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

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

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.

"So if you want to save the planet, feel free to drive your Hummer. Just avoid the drive thru line at McDonalds." -- Michael Asher

Most Popular Articles5 Cases for iPhone 7 and 7 iPhone Plus
September 18, 2016, 10:08 AM
No More Turtlenecks - Try Snakables
September 19, 2016, 7:44 AM
ADHD Diagnosis and Treatment in Children: Problem or Paranoia?
September 19, 2016, 5:30 AM
Walmart may get "Robot Shopping Carts?"
September 17, 2016, 6:01 AM
Automaker Porsche may expand range of Panamera Coupe design.
September 18, 2016, 11:00 AM

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki