Amazon dropping 10,000 affiliates in California

[her209]

I'm sure Amazon pays any sort of taxes they are required to for that part of their business. You can be sure that Amazon has structured this particular business entity separately from the main amazon.com business.

Whether or not that is a loophole and legal or illegal is probably up to the courts and/or the laws on the books.

We're Amazon, but we're not really Amazon.

 

[abaez]

We're Amazon, but we're not really Amazon.

Pretty much. Just like all of those shell companies in Antigua and all those places where GE gets around paying a bunch of taxes.

 

[Nebor]

It's only temporary though. Soon Amazon will run out of places to hide and will have to agree to start charging a sales tax. And once Amazon capitulates, everyone else will fall into line and stop playing these silly shell games.

But there's really no way to make this happen at all once, hence CA has to make the change now even though Amazon won't be collecting sales taxes yet.

You realize there will always be states that will provide a safe tax haven for them for political reasons, right?

 

[MrDingleDangle]

It's only temporary though. Soon Amazon will run out of places to hide and will have to agree to start charging a sales tax. And once Amazon capitulates, everyone else will fall into line and stop playing these silly shell games.

But there's really no way to make this happen at all once, hence CA has to make the change now even though Amazon won't be collecting sales taxes yet.

they already do charge sales tax in washington state. so they will only deal with small number of states and the other states will lose companies that have anything to do with Amazon. One thing is for sure they will probably do everything possible to stay out of CA because it has their largest amount of consumers. So while they will eventually have to probably pay sales taxes in other states (which they already do) I don't see how this bill helps the people of California

 

[her209]

So, California thinks adding this sales tax will bring in $200 million...except that Amazon clearly isn't going to allow that to happen.

So not only will California not get that $200 million that it rosily estimates, but it will also lose a good chunk of goodwill with the business community and residents...and oh yeah, California collected $124 million in income tax from Amazon affiliates in 2009. They can say bye bye to that too.

Maybe Amazon will reconsider its position when the California government starts pursuing Internet shoppers for (use) tax evasion thereby driving customers back to B&M stores.

 

[Nebor]

Maybe Amazon will reconsider its position when the California government starts pursuing Internet shoppers for (use) tax evasion thereby driving customers back to B&M stores.

Or maybe people will rise up and burn Sacramento to the ground in an orgy of violent rioting.

 

[ElFenix]

Do you know what the state nets by their presence?

dunno if the state nets or not. south carolina apparently is cutting its nose off to spite its face, but seeing as how there's about 5 people that actually live in that backwater they certainly don't have the volume of ordering that texas does. of course, if they do close the facility we'll have neither the jobs nor the taxes. sounds like manufacturing in china.


the only way this whole catalog sales tax mess gets sorted out is with federal action.

 

[Atomic Playboy]

Or maybe people will rise up and burn Sacramento to the ground in an orgy of violent rioting.

How would you be able to tell?

 

[Wreckem]

As has been stated, it's a Federal issue though. California has no right to tax any interstate commerce. That is in the Constitution and the position Amazon is taking. So until the clueless Congress does something about it, the States can just suck a big one on this issue.

See that is the problem with your theory is its not interstate commerce if Amazon has a presence in the state. CA claims they have a presence in the state(a bit of a stretch) and by law they have to collect sales taxes for purchases made by CA residents.

Texas has a better claim, Amazon had a distribution center under a 100% amazon owned subsidiary. They claim they do no business in the state because 1. its their subsidiary(a shell company) and 2. a distribution center isn't a "presence" in the state. Amazon clearly has a business presence in Texas and should be collecting sales taxes on purchases made from within Texas. While the Governor veto'ed the bill in the regular session its been tightly woven into SB1 in the special session.

And yeah it probably will take a federal law to enforce the state laws, but it doesn't mean Amazon is on the right side of the law, they clearly are not. They have setup their business operations in such away to skirt as many taxes as possible. The sooner they concede, the better for them. Billions of dollars + interest over time will kill amazon when the axe finally falls on them. And it will.

 

[chuckywang]

So when a company gets pissed off for being forced to compete on a level playing field, it's the government's fault for leveling that playing field?

 

[Wreckem]

You realize there will always be states that will provide a safe tax haven for them for political reasons, right?

Yeah one that doesn't have sales taxes. Amazon has alot of distro centers because it is more efficient. They'd have to drop down to a handful of distro centers, which is something they don't want to do.

 

[Lithium381]

See that is the problem with your theory is its not interstate commerce if Amazon has a presence in the state. CA claims they have a presence in the state(a bit of a stretch) and by law they have to collect sales taxes for purchases made by CA residents.

Texas has a better claim, Amazon had a distribution center under a 100% amazon owned subsidiary. They claim they do no business in the state because 1. its their subsidiary(a shell company) and 2. a distribution center isn't a "presence" in the state. Amazon clearly has a business presence in Texas and should be collecting sales taxes on purchases made from within Texas. While the Governor veto'ed the bill in the regular session its been tightly woven into SB1 in the special session.

And yeah it probably will take a federal law to enforce the state laws, but it doesn't mean Amazon is on the right side of the law, they clearly are not. They have setup their business operations in such away to skirt as many taxes as possible. The sooner they concede, the better for them. Billions of dollars + interest over time will kill amazon when the axe finally falls on them. And it will.

wait..... they're currently operating legally under the law..... why would changing the law retroactively make them liable for previously uncollected taxes ?

 

[abaez]

See that is the problem with your theory is its not interstate commerce if Amazon has a presence in the state. CA claims they have a presence in the state(a bit of a stretch) and by law they have to collect sales taxes for purchases made by CA residents.

Texas has a better claim, Amazon had a distribution center under a 100% amazon owned subsidiary. They claim they do no business in the state because 1. its their subsidiary(a shell company) and 2. a distribution center isn't a "presence" in the state. Amazon clearly has a business presence in Texas and should be collecting sales taxes on purchases made from within Texas. While the Governor veto'ed the bill in the regular session its been tightly woven into SB1 in the special session.

And yeah it probably will take a federal law to enforce the state laws, but it doesn't mean Amazon is on the right side of the law, they clearly are not. They have setup their business operations in such away to skirt as many taxes as possible. The sooner they concede, the better for them. Billions of dollars + interest over time will kill amazon when the axe finally falls on them. And it will.

Kill them just like every single other company that has made overseas company to avoid taxes?

 

[zinfamous]

So when a company gets pissed off for being forced to compete on a level playing field, it's the government's fault for leveling that playing field?

well, technically, if the government is the one leveling that playing field, then it sure is their fault.

not that I think they shouldn't in these cases.

 

[BlahBlahYouToo]

So what? Newegg and a bazillion other e-tailers who have a physical presence in the state already do this. Remember, Newegg doesn't have actual B&M stores, just their headquarters and warehouse/distribution facilities are here...yet they collect CA sales taxes as well as sales taxes for the many other states where they have a physical presence...but no actual retail outlets.

Is it an inconvenience for the retailers? Sure, but it's also deductible as part of the cost of doing business.

iirc there's just 3.
CA, TN and NJ. not exactly "many other states".

 

[Nebor]

Yeah one that doesn't have sales taxes. Amazon has alot of distro centers because it is more efficient. They'd have to drop down to a handful of distro centers, which is something they don't want to do.

So California won't only lose out on the jobs\current tax revenue, their residents will also get slower service from Amazon? That's great.

 

[MotionMan]

So California won't only lose out on the jobs\current tax revenue, their residents will also get slower service from Amazon? That's great.

Politicians are great at acting on problems they have created by performing further acts that have more negative (unforeseen, at least to the politicians) effects than positive ones.

They need one of these:

MotionMan

 

[BoomerD]

that kind of thing doesn't bother me, at all. Educating the kids benefits the community as a whole. Everyone should take up that responsibility.

I find those kind of taxes a necessary contribution to be a member of modern society.

Yet, when you get down to it, school taxes are no different than sales taxes. School districts all over the state are rife with wasteful spending...after all, it's tax dollars...not REAL money...
I'd love to see schools in California cut bi-lingual education classes, ESL classes, and Spanish-only classes except for those that are actually designed to teach Spanish, much like German, French, Italian, Russian, etc.

There's no reason the taxpayers should have to foot the bill for classes in multiple languages. Just teach them in English. Let the families foot the bill to teach their children English...especially the illegal immigrant families that make up such a large percentage of non-English speaking students. (for that matter, the children of illegal immigrants should not be in the public schools at all...)

Taxes, as unpleasant and unpopular as they may be, are necessary to fund the day-to-day operation of governments.
Where do you cut? Do you do away with the highway departments that build and maintain our roadways?
Do you do away with the police and fire departments?
Do you do away with the all-too numerous state, county, and city agencies that deal with the everyday issues that are just normal operations for the public entities?

It's easy to bitch about cutting spending for the poor...after all, they're...well, they're poor...no one really cares. They should just get jobs so they won't be so poor...right?

 

[0roo0roo]

Lol no, most people aren't so cheap they need to dodge taxes for online purchasing, it is about convenience. gas and time costs money

 

[BoomerD]

Lol no, most people aren't so cheap they need to dodge taxes for online purchasing, it is about convenience. gas and time costs money

MOST people? Perhaps... but it's all too common here to see a poster say something like, "I'm looking for an Acme video Widget. I know I can get it from newegg, but I'm in California, and I don't want to pay the sales tax. Can you help me find one cheap and without sales tax?"

IMO, that ~8% sales tax isn't a big deal...for most of us. It's certainly not a "deal breaker" for me when I'm making my purchases.

 

[0roo0roo]

Yet, when you get down to it, school taxes are no different than sales taxes. School districts all over the state are rife with wasteful spending...after all, it's tax dollars...not REAL money...
I'd love to see schools in California cut bi-lingual education classes, ESL classes, and Spanish-only classes except for those that are actually designed to teach Spanish, much like German, French, Italian, Russian, etc.

There's no reason the taxpayers should have to foot the bill for classes in multiple languages. Just teach them in English. Let the families foot the bill to teach their children English...especially the illegal immigrant families that make up such a large percentage of non-English speaking students. (for that matter, the children of illegal immigrants should not be in the public schools at all...)

Taxes, as unpleasant and unpopular as they may be, are necessary to fund the day-to-day operation of governments.
Where do you cut? Do you do away with the highway departments that build and maintain our roadways?
Do you do away with the police and fire departments?
Do you do away with the all-too numerous state, county, and city agencies that deal with the everyday issues that are just normal operations for the public entities?

It's easy to bitch about cutting spending for the poor...after all, they're...well, they're poor...no one really cares. They should just get jobs so they won't be so poor...right?

i'm against spanish in classrooms but just how much are these folks costing vs the budget deficit, i'm going to guess its a infinitesimally small percentage of a percent. fact is that infrastructure is failing and schools are bleeding, universities are bleeding, and folks are still against taxes, it is an absurd situation..nice death spiral from cheapness. what made the country strong isn't what conservatives think, there was no fantasy of no tax past, the schools were better funded, the fees baby boomers paid to attend schools like berkeley would made your eyes bleed they were so low compared to today.

 

[Nebor]

MOST people? Perhaps... but it's all too common here to see a poster say something like, "I'm looking for an Acme video Widget. I know I can get it from newegg, but I'm in California, and I don't want to pay the sales tax. Can you help me find one cheap and without sales tax?"

IMO, that ~8% sales tax isn't a big deal...for most of us. It's certainly not a "deal breaker" for me when I'm making my purchases.

But if given the choice of buying your $3000 TV from Frys.com, or bestbuy.com, and paying state sales tax, or buying it from amazon.com or J&R electronics and saving $240, what are you going to do?

 

[BoomerD]

But if given the choice of buying your $3000 TV from Frys.com, or bestbuy.com, and paying state sales tax, or buying it from amazon.com or J&R electronics and saving $240, what are you going to do?

http://www.boe.ca.gov/pdf/pub110.pdf

http://boe.ca.gov/pdf/pub79b.pdf

 

[Nebor]

http://www.boe.ca.gov/pdf/pub110.pdf

http://boe.ca.gov/pdf/pub79b.pdf

So they've got you over a barrel.

 

[RampantAndroid]

You realize there will always be states that will provide a safe tax haven for them for political reasons, right?

Exactly. Some state will see Amazon and go "Hey, we won't tax you, come here!"

Just like Boeing did. Washington wouldn't do anything about union regulation, so they went to South Carolina. WA lost jobs, SC gained them. Good for SC, maybe the morons in the WA state gov't will learn a lesson. Or be voted out.

Amazon isn't the one losing out here...the states are. Esp Cali. They just LOST revenue and jobs. Some of those affiliates will go out of business, and some will move. So the businesses and CA lose here.