DailyTech - Amazon Asks California Voters to Repeal New Sales Tax Law

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Internet Amazon Asks California Voters to Repeal New Sales Tax Law
Tiffany Kaiser - July 12, 2011 1:18 PM

57 comment(s) - last by Regected.. on Jul 14 at 1:35 PM

(Source: csmonitor.com)

The attorney general's office received a petition last Friday, which will require 434,000 voter signatures to qualify for the ballot

Amazon's stance on the collection of sales tax on goods sold over the internet has been clear from day one: it's not going to happen. But a new law in the state of California may change Amazon's mind real fast, or cause it to cut ties to the state.

In the recent past, we've seen the online retailer cut 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.) introduced a bill called the Main Street Fairness Act, which would force Amazon to collect sales tax.

Last month, Governor Jerry Brown signed a bill that would require websites that forward shoppers to Amazon to collect sales tax in California. The law is expected to generate $200 million in revenue, and prompted Amazon to threaten to leave California-based affiliates.

Now, Amazon is asking California voters to repeal the new law. The attorney general's office received a petition last Friday, which will require 434,000 voter signatures to qualify for the ballot. The attorney general's office will put together a title and summary for the petition.

Amazon has said that it does not have to collect sales tax because of 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 those states. But between states looking for ways to offset large financial deficits and brick-and-mortar stores like Best Buy complaining about Amazon being unfair competition, Amazon is being pushed between a rock and a hard place.

Website operators are already feeling the effect of the new law. Ken Rockwell, who operates a photography site called www.kenrockwell.com in California, said online retailers have stopped doing business with him because of the new law.

"I'm trying to figure out some other payment scheme," said Rockwell. "That business model went away. I've got to look for new business models."

Currently, Amazon only collects sales tax in Kansas, Kentucky, New York, North Dakota and Washington.

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RE: Tax for what?

By DN23 on 7/12/2011 2:32:20 PM , Rating: 3

They set up a false argument, that says that there isn't enough money so we have to raise taxes to raise revenue. What needs to happen first is that they need to stop spending so much money! We are their bosses, we give them their jobs and we pay their salaries. What they are doing is like any of us going into our boss' office demanding a raise because we have severely leveraged outselves in debt and need a raise to survive. We would not recieve the raise and neither should they!

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RE: Tax for what?

By Fracture on 7/12/2011 2:44:34 PM , Rating: 2

Roads and telephone lines existed before the internet so arguing that this additional revenue will make a difference is not just wrong, it borders on stupid.

Online commerce saves on wear and tear on roads, alleviates congestion issues, and better serves free market enterprise. Just because brick and mortar stores have to pay for their costs doesn't mean that everyone else has to. Adapt the business model to the changing environment or die.

But Amazon is right, based on the Supreme Court ruling (that was focused on mail-order companies). The company has no duty to any state to collect sales tax until federal legislation is passed to address it and laws like the one in California are unconstitutional (based on Article I, Section 8, Clause 3).

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RE: Tax for what?

By Reclaimer77 on 7/12/2011 2:56:42 PM , Rating: 3

There's a mountain of legal precedence on Amazons side. Every attempt to force a mail order (online) retailer to collect individuals taxes for a state government has been shot down by Federal Judges. As recently as this year a ruling was upheld.

Only the Federal Government has that power, not the commies in California.

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RE: Tax for what?

By Spuke on 7/13/2011 12:37:00 AM , Rating: 2

quote:
There's a mountain of legal precedence on Amazons side.

Amazon is not required to collect any state taxes in CA nor are they going to. Basically, Amazon had some third party companies that resided in CA that sell their products through Amazon. The state gov wanted Amazon to collect tax because those companies resided in CA. Well, Amazon does not have to collect taxes in CA nor can CA force them to no mater how many laws they pass. Amazon cut ties with those companies, effectively putting 125,000 people out of work (number came from state Senator George Runner who is on the state board of equalization...they collect taxes in CA...BTW, he thinks the law is asinine).

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RE: Tax for what?

By Bad-Karma on 7/13/2011 1:39:57 AM , Rating: 2

quote:
Amazon had some third party companies that resided in CA that sell their products through Amazon. The state gov wanted Amazon to collect tax because those companies resided in CA.

It goes a bit deeper than just taxing those CA resident companies. What the CA law proposes and several other states have attempted is to use the in state affiliates as a way to latch the tax onto Amazon's total company income.

That and the fact that it could be an absolute nightmare trying to calculate taxes for each state, county, and city that your product transact.

If you get mugged by a group, you don't take your wallet out and divide it out amongst the group, You hand it to the guy closest too you and they distribute it out to each other later. That's a service they provide.

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RE: Tax for what?

By lightfoot on 7/12/2011 2:51:24 PM , Rating: 4

quote:
What they are doing is like any of us going into our boss' office demanding a raise because we have severely leveraged outselves in debt

You're not thinking like a liberal. You're entitled to that raise because... um, well... you deserve it! And you'll spend the money in the economy (or China's via WalMart) instead of saving or investing it like those damned "rich" people do.

You should form a union with all your coworkers, and demand that raise that you "deserve."

If you are still denied you should protest and walkout. Under no circumstance should you ever get more skills, work harder or start your own business. If those greedy bastards don't like it, then they can just take their business to China! That'll show 'em!

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