Print 62 comment(s) - last by laviathan05.. on Mar 1 at 4:50 PM

This amount is strictly for the September-December 2012 quarter

Some U.S. states -- like California -- are starting to see new revenue from sales tax on internet purchases from the likes of Amazon.

The California Board of Equalization said it made $96.4 million in sales tax on internet commerce from September-December 2012, which is the first full quarter that the state started collecting. This is good news for the California Department of Finance, which has a forecast budget goal of $107 million in new e-taxes for the fiscal year starting July 1, 2012.

While these numbers look great for the state of California, they're a bit off from the estimates provided by a 2009 University of Tennessee study that said California would make $1.9 billion in 2012 revenue if it collected online sales tax. It also said states would miss out on $11.4 billion in 2012 revenue nationwide if they failed to collect online sales tax.

As of right now, Amazon collects sales tax in nine states (including California) and will collect in seven more over the next year.

Georgia is one the most recent to collect online sales tax. Amazon started collecting sales tax in Texas in July 2012, and California and Pennsylvania in September 2012.

Amazon has been fighting states that force it to collect sales tax for years (except in Kansas, Kentucky, New York, North Dakota and Washington). The e-tailer fled many states that attempted to force tax collection on the company, such as California and Illinois. 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, the issue swelled.

Amazon CEO Jeff Bezos said many times that his company would agree to collect taxes if there were some sort of federal legislation.

But eventually, Amazon finally broke down and started collecting sales tax in certain states, which allowed it to build more distribution centers within those states. For instance, Amazon announced that it would collect sales tax in New Jersey last May so that two Amazon distribution centers could be built. This led to faster shipping for customers, such as Amazon's same-day delivery program, making it more competitive than ever.

But earlier this month, Amazon and challenged a New York law passed in 2008, which forces companies with affiliates within the state to collect sales tax. However, Amazon said this law is unconstitutional because a 1992 Supreme Court decision said retailers that don't have a nexus of operation in a state does not need to collect sales tax. While New York said that websites with purchase buttons for Amazon as well as other national retailers are local solicitors because they receive fees for doing so, Amazon said argued that web referrals are less like solicitors or a local sales force and are more like advertising. 

Source: Reuters

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RE: Grats!
By laviathan05 on 2/20/2013 9:56:06 PM , Rating: 5
Also, care to tell us which government in the world has a positive balance sheet i.e. zero debt?

Norway, Korea, Switzerland, Sweden

Some of the world's strongest economies.

USA is the worst by the way. However, even if we had a balanced budget, we would still issue debt due to the importance of US Treasuries in the global financial system.

RE: Grats!
By tng on 2/20/2013 11:41:51 PM , Rating: 2
There are some states that run a balanced budget (Utah and Alaska come to mind), but most are not taken seriously by people in states like CA or NY who are seriously in debt.

RE: Grats!
By ClownPuncher on 2/21/2013 2:13:51 PM , Rating: 2
States like CA and NY help subsidize the Federal funding for states like AK. I'm not at all defending CA or NY, just poiting out that AK is a state that takes in more dollars than it pays "back".

RE: Grats!
By Solandri on 2/21/2013 6:45:10 PM , Rating: 2
That's almost entirely due to the progressive income tax. If you tax rich people at higher tax rates, then states with a bigger percentage of rich people pay more taxes than they receive federal funding. States with a bigger percentage of poor people receive more than they pay out.

If the poorer states tend to be conservative and are telling you they don't want the social welfare money, while the richer states tend to be liberal and say they want to give more social welfare money, and the liberals control the government and get their way, you can't really blame conservatives for the way the numbers work out.

RE: Grats!
By ClownPuncher on 2/21/2013 7:59:03 PM , Rating: 2
I wasn't blaming, just adding another detail. Alaska is a bit of a special case when you talk about taxes and revenue.

Like I said, I do not defend CA or NY. I wouldn't live in either state.

RE: Grats!
By tng on 2/22/2013 8:23:08 AM , Rating: 2
Well, I was only talking about the state finances, CA and NY are running horrible debt on a statewide level. Since I spend time in both I notice that many people in both states will tell you about how backward places like Utah are, yet ignore all the stupidity in their own backyard.

RE: Grats!
By talikarni on 2/22/2013 1:38:02 PM , Rating: 2
States like CA and NY help subsidize the Federal funding for states like AK. I'm not at all defending CA or NY, just poiting out that AK is a state that takes in more dollars than it pays "back".

That is factually false. States like CA and NY actually receive a LOT more total federal funding than they pay out. The issue comes in that many sources only show "per capita" or "per resident" which makes it look like AK gets all these massive funds. When you look at the amounts actually received per state regardless of population, CA tops the charts with over $300 Billion per year. Compare that with the "#2 per capita" state of VA that received $136 Billion, less than half that of CA. When it comes to total amount actually received, AK is actually one of the lowest with an average less than $5 Billion received per year.

When it comes to AK: due to its size, most of the federal funding is not for the people but actually maintaining and protecting its massive swaths of undeveloped pristine natural lands, that really have very little impact good or bad to or from the people, and is unable to pay anything back in the process. Money received in AK actually goes towards its designated target, unlike most blue states.
Reid has managed to get the same kind of funding to protect the deserts of Nevada, which he then routes to big corporate interests in Vegas and Reno.

If you look at the voting map, typical "blue" states tend to receive in the range of 30-50% more than "red" states, looking at overall funding amount, not "per capita" or "per resident" amounts.

RE: Grats!
By Howard on 2/21/2013 12:42:13 AM , Rating: 2
Don't forget Hong Kong.

RE: Grats!
By imaheadcase on 2/21/2013 7:21:44 AM , Rating: 3
I believe Germany just reached that goal as well.

RE: Grats!
By tayb on 2/21/2013 9:15:32 AM , Rating: 5
The US isn't the worst and it isn't even close. It's certainly a fun narrative to tell especially if you are in the business of drumming up support through fear.

Countries/Regions with a higher public debt as a percentage of GDP:

European Union
United Kingdom

There are some strong economies there, especially Germany. There isn't even enough data to support a strong correlation between debt and economic performance. Too many outliers.

Also, Norway has debt. South Korea has debt. Switzerland has debt. Sweden has debt. Essentially every aspect of your post is inaccurate.

RE: Grats!
By Solandri on 2/21/2013 1:32:51 PM , Rating: 2
Yeah, it's a lot more complex than debt is good/bad. You'd think the ideal case is to have no debt. But if you can borrow money cheaply (like you can right now with historically low interest rates), the ideal case is actually to rack up huge amounts of debt. The presumption is that the money you borrow can be used to increase your productivity above and beyond the interest you're paying, making it a net win. (In personal finance terms, it's like borrowing $100k from a bank which agrees to loan it to you at 1% interest, and putting the money into a CD which pays 3% interest. Yes you've picked up $100k in debt, but you're gaining a net 2% interest on it, making the debt a good deal.)

But in terms of raw debt figures, Japan is by far the worst off (government debt is over 2x GDP). They just haven't collapsed like Greece because the people are incredibly disciplined and hard working, and not prone to rioting. So lenders seen as much more likely to repay their debt, and don't panic at them being over 200% debt-to-income ratio.

Most of the big countries with little debt are oil-producing nations. Which should tell you something about where our economic priorities should lie.

RE: Grats!
By PontiusP on 2/21/2013 1:52:13 PM , Rating: 2
"Yeah, it's a lot more complex than debt is good/bad."

Actually, it's a bit more complex than you described. In the current world monetary system, getting out of debt is not an option. Money is a function of debt. All of the money in the world is borrowed into existence and is extinguished when it's paid off. That is, money == debt. No debt, no money. The interest the world pays is for the privilege of having the money to trade with in the first place.

It's a concept that is so prevalent, yet so few seem to grasp, even as evidenced on a message board like this with above average intelligence posters. I strongly advise watching the documentaries Money As Debt, parts I and II. They convey the concept in a straightforward manner.

Unless you are talking about monetary reform (which IMHO is *the* issue of our times), then you are not seriously considering getting out of debt. Under the current system, being debt free is a physical and mathematical impossibility.

RE: Grats!
By Solandri on 2/21/2013 2:00:05 PM , Rating: 2
In the current world monetary system, getting out of debt is not an option. Money is a function of debt. All of the money in the world is borrowed into existence and is extinguished when it's paid off.

That's not really a fair characterization of how it works.

Money is a representation of productivity. When productivity increases (via technological improvements or better distribution of goods - e.g. dairy farmer and apple farmer agree to swap milk for apples), the money supply has to be increased to keep its representation proportional to actual productivity. You increase the money supply by issuing debt, which creates more money.

Unfortunately, governments have figured out that they can create the appearance of increased productivity by increasing debt. This results in increased inflation (money is worth less). In strictly neutral terms, money is still a representation of productivity, it's just that the ratio of dollars to a fixed unit of productivity has changed.

RE: Grats!
By PontiusP on 2/21/2013 2:11:13 PM , Rating: 2

I think you are on the right track:

"You increase the money supply by issuing debt, which creates more money."

I understand how debt issuance works, and obviously so do you. Ditto for inflation.

But my problem with the current system is that money cannot exist without debt. I would prefer that money be a representation of value, for the productivity you mentioned, rather than being a liability that must be paid off. Remember, when it's paid off, it's extinguished. True, value-based money would exist perpetually, it would simply be "there" forever. Could you imagine the productivity and stability we'd see if the entire world wasn't continually obsessing over, and dedicating futile effort to, its debt burden?

I stand by my original point, no debt == no money. We need serious monetary reform. Give those documentaries I mentioned a try, it'll help explain.

RE: Grats!
By Felthis on 2/22/2013 9:30:36 AM , Rating: 2
RE: Grats!
By laviathan05 on 3/1/2013 4:50:17 PM , Rating: 2
Actually the U.S. is the worst in terms of current annual budget deficit as a percentage of GDP, which is what was being discussed. Total debt is a different story, and I never said the U.S. had the most total debt in terms of GDP. You should probably improve your reading comprehension skills.

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