattclary on 6/3/2011 3:24:44 PM , Rating: 2
I agree to disagree.


RE: B&M Changes?
By Reclaimer77 on 6/3/2011 4:17:49 PM , Rating: 1
quote:
I agree to disagree.


Are you just saying that because, or have you actually researched and understood the scope and legality of this proposal? I'm betting the former.

I could quote the exact Articles that this law would break, as well as many smaller ones that also become an issue if this goes into effect. But I have a feeling I would be wasting my time.


RE: B&M Changes?
By The Raven on 6/4/2011 3:20:54 AM , Rating: 2
quote:
THIS is interstate commerce, in a way that abortion and so many other subjects are not.

Just wait until Amazon starts selling home abortion kits ;-P


RE: B&M Changes?
By phantom505 on 6/3/11, Rating: 0
"This week I got an iPhone. This weekend I got four chargers so I can keep it charged everywhere I go and a land line so I can actually make phone calls." -- Facebook CEO Mark Zuckerberg














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