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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 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.


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