We regret to inform you...

January 7, 2011 4:36 PM

'Illinois wants Amazon to collect 6.25 percent sales tax and send it back to the state.' Amazon fights back. Under current law, only companies with a physical presence in the state have to do this, but the new bill declares that even having affiliates in Illinois counts as "presence." 'An e-mail sent from the company to all of its Illinois affiliates this morning warns that, should Illinois Governor Pat Quinn sign a just-passed tax bill, Amazon is cutting off every affiliate in Illinois. "We regret to inform you that the Illinois state legislature has passed an unconstitutional tax collection scheme that, if signed by Governor Quinn, would leave Amazon.com little choice but to end its relationships with Illinois-based Associates," said the e-mail.'

The Associates are furious. Of course, 'this has been a long-running fight for Amazon. Back in 2008, it challenged a similar New York state law in court, calling it an "unconstitutional" attack that singled out a particular company. Amazon's threats to kill its affiliate program haven't been idle, either; the company has closed the program in Colorado, Rhode Island, and North Carolina thanks to similar laws there.'

At issue is not the law itself, but compliance - the purchaser is supposed to pay the tax anyway, but few do. That is why the push is on, to compel the vendors to collect the tax on behalf of the states.

The death of tax-free internet purchases has been forecast for some time now.

However, now that states are starved for revenue, is the end of the tax-free ride in sight?

posted by VikingSword (149 comments total)

We can only hope.
posted by boo_radley at 4:39 PM on January 7, 2011 [3 favorites]

This isn't the first time this has happened, right?

Otherwise, has Illinois raised their income tax yet?
posted by ZeusHumms at 4:41 PM on January 7, 2011

I'm looking forward to the state that just up and says, "We're a data haven. Bring your business to us."
posted by Cool Papa Bell at 4:45 PM on January 7, 2011 [10 favorites]

Otherwise, has Illinois raised their income tax yet?

not yet, but don't say that too loud
posted by lampshade at 4:46 PM on January 7, 2011 [1 favorite]

Those greedy states just need to cut out unnecessary pork like schools and garbage collection and roads and let me buy my cheap DVDs in peace.
posted by Legomancer at 4:48 PM on January 7, 2011 [40 favorites]

The governor is trying to raise the income tax rate by 75%.

This also follows a call from the state government that people should pay back taxes on online purchases dating from 2004.

(I have no problem paying my taxes, especially when the social services in this state have been decimated.)
posted by sugarfish at 4:49 PM on January 7, 2011 [4 favorites]

I assume this will end up with large companies sending their purchaser data to the states so they can start enforcing the taxation (which, at least in some states, is on the purchaser to pay if the seller didn't collect it)
posted by rmd1023 at 4:49 PM on January 7, 2011

Its not quite clear from the post, but Amazon does in fact collect sales tax for goods shipped to New York.
posted by shothotbot at 4:49 PM on January 7, 2011 [2 favorites]

From the article:

Amazon's threats to kill its affiliate program haven't been idle, either; the company has closed the program in Colorado, Rhode Island, and North Carolina thanks to similar laws there.

I'm not sure what Illinois is hoping for here. They won't get the money, and they will cost themselves good jobs. Okay...there's your big toe...now aim carefully...!
posted by kittens for breakfast at 4:55 PM on January 7, 2011 [4 favorites]

This is such a bullshit issue. Amazon and these other companies need to step up and pay the tax already. This is an enourmous company and the data is readily available.
posted by humanfont at 4:57 PM on January 7, 2011 [10 favorites]

What's Illinois hoping for? To not go bankrupt. That may be a pointless hope. Every state will go bankrupt soon enough, the way things are going.

Meanwhile, fuck Amazon. Boo hoo. What, did your budding friendship with Senator Lieberman and your valiant stand against WikiLeaks not earn you the clout in state government you expected it to? Gosh.
posted by koeselitz at 4:58 PM on January 7, 2011 [17 favorites]

I'm not sure what Illinois is hoping for here. They won't get the money, and they will cost themselves good jobs.

I think they figure that if enough states (particularly populous ones) pass such laws, then eventually Amazon will cave rather than eliminate its affiliate program entirely.
posted by jedicus at 4:58 PM on January 7, 2011 [1 favorite]

Why is Amazon fighting this so hard?

People in Illinois shoud expect to pay sales tax on good purchased in the State. Amazon acts only as the collector - which is not a huge burden (British Columbia has a sales taxe that my company collects and remits in all of 15 minutes). Does Amazon feel like it ruins their competitve advantage over Joe Bookstore on the corner?

Also - I am sick of people claiming the Constitution should let them do whatever the hell they want.
posted by helmutdog at 4:58 PM on January 7, 2011 [8 favorites]

So is their argument that collecting a 6% state sales tax will mean Amazon will no longer be competitive with other vendors within the state that already have to collect a 6% sales tax? I'm not sure I understand why they're protesting this
posted by Hoopo at 4:59 PM on January 7, 2011

This is slowing playing out in every state that charges a state income tax. What's interesting is that Amazon is playing it differently on a state by state basis.
posted by 2bucksplus at 4:59 PM on January 7, 2011

I'm not sure what Illinois is hoping for here. They won't get the money, and they will cost themselves good jobs. Okay...there's your big toe...now aim carefully...!

I don't know. I have a sneaking suspicion, that Amazon is liable to fall in line depending on how much business they stand to gain/lose. So, if they have a ton of sales through associates in NY, they'll collect taxes for NY. But a small state like Rhode Island - they'll cut off the associates. And Illinois is a pretty big state, so who knows - only Amazon has the exact numbers in its accounting.
posted by VikingSword at 5:00 PM on January 7, 2011 [1 favorite]

You know I been in Texas and I been in Arkansas
I been in Texas and I been in Arkansas
But I never had a good time till I got to Illinois

-Skip James
posted by flapjax at midnite at 5:03 PM on January 7, 2011 [6 favorites]

The internet has a tendency to route around byzantine tax laws, legislators don't seem to have realised this yet.

Here in the UK Amazon marketplace sellers are exploiting a loophole in the tax laws. The result is huge numbers of CD's and DVDs being shipped on ferries from the UK to the channel islands, being sold by amazon to UK buyers and then shipped back to the UK the next day. Meanwhile UK high street stores like HMV struggle to compete.
posted by Lanark at 5:07 PM on January 7, 2011 [2 favorites]

Why is Amazon fighting this so hard?

Perhaps because being on an even footing with local stores for tax will make it harder to drive them out of business?
posted by rodgerd at 5:09 PM on January 7, 2011 [8 favorites]

Why is Amazon fighting this so hard?

Because they don't want to see their own prices rise by 6 percent. When prices go up, sales go down. Usually.
posted by Cool Papa Bell at 5:12 PM on January 7, 2011 [2 favorites]

So is their argument that collecting a 6% state sales tax will mean Amazon will no longer be competitive with other vendors within the state that already have to collect a 6% sales tax? I'm not sure I understand why they're protesting this

I suspect there are a couple of reasons:

1- They have a built-in 6% competetive edge against other retailers who have to pay sales tax. They don't want to lose that edge.

2- On the other hand, part of that edge is taken up by shipping charges. Their price generally has to be less than the local retail price minus shipping for them to be competative. That may not be easy to do for a lot of items, and it will get harder if sales tax becomes part of the price.

3- It opens the floodgates for all the other states to do the same thing. Now they not only have to figure out how to charge all those taxes, but how to deal with each state's oddities. If I live in IL but I ship to IN, whose tax do I pay? What if there is an affiliate in the middle, in a different state?

4- Worse, it opens up the possibility for every despotic county, township, TIF district and forest preserve district to hit up Amazon for collecting taxes. Even if it is no skin off their backs financially (since they pass the tax to the consumer), it will be an administrative nightmare.

5- The back-end of sales taxes are not particularly easy to manage. Multiply that by all the different taxing districts they may eventually have to deal with. Programming the computers and cutting the checks will cost them money.

That said, it IS asinine for a business to legitimately think they don't have to charge sales tax because they have a different kind of showroom. The "catalog sales" exemption was easy to justify before computerization, not so much now.
posted by gjc at 5:12 PM on January 7, 2011 [7 favorites]

I don't get why the states are so eager to muck with the constitution in this way. Interstate commerce is not their domain. If the feds want to throw up a national sales tax and divvy up the proceeds to the states, go for it. This business of trying to tax an item I buy from outside the state screws up one of the main benefits we get from being a union of states.
posted by mullingitover at 5:12 PM on January 7, 2011 [15 favorites]

Perhaps they should just get rid of the sales tax. It's horribly regressive anyway (obviously some people consider this a feature).

(And I mean replace it with income / property / etc taxes, I'm not talking about some libertarian no-tax idea)
posted by wildcrdj at 5:15 PM on January 7, 2011 [11 favorites]

If 100% of sales * TAX_RATE > PERCENT_SALES_FROM_AFFILIATES * AFFILIATE_RATE then discontinue affiliate program in state.
posted by zippy at 5:19 PM on January 7, 2011 [1 favorite]

I think most people here misunderstand Amazon's probable motivation. The question isn't one of pricing. Their base price is already so much cheaper than most brick-'n-mortar stores that adding a few percent on to that would still get them under the price of the physical retailers. Even more, because they're imposing a percentage tax on a smaller price, customers would still pay less taxes at Amazon than locally.

No, Amazon isn't concerned that having to collect taxes will make their pricing less competitive with local retailers, they're worried that it will make their cost structure less competitive, which is a related but subtler thing. Collecting sales tax is an enormous pain in the ass. It costs money to do it, on top of the actual tax itself. So if there's a 7% tax on an item, Amazon might actually have to raise their prices 8% or more to maintain their revenue level. Yes, that makes them less competitive, but it also just adds to their overhead in ways they'd really rather not add. Amazon would rather hire people into their shipping department, which is a revenue center, than their accounting department, which isn't.

Ultimately, yeah, this does wind up boiling down to Amazon bitching about being less competitive, but it's worth pointing out that it isn't actually the tax itself that they're worried about. They'd just pass that on to consumers as a separate line item. It's the cost of tax collection, which Illinois is pretty blatantly trying to pass off in a pretty sketchy way. Amazon has to eat that one.

So I'm of two minds. Yes, Illinois is understandably pissed that they aren't getting the revenue to which it's presumably entitled. But Amazon is at least partially justified in being annoyed that they're effectively being singled out for this sort of treatment. There's a legitimate Fourteenth Amendment claim--equal protection--in there somewhere.
posted by valkyryn at 5:20 PM on January 7, 2011 [18 favorites]

Well, that's part of what "States Rights" is about, isn't it? The right of states to have to compete with each other for corporate favor, decimating their budgets and provided social services in the process?
posted by mhoye at 5:21 PM on January 7, 2011 [2 favorites]

"The governor is trying to raise the income tax rate by 75%. "

At least this says "rate". Most of the spittle encrusted ranting I've been hearing has omitted this fact. The rate is (purported) to go from 3% to 5.5%. We all will be paying 2.5% more of our income to the state. They are both right, but one certainly seems more evil than the other. And nobody has been mentioning that it has a sunset provision.

Thank you, assholes who voted for Blagojevich. We are all now getting what you deserve.

(Note: I agree with the increase. Has to be done. But it wouldn't have to be done if Blago would have done his fucking job competently.)

(I don't know what the current plan has, but original plans called for heavily increasing the standard deductions. So it may not hurt the mythical family who can least afford it right now. For christ's sake, it is an INCOME tax. If the economy has hurt someone and they are un or underemployed, they pay no, or less, tax anyway. I am so fucking sick of politicians.)
posted by gjc at 5:22 PM on January 7, 2011 [4 favorites]

Why is Amazon fighting this so hard?

I would imagine their corporate desire for enormous amounts of money has something to do with it.
posted by howfar at 5:22 PM on January 7, 2011 [6 favorites]

mullingitover: “I don't get why the states are so eager to muck with the constitution in this way. Interstate commerce is not their domain. If the feds want to throw up a national sales tax and divvy up the proceeds to the states, go for it. This business of trying to tax an item I buy from outside the state screws up one of the main benefits we get from being a union of states.”

Well, first of all, how is it that you conclude that buying something on your computer is buying it in another state?

Second of all, even if it is, this isn't one of "the main benefits" we get from being a union of states. It's sort of a thing, but the problem at the moment certainly isn't that we're paying too much for goods in this way, The main problem is that states are going bankrupt. And your suggestion that "the feds" put up a national sales tax to give to states is laughable. Laughable. Why in the blazing hell would career national senators put their elections on the line by raising a tax that does them absolutely no good whatsoever simply to fund all the backwater, useless state "governments" that they barely even recognize as governing bodies anyhow?

This is a real problem, I think. And given that almost all of the benefits the constitution seems to grant states have been chipped away, whilst the hardships have remained, I don't see how we can go on without addressing it. States are almost powerlessly watching their income simply disappear. That's worrisome.
posted by koeselitz at 5:23 PM on January 7, 2011 [2 favorites]

So is their argument that collecting a 6% state sales tax will mean Amazon will no longer be competitive with other vendors within the state that already have to collect a 6% sales tax? I'm not sure I understand why they're protesting this

It's not so much the 6% tax, it's the .25% county tax, and the .10% city tax and the .35% enterprise district tax.
Yes, all that data is out there and I'm sure a large company like Amazon could dedicate a few people to ensuring they're in compliance but I think they'd rather just try to stop the floodgates from opening.

There is also the competitive nature of the industry.
For me living in a no-sales-tax state, Amazon doesn't really have much of an edge, but I'm certain that if I lived in L.A. with a close to 10% sales tax, I'd take another look.<sup>*

*</sup>Note: I have never actually purchased something from Amazon.
posted by madajb at 5:28 PM on January 7, 2011 [2 favorites]

I don't get why the states are so eager to muck with the constitution in this way. Interstate commerce is not their domain. If the feds want to throw up a national sales tax and divvy up the proceeds to the states, go for it. This business of trying to tax an item I buy from outside the state screws up one of the main benefits we get from being a union of states.

You misunderstand. The tax is on the buyer, not the seller. You live in Illinois (or wherever), you owe the tax for that place. The law even already says that if you buy something and aren't charged sales tax, you have to fill out a tax form and remit the tax. That "benefit" only existed because it was easy for citizens to evade that particular tax.

So Illinois isn't messing around with the constitution. They are just trying to enforce something that previously hasn't been enforced. The reason for THAT was that, for example, mail order catalog companies did not have a presence in the state, and therefore were not subject to the IL law that says that retailers must collect sales tax on behalf of the buyers. But here, since these affiliates are really in the state, they can be forced to collect the tax.
posted by gjc at 5:31 PM on January 7, 2011 [1 favorite]

I don't get why the states are so eager to muck with the constitution in this way. Interstate commerce is not their domain. If the feds want to throw up a national sales tax and divvy up the proceeds to the states, go for it. This business of trying to tax an item I buy from outside the state screws up one of the main benefits we get from being a union of states.

This. THIS. A thousand times, THIS.

It is a legitimate constitutional issue when any state attempts to tax interstate commerce. Don't blame Amazon because the federal laws haven't caught up to reality.
posted by chimaera at 5:32 PM on January 7, 2011 [4 favorites]

Calculating the tax is pretty easy. There are plenty of companies willing to sell you that file. VeraTax from TaxWare for instance. The trick is paying it to somewhere: there are 7500 or so different tax jurisdictions.

You misunderstand. The tax is on the buyer, not the seller.

Is anything interstate commerce then?
posted by smackfu at 5:33 PM on January 7, 2011

The tax is on the buyer, not the seller.

I see your argument, gjc, but even a tax on a buyer, if they are buying a product from out of state, is a tax on interstate commerce, and that is a federal issue.
posted by chimaera at 5:34 PM on January 7, 2011

chimaera: “It is a legitimate constitutional issue when any state attempts to tax interstate commerce. Don't blame Amazon because the federal laws haven't caught up to reality.”

Nobody's taxing interstate commerce. Everything being taxed here happens in Illinois.
posted by koeselitz at 5:34 PM on January 7, 2011

This also follows a call from the state government that people should pay back taxes on online purchases dating from 2004.

Individual people? They want back taxes on things like, for instance, the used complete works of Shakespeare I bought back in 2004?

What's the Latin legal jargon for "You can fuck right off"?
posted by Mr. Bad Example at 5:35 PM on January 7, 2011 [2 favorites]

koeslitz:"This is a real problem, I think. And given that almost all of the benefits the constitution seems to grant states have been chipped away, whilst the hardships have remained, I don't see how we can go on without addressing it. States are almost powerlessly watching their income simply disappear. That's worrisome."

Meh, the state powers are imho a very expensive boondoggle that creates a lot of inefficiency in they system. They were a feature when the whole union idea was being pitched to them, but those days are over a century behind us. None of the States are leaving the union except feet first, so why not optimize the system and eliminate at least a few of the layers of bureaucracy?
posted by mullingitover at 5:37 PM on January 7, 2011 [2 favorites]

This thread is sort of a neat demonstration of why Americans will never, ever have decent government. Because they aren't willing to pay for it. "HANDS OFF MY MONEY!" A nation motivated by greed; well, I guess we've always been that way.
posted by koeselitz at 5:37 PM on January 7, 2011 [2 favorites]

Everything being taxed here happens in Illinois.

Via an out-of-state intermediary, Amazon.
posted by smackfu at 5:37 PM on January 7, 2011

Nobody's taxing interstate commerce. Everything being taxed here happens in Illinois.

From what I can gather, they want to tax all Amazon transactions with recipients in Illinoid since they "have a presence in the state" due to their affiliate program.

If the tax were ONLY on in-state affiliate transactions (Illinois Affiliates shipping to Illinois buyers), then there wouldn't be a constitutional issue.
posted by chimaera at 5:38 PM on January 7, 2011 [3 favorites]

This also follows a call from the state government that people should pay back taxes on online purchases dating from 2004.

How far back can they go? The IRS doesn't require a taxpayer to keep records beyond 7 years (or 10 under special circumstances). Furthermore, is there such a thing as statute of limitations in such cases, or does it not apply in cases of taxes owed...?
posted by VikingSword at 5:39 PM on January 7, 2011

As a matter of fact, when I buy from an "Amazon Shop" based in CA, I get charged sales tax -- BY THAT AFFILIATE, not by Amazon. I paid my 9.75% on a DVD not too long ago.
posted by chimaera at 5:40 PM on January 7, 2011

Forgot to mention: the state gives a discount to businesses for filing on time, to reimburse them for their trouble. I have no idea what this amounts to.
posted by gjc at 5:40 PM on January 7, 2011

This thread is sort of a neat demonstration of why Americans will never, ever have decent government. Because they aren't willing to pay for it. "HANDS OFF MY MONEY!" A nation motivated by greed; well, I guess we've always been that way.

I fail to see how you arrive at that conclusion, when the people I see arguing on the side of Amazon are raising legitimate tax jurisdiction issues that (in my opinion) makes this tax issue federal, not state.
posted by chimaera at 5:42 PM on January 7, 2011 [2 favorites]

Via an out-of-state intermediary, Amazon.

Well, if amazon is only doing the processing, I'm not sure you can claim they are an intermediary.
After all, my cable bill is processed in another state, but I sure have to pay local taxes is on it.

It would seem very clear that if this "affiliate", and I'm not really sure what an affiliate really is, but if the affiliate has an actual address in Illinois, then the ultimate transaction is between two Illinois residents.
posted by madajb at 5:42 PM on January 7, 2011

Yeah, I'm probably in the minority of Amazon customers. I've never purchased anything from Amazon on the basis of their prices being particularly great, and in my experience after shipping etc they've been more expensive than getting things in person at an actual store. Usually I'll only order from them if I simply can't find them elsewhere or don't know where else to look.
posted by Hoopo at 5:43 PM on January 7, 2011

I see your argument, gjc, but even a tax on a buyer, if they are buying a product from out of state, is a tax on interstate commerce, and that is a federal issue.

It is a consumption tax, charged on residents for buying things.

Also, the interstate commerce thing was meant to stop tariffs between the states- additional/different taxes on goods depending on their origination. Because the tax is on a person in the state, and not specifically aimed at interstate commerce, the concept doesn't apply. If they passed some other kind of tax specifically on out of state transactions, you would be right.

(After further research, I was not completely correct- the sales tax is actually comprised of two taxes- a use tax and a service tax. The use tax is on the person, the other one is on the business. So it is more complicated, and it is possible they may not be on the hook for all of it.)
posted by gjc at 5:46 PM on January 7, 2011

It would seem very clear that if this "affiliate", and I'm not really sure what an affiliate really is, but if the affiliate has an actual address in Illinois, then the ultimate transaction is between two Illinois residents.

It is like Yahoo shopping is (or was). An affiliate is a business that uses Amazon to advertise and sell their product, and to process payments.
posted by gjc at 5:49 PM on January 7, 2011

I buy most of whatever I buy on line, pay no sales tax. Though I love this, I do think online sales screw the states. Why? Not just the tax. After all, when I buy online I do not go to the store, any store, and buying at a store I pay sales tax (though no shipping) and they lose not just my purchase, but they have overhead, sales help etc etc so if enough people do not support local stores, lots of unemployment in that location, city, state. And then there is the tax thing.

I have found that most online sales result in better buys--cheaper usually. and then there is also the tax savings. So I like what we have but I can appreciate how it hurts stores and the various states.
In an age of globalization, so much is done elsewhere....compute problem, guy from lord knows where is the tech assistant.Buy from catalog, goods come from elsewhere and I pay the tax sometimes and sometimes not.

We need not address the issue of the bad shape so many states are in but instead focus upon the notion that a huge outfit--in this case Amazon--but any online outfit, saves me taxes and thus makes it worth my while to buy from them rather than support local stores.
posted by Postroad at 5:49 PM on January 7, 2011

Amazon's claims that they don't have the technological capability to do things has always made me giggle. They can't possibly track where sales are being shipped to and then apply a tax rate to it. They've told publisher's that they can't handle tiered discount schedules (based on quantity or book type) because it was too complex. They recently told me that the descriptive copy written for our books, which we discovered was being used to promote other editions of the same public domain titles, couldn't be removed from the listings of competing editions because they don't have the technical ability to do that.

Really, Amazon? Am I expected to continue to believe the myth that you're just a bunch of plucky kids crankin' out pages as fast as you can code?

In other book industry level playing field news, Barnes and Noble kind of roared this week when Borders announced that it was renegotiating payment terms with publishers, in effect giving them an unfair advantage. The always thoughtful Roxanne Coady, owner of the fantastic indie RJ Julia Booksellers responded that perhaps it's time for the whole industry to rethink it's relationship with booksellers.
posted by Toekneesan at 5:52 PM on January 7, 2011 [5 favorites]

An affiliate is a business that uses Amazon to advertise and sell their product, and to process payments.

Is that the sense used here? Amazon considers anyone who creates an account and sends them traffic (like Metafilter) in return for a ~5% cut of sales to be an Amazon affiliate. Most of these affiliates do not have product in Amazon's catalog.
posted by zippy at 6:06 PM on January 7, 2011

The question eventually gets whittled down to are affiliates agents of the company. The states are arguing that yes, they are acting as sales agents and if they are based in that state, that's a presence in that state for Amazon. At least that's my understanding of it.
posted by Toekneesan at 6:15 PM on January 7, 2011

This is one of those issues that wouldn't exist if we had a functioning federal government. Sigh.
posted by mek at 6:16 PM on January 7, 2011 [1 favorite]

I am sick of people claiming the Constitution should let them do whatever the hell they want.

That's one of the more frightening sentences I've ever seen on Metafilter.
posted by Malor at 6:22 PM on January 7, 2011 [6 favorites]

If NY state is getting Amazon to collect state sales tax, then I would guess Illinois is looking for the same deal.

They shouldn't just expect Amazon to do that if other companies are not expected to do so, though.

I suspect that somewhere a wholesale distributor is running an affiliate program that is the purchase desk for it's retail franchisees, and they are avoiding sales taxes on hundreds of thousands or millions of dollars of sales that should be taxable in some form by states except for the window dressing of the Amazon pass-through. But that's just a wild ass guess.

Oh, and Illinois legislature is proposing raising state income taxes from 3% to 5.25%.
posted by dglynn at 6:31 PM on January 7, 2011

The back-end of sales taxes are not particularly easy to manage.

Granted its still early but that has to be one of the most absurd statements of the new year. Amazon has one of the largest computer server systems in the country. They somehow manage to keep track of thousands of independent affiliate sellers and make sure they get paid. They manage to keep track of perhaps a million web advertising affiliates and make sure they get paid a few bucks a month. You don't think they can figure out how to add up taxes and send a check to 50 states once a month? There are one-woman knitted kitty e-tailers that somehow manage to run their own web sites and pay state sales tax. You can buy a database containing the sales tax rates for every zip code in the U.S. for less than 100 bucks. You don't think Amazon can figure it out and run it with a few spare CPU cycles on, say, an iPhone? This ain't rocket science.
posted by JackFlash at 6:35 PM on January 7, 2011 [3 favorites]

Sales tax pisses me of to no end. The money I am spending has already been taxed. If I save it instead of spending it (to avoid the tax) then I'm taxed on the interest.

Taxes make me want to become a tea partier. I'm all for paying my fair share, but in my mind the tax burden should be on the citizens, not on the companies that employ them. Stop treating companies like people!
posted by cjorgensen at 6:53 PM on January 7, 2011 [1 favorite]

attention Meta Fittes, the coming of the tax on all amazon products is near and remember the old(like me) saying - The only thing certain in life is Death and
posted by tustinrick at 6:53 PM on January 7, 2011 [1 favorite]

Nobody's taxing interstate commerce. Everything being taxed here happens in Illinois.

Except for where the items ship from, where the website is hosted and where Amazon is incorporated.

But what's a technicality in the face of the commerce clause?

This is an argument for a national sales tax or harder enforcement of consumption taxes on individuals not states taxing out of state companies.
posted by Talez at 6:58 PM on January 7, 2011

So, how many states have gotten onto Amazon for this so far? New York, North Carolina, Texas, and now Illinois?

It'll be interesting to see if any states try to extract the taxes by setting up stricter use tax recordkeeping requirements. If Amazon thinks it'll suck to collect and remit sales taxes from customers, what will they think of a state's request, say, to keep track of all customers from that state who bought from Amazon so they can send some kind of 1099 to them?
posted by subversiveasset at 7:08 PM on January 7, 2011

cjorgensen: Stop treating companies like people!

We'll stop treating companies like people as soon as they repeal U.S. Code Title 1 Chapter 1 which states: the words “person” and “whoever” include corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals.

Along with that we will repeal other aspects of corporate personhood such as the rights of corporations to own property, enter contracts, sue and be sued, and other constitutional rights like free speech and protections from self-incrimination. For example, the Supreme Court in Citizens United granted corporations the free speech right to contribute unlimited amounts of money to political campaigns.
posted by JackFlash at 7:15 PM on January 7, 2011 [2 favorites]

Amazon will probably do the same cost-benefit analysis they did with New York. If they won't lose enough business from cutting off Illinois affiliates, away they go. That's capitalism.
posted by Blazecock Pileon at 7:16 PM on January 7, 2011

"I am sick of people claiming the Constitution should let them do whatever the hell they want."

That's one of the more frightening sentences I've ever seen on Metafilter.

It's really not. The US Constitution seeks to guarantee real and applicable liberties. There is nothing sinister in believing in the limitation of action for the sake of freedom.
posted by howfar at 7:19 PM on January 7, 2011

Taxes make me want to become a tea partier. I'm all for paying my fair share, but in my mind the tax burden should be on the citizens, not on the companies that employ them. Stop treating companies like people!

I think I agree- the corporate tax doesn't amount to all that much in gov't revenue, and the drag on companies is huge. To me, it makes more sense to tax the money when it moves, not based on where it is at at the end of the year. Shit, with all the efficiency (and growth) that could be had by not taxing corps, we could probably lower taxes.

(Until the 3 million accountants start filing for unemployment, anyway.)
posted by gjc at 7:23 PM on January 7, 2011

This is an argument for a national sales tax or harder enforcement of consumption taxes on individuals not states taxing out of state companies.

The sales tax is (mostly) already a consumption tax. States just force retailers to collect it for them. You already likely owe the tax on things bought out of state, they just rarely enforce it.
posted by gjc at 7:25 PM on January 7, 2011

This hardly seems that evil on Amazon's part. The state's giving them a choice and they're making a reasonable decision. If Illinois doesn't want them to end their affiliate program then say that out of state companies with no presence in the state still have to pay this tax.

If the state intentionally and knowingly writes a loophole into a tax law it's hardly anti-social to use it.
posted by Wood at 7:25 PM on January 7, 2011

Stories like this always make me feel like a chump for looking at my Amazon and Etsy purchases for the year and putting the total dollar value on that line on my Ohio tax form. Because, clearly, no one else is doing it.
posted by SMPA at 7:47 PM on January 7, 2011

They recently told me that the descriptive copy written for our books, which we discovered was being used to promote other editions of the same public domain titles, couldn't be removed from the listings of competing editions because they don't have the technical ability to do that.

But you use the word "they" as if they were just a bunch of plucky kids too lazy to update a file. Instead of, you know, a complex business operation composed of thousands of people in stratified hierarchies that, for many, many reasons, among them the very financial identities of its millions of customers, has drawn very bright lines around what people can and cannot do with their databases.

Technically impossible to change a database field? No. Extraordinarily easier said than done? Absolutely.
posted by Cool Papa Bell at 7:55 PM on January 7, 2011 [1 favorite]

JackFlash, you are extending my argument, not refuting it. We agree.
posted by cjorgensen at 7:58 PM on January 7, 2011

I'm all for paying my fair share, but in my mind the tax burden should be on the citizens, not on the companies that employ them. Stop treating companies like people!

I'm not sure if this is idiocy or brilliant satire.
posted by eriko at 7:59 PM on January 7, 2011 [1 favorite]

you are extending my argument, not refuting it. We agree.

Roger.
posted by JackFlash at 8:05 PM on January 7, 2011

Collecting sales tax is an enormous pain in the ass.

But, as mentioned upthread, compared to Amazon's technical expertise, it's pretty trivial. The databases are out there, they know the zip codes they're shipping to, it would be easy. I think Amazon has the right to choose how to handle it in their best interests, but it really is a loophole that should be closed by the states if they can.
posted by snofoam at 8:07 PM on January 7, 2011

You can buy a database containing the sales tax rates for every zip code in the U.S. for less than 100 bucks. You don't think Amazon can figure it out and run it with a few spare CPU cycles on, say, an iPhone? This ain't rocket science.

Actually, tax law is somewhat more complicated than a straight-up percentage. Logic is needed for different types of products that are taxed differently or not at all (unprocessed food, clothing and religious goods are a few notable examples). and then the purchaser might be affiliated with a non-profit and therefore exempt from sales taxation. It is so complicated and intricate that online vendors like Amazon have to hire tax business staff who can navigate the legal minutiae and teams of programmers who can build the logic for handling all the various use cases. And then your programmers have to get your store ready for New York and other states that decide to change their tax laws on you.
posted by Blazecock Pileon at 8:08 PM on January 7, 2011 [3 favorites]

This thread is sort of a neat demonstration of why Americans will never, ever have decent government. Because they aren't willing to pay for it. "HANDS OFF MY MONEY!"

I disagree, and think several other folks are right in pointing out that the patchwork of different tax regimes is inefficient, confusing, and unnecessary. I think most people appreciate the utility they get from various public services and that such things need to be paid for, but are hostile to the idea of being taxed multiple times in unpredictable ways. At the individual level it is rarely cost-effective to hire an accountant or crunch the numbers for every last financial transaction, and this makes financial planning more difficult.

Consider the following situation, which is quite typical in many states, such as California. You have a family with say one parent working full time and one part time, with a few kids. You pay some state income tax on the money you earn. You also pay federal taxes, but they are allowed to deduct the state income taxes so it's not too much extra. So far so good. But then, every time they go shopping or whatever, You're paying sales tax. Admittedly you were using public services like roads and street lamps and police to protect you, but you'd think some of that would be financed by the state income taxes you paid. I won't go into all the individual fees on various different things which constitute additional special-purpose taxes (eg sin taxes on alcohol or 911 fees on phone service etc. etc.), though they can add up.

What I'm thinking about more is that if you own a house, then you pay property taxes too. OK, it is taking up space and the city or county is maintaining a road outside it and so on, but that was part of the argument for why you should pay sales tax. In California you pay a special tax when you buy your house, as well as property taxes every year. Now, I know mortgage interest is often deductible, but let's keep it simple and imagine this family just saved their money for several years and then bought a modest house for cash. It's only fairly recently that house prices took off to such a degree that this became unaffordable; until a decade or two ago a thrifty person could save the money if they were patient. But in that case, they've been taxed on the earning of the income, taxed again when they spend the money, and in the case of a house taxed a third time for simply owning the asset. And then you get individual bills for electricity, gas, water, garbage collection, and so forth, plus many places mandate homeowner's insurance or make a householder responsible for the safety of the sidewalk.

Now it's all very well to say we need schools, hospitals, police, fire, roads, and so on. I get that, we do need those things, and operating them costs money. If we didn't have them, not only would we be less well off in the immediate sense, but the lack would prevent economic growth because of the economic uncertainty that would result. That does not mean such things should be free of cost controls or that we're not entitled to want good value for the taxes paid. And nor is it unreasonable to minimize economic uncertainty by minimizing the variety of transfer costs paid to the government.

I mean, if you got to a restaurant and order a meal, you expect a bill whose amount is based on what you chose to consume from the menu, plus you add on 15% or so for the service you received from the wait staff. As long as you pay a basic level of attention the amount of your bill will be fairly predictable. But you'd probably get pretty pissed off if your bill also included fees for rental of the plates, flatware, chair and table, a separate charge for using the bathroom, cleanup costs for washing up, and accounting charges for tabulating all this information. That sounds silly, I know, but it's not so far away from the reality of dealing with bureaucracy. When I got married I had to purchase a license, pay to renew some expired ID (which meant an hours-long wait at the DMV), pay the county employee who conducted the ceremony, and then pay to get a copy of my own marriage certificate, followed by paying and waiting again to get new ID following the name change...for the two of us it ended up being several hundred dollars in administrative fees, with a lot of 'take a number, not my problem' bureaucracy along the way. I didn't resent the amount of money involved, but I really resented the amount of time involved. When you go to a store or a restaurant, they usually make some effort to show their appreciation for your business and make your purchase reasonably painless, since they would like you to keep doing business with them rather than switching to a competitor. Since this is not an option for many kinds of government services, everything...gets....very....slow.....and I'm one of the most patient people I know.
posted by anigbrowl at 8:16 PM on January 7, 2011 [4 favorites]

It is so complicated and intricate that online vendors like Amazon have to hire tax business staff who can navigate the legal minutiae and teams of programmers who can build the logic for handling all the various use cases.

Oh yeah, those are just the use cases in one state. Multiply that by fifty. Then add all the other countries who do things their own unique way.
posted by Blazecock Pileon at 8:19 PM on January 7, 2011

"I think Amazon has the right to choose how to handle it in their best interests, but it really is a loophole that should be closed by the states if they can."

There is no loophole, Illinois residents, like those of most, if not all, states, are required to pay "use tax" on purchases made out of state (including over the internet). Amazon isn't screwing Illinois, Illinoisans are. Don't blame Amazon because its customers are cheating on their taxes.

And it would be a nightmare to collect. I would have to pay State, County and Stadium (Miller Park) tax, someone a mile from me would have to pay State and Stadium but not County, others would have to pay State but no County or Stadium (unless of course they live in the area that has the Lambeau Field tax) ad nauseum. Multiply this by every state, county, municipality, stadium district etc, etc, etc...
posted by MikeMc at 8:23 PM on January 7, 2011

Illinois said "your affiliate program means you have presence ["nexus"] in the state, and therefore owe us tax." Amazon is saying that they don't think that's true, but if so, they're prepared to terminate the affiliate program rather than pay tax.

It seems pretty straightforward to me. Making a moral issue out of it doesn't seem particularly productive. Companies don't have a moral sense, at least not that I've ever seen evidence of; if the value of the affiliate program in Illinois to Amazon is less than the tax that Illinois wants to levy as a result of having that program, then Amazon is going to kill it. (Duh.)

The interesting thing would be if this continues, at what point does Amazon determine that the affiliate program is worth keeping around? Or do they just eliminate it completely, and operate their server farms and warehouses entirely out of no-sales-tax jurisdictions because not charging buyers sales tax is a more valuable advantage than the entire concept of affiliates?

Fundamentally, there doesn't seem to be anything that would stop Amazon from relocating all of its operations to New Hampshire, avoiding tax nexus in any other state, and then refusing to cough up any sales tax at all. (I doubt they'd do this because I suspect the property tax on those warehouses would kill them, as NH is sort of quasi-Georgist about its taxation, but maybe there are other states that would be suitable, or could make themselves suitable given enough incentive.)

The solution strikes me as obvious: increase enforcement and penalties for tax noncompliance on buyers, rather than playing games with companies doing business from low-tax jurisdictions. If you can't get political support to do that, then maybe the political capital doesn't exist for the tax in general.
posted by Kadin2048 at 8:26 PM on January 7, 2011

it's pretty trivial. The databases are out there, they know the zip codes they're shipping to, it would be easy.

Some zip codes straddle communities (mine does) so if one has a municipal tax and the other doesn't?
posted by MikeMc at 8:28 PM on January 7, 2011

I was on a flight and I used the airplane's inflight internet to buy a movie from Amazon. It was a cross-country flight and before I watched the whole move I had to pay sales tax in five different states.
posted by twoleftfeet at 8:33 PM on January 7, 2011 [4 favorites]

I can see why Amazon wants to avoid this. The issue here is not so much competition with local businesses as it is competition with other online vendors. Online vendors compete almost entirely on the basis of price, and the price competition is extremely fierce. A 6.25% disadvantage really would hurt their ability to compete.
posted by Mitrovarr at 8:33 PM on January 7, 2011

Multiply this by every state, county, municipality, stadium district etc, etc, etc...

And it would take less than 100 megabytes of database to store. This is trivial, key it by zip+4, and boom.

I'm unamused by the assertions that this is a hard problem. Amazon handles vastly harder problems, with vastly larger datasets, every millisecond when the "you might like" box is populated for someone.
posted by eriko at 8:36 PM on January 7, 2011 [1 favorite]

As an Amazon affiliate who lives in Illinois, I can tell you that when I saw that email from them in my mailbox, my first thought was ,"fuck you," and my second thought was, "what a bunch of pussies". So, their strategy in this is to punish the affiliates for a possible tax hike in Illinois? Thanks.

I'm not sure if they know this or not, but states are broke. Every state is going to do this eventually. So their solution is to punish their own partners? I'm sure that will result in a massive grass roots movement by affiliates to beg for the tax bill not to pass. Yeah, that will work. And isn't it a little late for this? Where have they been for the last few months?

This is actually the first time in my adult life when I actually am rooting for the Illinois legislature. And that's saying a lot, cause the Illinois legislature sucks.
posted by silkyd at 8:37 PM on January 7, 2011

eriko: I'm unamused by the assertions that this is a hard problem. Amazon handles vastly harder problems, with vastly larger datasets, every millisecond when the "you might like" box is populated for someone.

Amazon might be able to handle it, but it'd be a hell of a burden to inflict on any smaller internet businesses.
posted by Mitrovarr at 8:43 PM on January 7, 2011 [1 favorite]

People in Illinois shoud expect to pay sales tax on good purchased in the State. Amazon acts only as the collector - which is not a huge burden (British Columbia has a sales taxe that my company collects and remits in all of 15 minutes).

Apples and oranges. Any given product in Canada has eleven possible tax rates. The number of tax rates, and ways in which they apply or don't apply, is mind-bogglingly huge in the U.S.

The tax rate in City A is 8% on your meal at the local fast-food joint, but only 4% on a pair of pants. Why? Because half of the tax is actually a county-level tax, and the rest is a state-level tax, which isn't charged on clothing under $110.

City B, in the same state, charges 8.875% on the fast food, but no tax on the pair of pants, unless they rise above $110, in which case they're subject to the full 8.875% tax, which, by the way, includes 0.375% for local transportation funding. (In case you're wondering, bagels are groceries and untaxed, unless the person you buy them from slices them for you, in which case they're fast food and taxable.)

City C just has a 6% rate on both the pants and the food. Nearby City D has a 7% rate. Nearby City E has a 7% rate, but 1% of that peters out after the first few thousand dollars, so if you buy a car, you may end up paying 6.3% in the end.

Combine this with the fact that your ZIP code may not allow a retailer to identify definitively where you live (and therefore which state, county, district, and municipal taxes may apply), and you are in for a world of tax-related confusion, something that brick-and-mortar retailers do not have to worry about.
posted by one more dead town's last parade at 8:44 PM on January 7, 2011 [6 favorites]

If the tax were ONLY on in-state affiliate transactions (Illinois Affiliates shipping to Illinois buyers), then there wouldn't be a constitutional issue.

I'm fairly certain that is exactly what the New York law does. From the most recent (and to me still muddy) appeals court decision mostly upholding the constitutionality of the NY law:

"Our analysis leads us to the conclusion that on its face the statute does not violate the Commerce Clause," Nardelli wrote Thursday. "It imposes a tax collection obligation on an out-of-state vendor only where the vendor enters into a business-referral arrangement with a New York State resident, and only when that resident received a commission based on a sale in New York."

The case will almost certainly get to the US Supreme Court, where lawyers who follow this stuff say these issues are overdue for a sorting out.
posted by mediareport at 8:47 PM on January 7, 2011

I'm unamused by the assertions that this is a hard problem

You might perhaps apply for a job there. They could use your expertise in making it an easy problem.
posted by Blazecock Pileon at 8:53 PM on January 7, 2011 [8 favorites]

"I'm unamused by the assertions that this is a hard problem. Amazon handles vastly harder problems, with vastly larger datasets, every millisecond when the "you might like" box is populated for someone."

Even if it were easy for Amazon it still sidesteps the issue of the Use Tax which Illinois residents are required to pay but, obviously, are not. Why should it be Amazon's problem that Illinois residents are tax cheats?
posted by MikeMc at 8:55 PM on January 7, 2011

Wait the states discover eBay.
posted by MikeMc at 8:57 PM on January 7, 2011

The issues are even more complex than the above mentioned tangle of state/county/municipal/other sales taxes make it.

I live in Austin, Texas. Let's assume, for the sake of argument, that Texas tries to fix its economic woes with a similar law. I pay a combination of State/Municipal and Transit sales taxes of 8.25%. So that's what I should pay when I order from Amazon, right?

What if I'm out in the hill country, well outside of town and place the order on my phone? Do I get to pay just the state rate of 6.25%?

But what if I'm having a book delivered as a gift to Illinois? Do I pay Illinois sales tax, because that's the shipping address? Or do I pay my local taxes? Illinois certainly doesn't gain taxing jurisdiction over me just because I'm shipping a gift to a friend there. Any attempt to do so would pretty clearly be an attempt to regulate interstate commerce (unless the product was being purchased from a seller in Illinois).

But what if I place this order while I'm in Illinois? Does Amazon need to keep track of where I am when I place my order? If so, great. Anyone savvy enough to spoof their location to look like they're in a sales-tax-free state can get out of the sales tax.

Or what if I set up a PO box in Oregon, and use that as my credit card billing address. Now, does Amazon need to notice that all my purchases seem to be going to someplace with an 8.25% sales tax?
posted by notbuddha at 9:03 PM on January 7, 2011 [2 favorites]

I buy most of whatever I buy on line, pay no sales tax. Though I love this, I do think online sales screw the states.

Then you are a tax cheat, and you are the one screwing the state.. You are supposed to pay tax to your state on purchases you make from other states. It's more clear if you think about substantial purchases. If you buy a large ticket item--say a $60,000 original oil painting--in another state and have it shipped to your home state, the gallery is not obliged to collect the sales tax from you and turn it over to your state. If you live in New York City, that's about $5,000. It's your obligation to pay that tax. The business does not owe any tax on the purchase--you do.

Most states do say to the businesses in the state that, in return for the services the state provides those businesses, the companies must perform a service for the state, which is to collect the sales tax owed by the customers of the business and turn it over to the state.

Why should Illinois think they can oblige a company that is not in their state to perform a service for the state? New York has a higher minimum wage than other states--should every business that sells to New Yorkers be obliged to pay the New York minimum wage?
posted by layceepee at 9:08 PM on January 7, 2011

Actually, tax law is somewhat more complicated than a straight-up percentage.

Jeez, you know this is unbelievable. We live in the age of computers. This isn't the 1950s. Target and Walmart have stores in just about every county in the country. They sell thousands of items of every description in thousands of jurisdictions. Somehow they manage to struggle through it all and accurately calculate taxes. Yet you believe that we should give Amazon a break because it is all too complicated. What an embarrassing joke.
posted by JackFlash at 9:16 PM on January 7, 2011 [3 favorites]

Somehow they manage to struggle through it all and accurately calculate taxes.

It's not so hard -- even when you have thousands of stores -- to do this because the store just sits there in one tax jurisdiction. They don't have to calculate different taxes for every customer if they live in a different city or a different state from the store.
posted by chimaera at 9:23 PM on January 7, 2011 [3 favorites]

They don't have to calculate different taxes for every customer if they live in a different city or a different state from the store.

Walmart does it just like Amazon. You don't care if the customer came from a different city or state at Walmart. You tax at the location of sale. In the case of Amazon the location of sale is the shipping address. You look up the tax for that location in a table and you're done.

Look, Amazon already computes and collects sales taxes for the states of Kansas, Kentucky, New York, North Dakota, and Washington. The infrastructure is already in place. It isn't that difficult to add the others.
posted by JackFlash at 9:56 PM on January 7, 2011

"I am sick of people claiming the Constitution should let them do whatever the hell they want."

That's one of the more frightening sentences I've ever seen on Metafilter.
posted by Malor at 6:22 PM on January 7 [4 favorites +] [!]

Really? Isn't the Constitution a framework about how the government and the people of the United States work together to make sure that the country and society function in everyone's best interest? I would think that this means balancing personal freedoms against personal responsibility - not a carte blanche free for all. Of course, the devil lie in the details of policy and laws backed up by the mechanism of public votes.
posted by helmutdog at 10:11 PM on January 7, 2011

So calculating the sales tax on my purchases is a horrible, onerous problem that it would be cruel and unusual to expect Amazon to solve, but if I — lacking Amazon's lawyers, guns, and money — don't solve this problem on my own I'm a terrible person and a tax cheat? Fuck that. I didn't write the moronic flat (income) tax clause in the Illinois state constitution that's responsible for this nonsense and I'm not wasting my life compensating for the deficiencies of regressive tax schemes designed by Republicans to bilk poor people. Send me a bill and I'll pay it. Making people calculate their own bill, especially when the rules are so complex and change yearly if not more often, is barbaric.
posted by enn at 10:18 PM on January 7, 2011 [1 favorite]

They sell thousands of items of every description in thousands of jurisdictions. Somehow they manage to struggle through it all and accurately calculate taxes.

Because they know precisely where every store is, and what laws apply. And they can determine those things during the build process for the store... they look it up once, code it into their systems, cut a check once a month, and it's done. Totally insignificant overhead.

They're obviously responsible to know the tax laws wherever they have a store, as a cost of setting up shop there. But is any business, anywhere in the country, responsible to know every single tax code for every single possible location for every single possible buyer?

Even if they had a monster database of all these different tax rates and weird rules, how on earth is an online retailer going to even determine where you are accurately enough to tax you?
posted by Malor at 10:21 PM on January 7, 2011 [1 favorite]

Jeez, you know this is unbelievable. We live in the age of computers.

Computers are easy. Computers implementing laws, which are in turn driven by a political process, are hard.

Consider that you write a program that has some external dependencies. Every time those dependencies change, you QA the code.

This is manageable when your dependencies are things like "oh, we're upgrading our database from Version 3 to version 3.1.

In the case of computers implementing laws, however, it's as if your dependency is every new commit on a popular open-source project. Except that you actually have a varying number of open-source projects that can fork, and each may incorporate code from other projects.

Maintaining that system would be a real bastard. And when it's handling $$$ in transactions every milisecond, downtime is expensive, errors are expensive, and errors just may lead to jailtime for someone.

So yes, it's a pain. Because while computers are easy, depending on an ever-changing politically driven process is hard.
posted by zippy at 10:24 PM on January 7, 2011 [2 favorites]

From the back of the tax form: 'A use tax is a tax upon the privilege of using tangible personal property in Illinois.'

It seems the idea of the use tax is that every person in Illinois should go through all their receipts for the last 5 1/2 years, identify everything that was purchased from outside Illinois, calculate the variance from Illinois sales tax on every transaction, and then add this all up to find out how much sales tax they would have paid if they had made their purchases in Illinois, even though they didn't - because the state of Illinois considers it a taxable privilege for citizens to use what they own. Aside from wasting millions of man-hours to collect and process this data, a considerable loss to both the economy and the state treasury, this policy quickly degenerates into absurdity.

For example, if I lived in Illinois and bought an $80 pair of pants from California via the internet in 2008, I should pay the state of Illinois $5 for the privilege of walking around in my own pants.

You know why few people are aware of this tax and even fewer pay it? It's not because they're tax cheats, it's because the idea is fundamentally stupid. Even though it is the law, any serious attempt at enforcing it will be halted by either a court or at the ballot box. I have heard more reasonable proposals from crack-addled muggers. If you disagree, why don't you take a moment to pretend you are an Illinois use tax collector. Go into the bathroom, give yourself a stern look in the mirror and say 'Sir or Madam, your use of those pants is taxable.'
posted by anigbrowl at 10:27 PM on January 7, 2011 [2 favorites]

Chimaera is right, with a mail order business you have around 130,000,000 possible residential addresses you can ship to in the US, spread across ~7500 different taxing jurisdictions. If you think there is a master table that magically knows exactly the right tax for all of those addresses, you're wrong. You can get a lot of them right, but you'll never get them all right.

And then there's the exemptions. Product exemptions, organizational exemptions, governmental exemptions, use exemptions, sales tax holiday exemptions. And the paperwork to justify all those exemptions.

Which leads to audits. State audits. Local jurisdiction audits. When you start collecting their tax they can, and will, audit you. Missing any of that paperwork? Didn't collect city tax from the guy who lives in a trailer down the dirt road next to the stream which is right inside the new city limits after a recent annexation? Whatever you get wrong leads to penalties, interest, etc.

None of this is to say that Amazon CAN'T do it, or that the SHOULDN'T do it. I think they can and they should. But to act as if it's the easiest thing in the world to implement and duh, they could probably run it on their iPhone for a nickel - that's just wrong.
posted by patrick rhett at 10:31 PM on January 7, 2011 [3 favorites]

Even if they had a monster database of all these different tax rates and weird rules, how on earth is an online retailer going to even determine where you are accurately enough to tax you?

Apparently you have never heard of zip codes. They've been around a while.

Perhaps you have never worked in the real business world. You can buy a database for $100 that gives you the tax rate for every zip code in the U.S. It's not exactly a monster database. There are 40,000 zip codes. You can easily fit the database on your iPhone.

You make this sound like its something new. Many companies have already been doing this for years. Large companies and small companies. Amazon itself has already been doing this for years for several states. It's hard to believe the utter ignorance about the realities of the existing business world, taxes, computers, etc.
posted by JackFlash at 10:33 PM on January 7, 2011 [1 favorite]

Yes, Illinois is understandably pissed that they aren't getting the revenue to which it's presumably entitled. But Amazon is at least partially justified in being annoyed that they're effectively being singled out for this sort of treatment.

Amazon, in its past, formative years, was a thrill to watch - making something unique happen on the Internet, and in commerce. They were given a free ride to help them develop their enterprise. That free ride was given at the cost of *Amazon's competitors*, and the taxes those competitors collect that support things like emergency health centers, schools, libraries, and so on.

Amazon is a filthy rich company. It's time to cut them loose and let them figure out how to adapt. It's time for Amazon to get off the no-tax tit. That said, it's also time for states and municipalities to start getting *innovative* about developing their regional and local economies, respectively - instead of the lazy-ass way they have been doing things for decades, which is to simply raise a tax when there's a shortfall, instead of using technology and sound management principles to run cities and states.

To sum up: Amazon, it's time to grow up. States and Cities, it's time to learn new ways of increasing the happiness, security, and education of your citizens. Taxes are not the be-and-end-all. Get busy!
posted by Vibrissae at 10:33 PM on January 7, 2011

For the folks who think this is too hard to implement, take Apple as an example. They have a physical presence in every state that has an Apple Store so should be charging sales tax for online sales. Go to their online store and fill out an order for an iPod, and enter your address. It will instantly pop up the sales tax for your zip code. You don't even have to give your credit card. This is already being done. Amazon can do it too.

If you try this, I won't guarantee that every state will charge sales tax. Some may have internet sales exemptions, but I'm guessing that most will charge sales tax. If your state doesn't work try a neighboring state zip code. But the fact of the matter is that Apple knows the tax rate for every single zip code or whether that zip code is exempted. There are companies that make a living providing this information on a timely basis for a small fee. It is very straight forward and very routine. Those of us who live in the real world have been dealing with this without pain for years. Large companies and small companies. It's nothing new.
posted by JackFlash at 11:00 PM on January 7, 2011 [1 favorite]

You can buy a database for $100 that gives you the tax rate for every zip code in the U.S.

My zip code includes two different towns with different tax rules.

Your database now must handle not just zip codes, but exceptions as well.

Granted, it's doable, just already one order of magnitude more painfui than just dealing with every zip code.

Oh, and I hope your system knows that in zip code A, TVs incur a recycling fee, and in zip code B, car parts have an environmental impact fee. Etc. I also hope that your existing product database maps to tax categories, and that the data in it is correct.
posted by zippy at 11:12 PM on January 7, 2011 [1 favorite]

Computers are easy.

Yeah, well, they can play hard to get pretty often, in my experience.
posted by flapjax at midnite at 11:19 PM on January 7, 2011 [3 favorites]

Your database now must handle not just zip codes, but exceptions as well.

I weep for this generation. Forty years ago we put a man on the moon using just pencils and slide rules. Now they must struggle to decide what color socks to put on in the morning because its just so complicated.

Here's the sales tax rate PDF for the state of New York. It's one whole page.

Yes it takes a little bit of work to compile this information, but it has already been done, many times, by entrepreneurial individuals who didn't say it's just too complicated and who had the gumption to actually do a little bit of grunt work and compile the data and the exceptions and the various taxable product categories. They've already done the work and will sell it to you for a small fee so you don't even have to do it yourself.
posted by JackFlash at 11:38 PM on January 7, 2011

Mr. Bad Example: "This also follows a call from the state government that people should pay back taxes on online purchases dating from 2004.

Individual people? They want back taxes on things like, for instance, the used complete works of Shakespeare I bought back in 2004?

What's the Latin legal jargon for "You can fuck right off""

So you illegally evaded taxes by not reporting your out of state purchases as required by State law and you are expecting the State to not take action? If the State can get Amazon to report all those purchases it seems like you'll be on the hook.
posted by Mitheral at 11:38 PM on January 7, 2011

chimaera: "Somehow they manage to struggle through it all and accurately calculate taxes.

It's not so hard -- even when you have thousands of stores -- to do this because the store just sits there in one tax jurisdiction. They don't have to calculate different taxes for every customer if they live in a different city or a different state from the store"

But their mail order business doesn't sit in one place. WalMart sells via the web for either store or direct delivery. They make you register to check out so I can't see how they managed the tax but I'm pretty sure they have got it covered.

Besides; every small business doing intra state business manages to figure this out; I have a hard time imagining businesses with a multi state presence being unable to manage. Remember this doesn't affect Joe's Auto Reckin' or Nanny's Nitting unless they have a business presence in the State requiring tax collection. Simply shipping into Illinois doesn't invoke tax collecting requirements. Businesses too small to handle the complexity aren't affected.

Even for small businesses that managed to break through into other states I'm sure, if this becomes an issue, there will be companies to outsource the calculation and even collection and remittance of other taxes in the same way that a large percentage of payroll processing for small and medium business is done by contractors and for much the same reason.
posted by Mitheral at 11:57 PM on January 7, 2011

They've already done the work and will sell it to you for a small fee so you don't even have to do it yourself.

Some companies use third party solutions and yet find them wanting, to the extent that in-house programmers are still a necessity.
posted by Blazecock Pileon at 12:09 AM on January 8, 2011

Technically impossible to change a database field? No. Extraordinarily easier said than done? Absolutely.
posted by Cool Papa Bell at 10:55 PM on January 7

My point is Amazon has a track record for making policy decisions, and then using technical complexity as an excuse for it. That is exactly what is happening in that example I gave. They have decided that when a book listing doesn't have a description, or its own "Look Inside" file, they would use that material from any other edition. They choose to do that. It's not a matter of removing something from a field in a database, it's about policy. The same is true with the tax issue.
posted by Toekneesan at 3:35 AM on January 8, 2011

So you illegally evaded taxes by not reporting your out of state purchases as required by State law and you are expecting the State to not take action

The dude bought a used book for a couple bucks on the Internet years ago and because he didn't know the ins and outs of this very obscure tax law he is the asshole? Maybe instead this is a sign of a shitily implemented tax law that troubles citizens for more than it is worth.

Man, some people in this thread really enjoy appointing themselves the tax Gestapo and judging the rest of us.
posted by boubelium at 4:06 AM on January 8, 2011 [1 favorite]

In just the third quarter of last year, Amazon had sales of $7.5 billion turning a profit for just that quarter of $1.7 billion*. That doesn't include Christmas. They have the resources to figure this and many other problems out. Amazon is very powerful. They need to be held to a higher standard.
posted by Toekneesan at 4:11 AM on January 8, 2011

Here's the sales tax rate PDF for the state of New York. It's one whole page.

One page! bunch of wusses in New York. Here's the one for Pennsylvania. It's 42 pages!

When I was a cashier in PA back in the olden days before computers we had a large book at the register you could look in to see if something was taxable. I used to just guess.

That said, Amazon has more resources than I did in the 1980s so they should be able to figure it out.
posted by interplanetjanet at 4:41 AM on January 8, 2011

The dude bought a used book for a couple bucks on the Internet years ago and because he didn't know the ins and outs of this very obscure tax law

Anybody who has ever filed a state income tax return should know what a use tax is, and when it applies. It's incredibly simple, except in edge cases like "does toilet paper count as a necessity and remain untaxed in my state?"

Not that anybody actually does it, because it's a nuisance to do and most states have a "pay about $10 and we guarantee nobody will audit you on your use tax" option. But it's in no way obscure or complex.
posted by Dr.Enormous at 5:03 AM on January 8, 2011

So calculating the sales tax on my purchases is a horrible, onerous problem that it would be cruel and unusual to expect Amazon to solve, but if I — lacking Amazon's lawyers, guns, and money — don't solve this problem on my own I'm a terrible person and a tax cheat? Fuck that. I didn't write the moronic flat (income) tax clause in the Illinois state constitution that's responsible for this nonsense and I'm not wasting my life compensating for the deficiencies of regressive tax schemes designed by Republicans to bilk poor people. Send me a bill and I'll pay it. Making people calculate their own bill, especially when the rules are so complex and change yearly if not more often, is barbaric.

I don't think anyone said that. Just that it is a task that someone will have to do, and it will cut into their profits. Businesses are in business of making profits, and will fight any attempts that might harm profitability.

Secondly, this has nothing to do with the state income tax.

Thirdly, since when is "if they don't catch me, it's their fault" a valid excuse for anything? That's juvenile hand-in-the-cookie-jar logic, not adult responsibility.
posted by gjc at 5:43 AM on January 8, 2011

In just the third quarter of last year, Amazon had sales of $7.5 billion turning a profit for just that quarter of $1.7 billion*. That doesn't include Christmas. They have the resources to figure this and many other problems out. Amazon is very powerful. They need to be held to a higher standard.

Nobody should be held to a higher standard. That is fundamentally, morally wrong. They are a retailer, they should be held to the same standards as any other retailer.

Also, you read the link wrong. Their profit for that quarter is $231m. $1.7b is their gross profit, BEFORE they have paid all their bills.

Not uncoincidentally, 6% of their gross revenue is $453m. If they had to collect a similar tax on all their transactions, and presumably had to lower prices a little bit to compensate for the higher prices, and presumably lost some sales because of it as well, that cuts mightily into their profits.
posted by gjc at 5:50 AM on January 8, 2011 [2 favorites]

"They have the resources to figure this and many other problems out. Amazon is very powerful. They need to be held to a higher standard."

No. Amazon's customers need to be held to a higher standard. It is the customer's responsibility to pay the Use Tax. Why should Amazon become a tax agent for the State of Illinois? Pay your taxes and it won't be a problem. Why is this so difficult for people to understand?
posted by MikeMc at 6:34 AM on January 8, 2011 [2 favorites]

Here's the sales tax rate PDF for the state of New York. It's one whole page.

Yeah, one whole page that says, "Use our Sales Tax Jurisdiction and Rate Lookup Service on our Web at www.nystax.gov to determine the correct local taxing jurisdiction, combined state and local sales tax rate and the local jurisdiction reporting code to use when filing New York State sales tax returns."

And that's after you've determined, for example, that while Gatorade is taxable Clamato Juice Cocktail is tax exempt. And in this example, "Any brand name product shown in italics is included as an example and is not to be construed as an endorsement of the product." And just one more--while "nuts and nut products" are tax exempt, it shouldn't surprise you that "French burnt peanuts" are taxable, as everyone knows that peanuts are not nuts.
posted by layceepee at 6:55 AM on January 8, 2011 [2 favorites]

Okay, let me restate that, they need to be held to a standard. The same standards physical retailers are held to. And we shouldn't simply accept their excuses.

And I'm not sure if either their $1.7 billion gross profit or the $231 million they returned to shareholders that quarter is the more important figure, but I think my point still stands that they have the resources to address the technical issue.

I doubt they'd lower prices 6% in response, not unless they extracted it from publishers first.
posted by Toekneesan at 7:04 AM on January 8, 2011

The technical stuff is just a red herring. The government tells plenty of companies to do stuff they would rather not do. For instance, there were concerns that doctors were getting bought off by the drug companies. So now the drug companies have to track every dollar they spend on each doctor, with varying laws in different state. It's a pain in the ass. So my employer makes quite a lot of money writing the software for them to track it.
posted by smackfu at 7:15 AM on January 8, 2011

Okay, let me restate that, they need to be held to a standard. The same standards physical retailers are held to. And we shouldn't simply accept their excuses.

As I understand it, physical retailers in most states are not required to collect sales tax from out-of-state customers who have purchases delivered to their home states.
posted by layceepee at 7:37 AM on January 8, 2011

Unless they also have a presence in that state. And then they are required.
posted by Toekneesan at 7:41 AM on January 8, 2011

I should probably qualify that as might be required. There may be states that exempt that kind of sale.
posted by Toekneesan at 7:43 AM on January 8, 2011

take Apple as an example ... It will instantly pop up the sales tax for your zip code.

I just did that, and they got it wrong, for which I would bet they have legal liability. My zip code is exactly one building, so if it doesn't work for me I'm very suspicious of the general claim.

There's a "worker" in my office whose job, as best I can tell, is to harass vendors all day to refund our sales tax (we're exempt). This would be easy for Amazon if IL would be willing to say that all sales happened at the location of the affiliate / central IL processing the way it works for physical stores.
posted by a robot made out of meat at 7:52 AM on January 8, 2011

Nobody ever buys anything from my pretty awesome Amazon affiliate store anyway.

THE ITEM SHOP - A PLACE FOR POTIONS, ARMOR, AND WEAPONS
posted by jtron at 9:07 AM on January 8, 2011 [1 favorite]

I just did that, and they got it wrong, for which I would bet they have legal liability.

You don't provide details but I'm assuming that your organization is exempt from sales taxes because it is some sort of non-profit or government agency. In that case you are not exempt because of location. You are exempt because of the type of organization. It doesn't matter where you are located. The way it works in most cases is that a retailer is required by default to collect sales tax due at a location unless the organization has provided written proof of their exemption. That's what the worker in your office does -- provide proof to vendors. You have to provide the same proof whether you buy from an on-line retailer or from the Walmart down the street.

So Apple is doing exactly the right thing by charging sales tax until you provide them documentation of your exemption. The way it works is you set up an account with the on-line vendor then fax them documentation of the exemption which becomes electronically attached to your account. Then each time you make a purchase through your account at the vendor you check off each item in your order as either exempt or non-exempt (because certain items may or may not be exempt). The vendor computes the sales tax accordingly.
posted by JackFlash at 9:09 AM on January 8, 2011

MikeMc writes "Why should Amazon become a tax agent for the State of Illinois?"

Because they have a business presence in the State of Illinois. Even Amazon seems to acquiesce to the legal validity of this as they are going to remove their business presence from Illinois if the law is enacted to avoid collecting the tax.
posted by Mitheral at 9:18 AM on January 8, 2011

For the folks who think this is too hard to implement, take Apple as an example. They have a physical presence in every state that has an Apple Store so should be charging sales tax for online sales. Go to their online store and fill out an order for an iPod, and enter your address. It will instantly pop up the sales tax for your zip code. You don't even have to give your credit card. This is already being done. Amazon can do it too.

Just about every Apple product is subject to sales tax in states that have it. Large numbers of Amazon products are not subject to sales tax. A table of local tax rates for every ZIP code is woefully insufficient; you need such a table for every product you sell. There's a reason that vendors who ship internationally disclaim any responsibility for any duty the buyer is required to pay when a purchase goes through customs; this is just as complicated.

Claiming that a simple table of ZIP codes and tax rates is the cure-all for Amazon's problems? Then maybe you should put some more thought into it.
posted by one more dead town's last parade at 9:21 AM on January 8, 2011 [3 favorites]

If they had to collect a similar tax on all their transactions, and presumably had to lower prices a little bit to compensate for the higher prices, and presumably lost some sales because of it as well, that cuts mightily into their profits.

Income tax cuts rather largely into my income which is also profit since I'm self-employed. So if Amazon can get off from collecting taxes because it will affect their profit can I get off from paying Income Tax? As a small business I have to collect tax from clients. The tax differs depending on where the clients are from. In some case I have to charge 2 taxes. In other cases just one, and in other cases, none. This costs me money and time. Can I just not bother because of that?
posted by juiceCake at 9:32 AM on January 8, 2011

No matter how JackFlash oversimplifies it, calculating sales taxes for all products * all shipping destinations * all types of recipients * all time variations * all possible methods of calculating tax * all possible ways of varying the calculations based on arbitrary conditions is an extremely hard problem. Local stores (and chain stores) have the advantage of a single point of sale, and also staff on-hand at that location who must figure out the precise structure of the taxation system there. Imagine if each of those stores had to calculate tax based on where their shoppers lived, instead? Absolute chaos, but that's what is being suggested.

The destination issue (which takes the problem from 50 states to a number of possible variations only slightly smaller than the number of street addresses in the country) is the biggest one, and the only way this will get sorted out to everyone's satisfaction is if each state has one rate chart for internet sales -- and no other jurisdictions get any shot at the money. Of course since local jurisdictions are always broke, they'll grate against this, but I don't see even an impractical way of doing what Illinois seems to want, which is for end-users to be forced to calculate and pay their own use taxes. The scofflaw potential for this is far higher even than speeding on interstates.
posted by seanmpuckett at 9:35 AM on January 8, 2011 [2 favorites]

Large numbers of Amazon products are not subject to sales tax.

Yep and Amazon already does this for New York and Washington, for example. Thousands of on-line retailers in each state do the same thing. There are lots of companies that provide all of that tax information to you for a small fee -- including locations, addresses, zip codes, exemptions, tax rates for different product categories. People who run businesses have been dealing with sales tax issues forever -- across states, across the nation, internationally. It's nothing new.

...calculating sales taxes for all products * all shipping destinations * all types of recipients * all time variations * all possible methods of calculating tax * all possible ways of varying the calculations based on arbitrary conditions is an extremely hard problem.

it's not that hard. It's already been solved, multiple times by many companies. We people actually who run businesses know this. You seem to be just making stuff up.
posted by JackFlash at 9:46 AM on January 8, 2011

You don't provide details but I'm assuming that your organization is exempt from sales taxes because it is some sort of non-profit or government agency. In that case you are not exempt because of location.

I know that; they got wrong the tax that I should pay on personal purchases. It's probably a result of the over-lapping tax districts around the city.
posted by a robot made out of meat at 10:20 AM on January 8, 2011

Claiming that a simple table of ZIP codes and tax rates is the cure-all for Amazon's problems? Then maybe you should put some more thought into it.

Oh sure they can instantly search my entire product browse and order history and recommend an array of products matching my preferences. They can send checks to millions of affiliates, assemble orders from hundreds of thousands of sellers, shippers, etc. But collecting the tax info on goods sold in a few thousand tax districts like Safeway, Walmart, Target and every other national retailer, that's impossible. This is really not that difficult a probl. If you cant be bothered to hire the staff to assemble the data, well there are whole companies who exist just to provide and assemble the data.
posted by humanfont at 10:52 AM on January 8, 2011

it's not that hard. It's already been solved, multiple times by many companies. We people actually who run businesses know this. You seem to be just making stuff up.

Apple's getting it wrong, as a robot made out of meat already demonstrated. You probably are as well, if you ship to any arbitrary address in the U.S.

You may actually run a business, but you're actually wrong.
posted by one more dead town's last parade at 12:24 PM on January 8, 2011 [1 favorite]

Let me put it another way: Publix, no matter how many taxing jurisdictions their customers live in, needs, at a maximum, to know the applicable tax rates in just over 1000 of them (assuming that each store is in a unique taxing jurisdiction, which isn't the case; the real number is probably more like several hundred). Amazon needs to know the applicable tax rates for every address in the country.
posted by one more dead town's last parade at 12:31 PM on January 8, 2011 [1 favorite]

You seem to be just making stuff up.

I can't say much more than I have already, but I will assert that the technical and legal issues behind calculating tax are much, much more complex than your ZIP-table-in-a-database.
posted by Blazecock Pileon at 1:30 PM on January 8, 2011

The arguments such as about Publixay determine where they build a store (e.g right on the Delaware state line), but their point of sale machines army being programmed by some manager keeping an eye on local issues. Try buy a feed from a provider who aggregates everything by zip code and update based on the providers. The point of sale infrastructure including self checkout handles things like tax exempt purchasers. Heck it even handles food stamps now. If Apple is showing up wrong for you it is probably the result of one of these providers having it wrong. Just because the problem can't be solved in one afternoon of lazy coding time doesn't mean it is impossible difficult. The complexity keeps these companies in business. Niches like this have spawned hundreds of little small dev shops who just make a living managing government data for you in a handy sdk.

What would be nice is for the government to cut out the middle men and provide a nice webservice that your app could register with to pull all the rules down. Perhaps a microformat like Rdf could be used.
posted by humanfont at 1:58 PM on January 8, 2011

The thing is, you don't even need to know how it works. Businesses have been doing this for years. A one-person e-tailer can subscribe to a service that will plug into your web site, handle all of the customer data entry, handle credit cards and will automatically calculate sales taxes for you for anywhere you want to ship. All of the sales tax computation is invisible to you.

Or you can subscribe to a stand-alone application that you plug into your in-house accounting system to calculate sales tax anywhere in the country. You get weekly updates just like an anti-virus program.

Thousands of companies have been dealing with this for years. The idea that it is too difficult for Amazon is a joke because everyone else has already been doing it.

There is a lot of complicated regulatory stuff involved in running a business. There are payroll services like ADP that handle all of the issues related to payroll anyplace in the country -- federal withholding, FICA, state withholding, local income taxes, local payroll taxes, local unemployment insurance, workman's comp, health insurance, 401(k)s, etc. Compared to all that, handling sales tax doesn't even register as an issue. It is a trivial issue for a company.

This silliness about it being too complicated for Amazon is just based on ignorance. There is only one reason Amazon doesn't want to pay sales taxes and that is because it would remove a price advantage they have over local retailers.
posted by JackFlash at 2:02 PM on January 8, 2011

This is from Amazon's site:

"The tax rate applied to your order will generally be the combined state and local rate for the address where your order was shipped. Therefore, the sales tax rate applied to your order may be different for an order shipped to your home address than it is for an order for the very same items shipped to your work address. Amazon.com obtains sales tax rates from a leading tax rate service provider.

Note that many factors can change between the time you place an order and the time of credit card charge authorization, which could affect the calculation of sales taxes. The amount appearing on your order as Estimated Tax may differ from the sales taxes ultimately charged.

For example, tax law changes may occur between order placement and credit card charge authorization that could result in an increase or decrease in taxes charged."

----
Amazon doesn't even need to do anything. They just get their tax information by subscription just like thousands of other businesses. Note that their tax system is so quick that it can even respond to changes in tax rates that occur in the couple of seconds between order placement and credit card authorization. After all, this is the 21st century.
posted by JackFlash at 2:19 PM on January 8, 2011

This silliness about it being too complicated for Amazon is just based on ignorance

I don't think many are saying it is too complicated, but I would observe that it is a lot more complicated than you know, and that new tax laws add technical complexity and legal liabilities that most businesses, including Amazon, would prefer to avoid.

There is only one reason Amazon doesn't want to pay sales taxes

Amazon doesn't pay sales tax. It collects taxes from people who buy specific, taxable products in specific locales.
posted by Blazecock Pileon at 2:33 PM on January 8, 2011

Apparently you didn't read from above. Amazon uses a tax rate service provider just like thousands of other companies. The cost of complying with sales tax laws and the technical complexity is trivial in the overall scheme of things. I do it myself. There is no excuse for Amazon other than trying to maintain a price advantage over local retailers by not collecting sales taxes from customers.
posted by JackFlash at 2:46 PM on January 8, 2011

The cost of complying with sales tax laws and the technical complexity is trivial in the overall scheme of things.

There are some people who do this for a living, day in and day out, who would disagree with many of your claims.
posted by Blazecock Pileon at 2:53 PM on January 8, 2011

Blazecock, JackFlash's point is that this problem has already been solved by businesses many times over. If he's right that there are existing off-the-shelf solutions already out there, then claims that Amazon's situation is oh-so-terribly-complex-boo-hoo that they can't *possibly* be expected to do this for every state in the country do seem to become complete nonsense, no?
posted by mediareport at 4:36 PM on January 8, 2011

...then claims that Amazon's situation is oh-so-terribly-complex-boo-hoo that they can't *possibly* be expected to do this for every state in the country do seem to become complete nonsense, no?

The thing is, Amazon themselves have never made that claim because they know it is ridiculous. Amazon says on their web site that they already subscribe to a tax rating service for states where they already collect sales taxes. It is only the people here that have made that silly claim in some sort of misguided loyalty to Amazon or misdirected aversion to paying taxes. One can honestly argue for or against internet sales taxes without inventing excuses out of whole cloth.

It's very simple. Amazon doesn't want to collect sales taxes because it removes a significant pricing advantage they have against local retailers. People can have differing opinions on whether that is good or bad.
posted by JackFlash at 5:37 PM on January 8, 2011

To try stating this point another way. Yes the people who do locality level sales tax tracking and analysis would agree that their jobs are complicated and worthy of full time compensation. However that mini-industry to which they belong has done a remarkable job of taking all those complex rules, codifying them into software development kits and churning out the data feeds such that programmers like those on this thread have stated, one can consume their knowledge in the form of a decent little code library, which you provide information like zip code and UPC or Harmonized Tarffic code and get back the relevant amount. This has become the norm in most software development these days. Someone solves a complex problem, keeps it solved and everyone else licenses their sdk, because having your business analysts and dev team focus on those problems when they could be solving ones closer to the heart of your business is not worth it. If too many developers need the same problem solved then someone open sources the solution and we collectively maintain it.
posted by humanfont at 5:42 PM on January 8, 2011

Well said, humanfont. But I wouldn't say that it is complicated. It's not rocket science. I would say that it is tedious. It is ditch digging. And there are lots of people out there willing to dig ditches. That is why the subscription services are so cheap, because just about anyone with a laptop and willing to do the grunt work to compile the data can set up a sales tax information service. It is a very competitive business which drives down prices. You can google them up and there are a lot of them. Where providers differentiate themselves are in added value like integration with your web site or bundling with credit card processing.
posted by JackFlash at 6:21 PM on January 8, 2011

Jackflash, I'm not saying you're wrong:

that has to be one of the most absurd statements of the new year.

Yet you believe ... it is all too complicated. What an embarrassing joke.

You seem to be just making stuff up.

This silliness ... is just based on ignorance.

Apparently you didn't read from above.

but I am saying that you're being a douche.
posted by zippy at 12:13 AM on January 9, 2011 [1 favorite]

howfar: "I would imagine their corporate desire for enormous amounts of money has something to do with it"

And this is inherently a bad thing because...
posted by falameufilho at 6:41 AM on January 10, 2011

And this is inherently a bad thing because...

... the relentless drive toward continually expanding profitability and shareholder value that characterizes corporate behavior is increasingly often at odds with the common social good, the health of the citizenry at large and the environment, and the rule of law as opposed to the rule of pure economic power.

Those are just off the top of my head.
posted by flapjax at midnite at 5:42 PM on January 10, 2011 [1 favorite]

One messy thing for Apple will be sales tax in the app, ebook and music stores. If I buy a book or cd at Borders I pay sales tax, but an ebook or an mp3 isnt. It won't be long before it gets weird. Also is it for my local tax district or for the place my phone downloads it.
posted by humanfont at 6:33 AM on January 11, 2011