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  (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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RE: High and Mighty Wal-Mart
By MrBungle123 on 6/30/2011 11:03:59 AM , Rating: 0
since when is selling a product at a loss a crime?


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.


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