Get Ready to Pay Sales Tax on Amazon in more states

[Semiretired2008]

It seems Amazon is supporting the notion of taxing on-line purchases more and more as it is growing distribution centers across the nation, which increases its brick and mortar presence.

"Amazon believes the sales tax issue needs to be resolved at the federal level and we're actively working with the states, retailers and Congress to get federal legislation passed," said Scott Stanzel, an Amazon spokesman.

Other online merchants, however, oppose the legislation. The consortium, called NetChoice, includes Yahoo, AOL, Facebook, Oracle, Overstock.com, NewsCorp, IAC, Expedia and eBay.

Get Ready to Pay Sales Tax on Amazon - Yahoo! Finance

 

[REWahoo]

For some of us this is already a fait accompli: http://www.early-retirement.org/forums/f28/amazon-to-collect-sales-tax-in-texas-61197.html

EDIT: I was surprised to discover under the new agreement not everything ordered from Amazon is taxed. Last week I purchased something via the Amazon website from a third party "fulfilled by Amazon" (free shipping via Prime) and paid no sales tax, while an item I purchased from Amazon was taxed.

 

[Semiretired2008]

That may change in the near future with Amazon now supporting the internet tax move...

 

[bssc]

I suspect that Amazon will need to collect taxes because they will need to be in every state if they move forward with their same day delivery plan.

Amazon same-day delivery: How the e-commerce giant will destroy local retail. - Slate Magazine

 

[haha]

Since I live in Washington, I have always paid sales tax to Amazon. IMO, still the best thing going. Occasionally I buy something from another online retailer, but the experience is rarely up to Amazon.

I was in a Walgreen's downtown the other day looking for some dental stuff formerly easy to find, but no longer. The store was full of candy and other impulse purchases, but not many of the usual OTC drugstore items. It may be that soon we will increasingly need to buy online, because Amazon has forced stores to seek higher and higher inventory turnover. Amazon has sure ended the used book business, and is close to putting away the new book business.

Amazon is even selling designer clothing with $450-800 price points.

I use Amazon prime, and I have 4 pick-up points available by walking, including a 24 hour 7-11 only 2-3 blocks from my home. When I can use this, I prefer it to home delivery, because unless the UPS guy can get in, he is not going to leave a package like he often will in the suburbs.

Ha

 

[Animorph]

For some of us this is already a fait accompli: http://www.early-retirement.org/forums/f28/amazon-to-collect-sales-tax-in-texas-61197.html

EDIT: I was surprised to discover under the new agreement not everything ordered from Amazon is taxed. Last week I purchased something via the Amazon website from a third party "fulfilled by Amazon" (free shipping via Prime) and paid no sales tax, while an item I purchased from Amazon was taxed.

We do not pay tax on some some items in-state. and of course local taxes are all different. I can't imagine tracking categorization and localization for all states.

 

[Brat]

There is a software firm on Bainbridge Island that has been developing a program that will compute sales tax for internet retailers, a former neighbor is their CEO. One of the problems they have encountered is that zip code, for example, is not a perfect match to taxing districts.

I am SO happy that I don't have to deal with this.

 

[REWahoo]

We do not pay tax on some some items in-state. and of course local taxes are all different. I can't imagine tracking categorization and localization for all states.

There is a software firm on Bainbridge Island that has been developing a program that will compute sales tax for internet retailers, a former neighbor is their CEO. One of the problems they have encountered is that zip code, for example, is not a perfect match to taxing districts.

I am SO happy that I don't have to deal with this.

I agree, and made similar observations in our previous discussion here: http://www.early-retirement.org/for...ect-sales-tax-in-texas-61197.html#post1190234

A couple of posters seemed to think accurately tracking what surely must be several hundred thousand different taxing requirements isn't much of a challenge. Obviously they never had to deal with it and don't appreciate what a miserable task this is.

 

[MichaelB]

Our experience is similar to Mr. Ha's. Increasingly we are buying from Amazon because they have stock and a wider range of product options, while the local stores, mostly national chains, are offering things we don't want. I also see empty shelves much more frequently now at places like Target.

Business reacts or goes under, so I am sure the brick and mortar stores will adjust and find a way to compete, but this is really quite an amazing transformation of consumer retail.

 

[Bestwifeever]

But there already are a lot of retail places that sell across the country that have to pay sales tax to different communities--Target, Walmart, Macy's, Sears, the Pottery Barns and Nordstroms. Surely there is already tax computation software these companies are using. Amazon will not be figuring out each individual code.

I'm waiting for Amazon to start up some brick and mortar stores now .

 

[Brat]

But there already are a lot of retail places that sell across the country that have to pay sales tax to different communities--Target, Walmart, Macy's, Sears, the Pottery Barns and Nordstroms. Surely there is already tax computation software these companies are using. Amazon will not be figuring out each individual code.

I'm waiting for Amazon to start up some brick and mortar stores now .

The difference is that taxi is charged based on the location of the retailer, not the address of the customer.

 

[Chuckanut]

FWIIW, Amazon is considering going to same day delivery. That would require a physical presence in most large states, thus triggering the sales tax. Therefore, avoiding sales tax collection is no longer a big issue, since they will lose it when they go to same day delivery. That's the theory, we will find out if it is correct.

 

[Bestwifeever]

The difference is that taxi is charged based on the location of the retailer, not the address of the customer.

So that would make calculating the tax rate quite simple, right?

 

[Alan]

The difference is that taxi is charged based on the location of the retailer, not the address of the customer.

So that would make calculating the tax rate quite simple, right?

I believe it is simple.

e.g. Walmart builds a store in a location and charges State and Local taxes based on where it is, not where its customers have traveled from to buy in the store. 10 miles away could be another Walmart store that charges a different local tax.

 

[Lsbcal]

In California Amazon will start the sales tax in September.

Stock up now.

 

[Texas Proud]

I agree, and made similar observations in our previous discussion here: http://www.early-retirement.org/for...ect-sales-tax-in-texas-61197.html#post1190234

A couple of posters seemed to think accurately tracking what surely must be several hundred thousand different taxing requirements isn't much of a challenge. Obviously they never had to deal with it and don't appreciate what a miserable task this is.

One of them being 'is it taxable or is it not'....

That question can be different in various states...


But, there are a few firms out there that do handle this for an internet retailer... or even a brick and mortar retailer...

 

[Alan]

FWIIW, Amazon is considering going to same day delivery. That would require a physical presence in most large states, thus triggering the sales tax. Therefore, avoiding sales tax collection is no longer a big issue, since they will lose it when they go to same day delivery. That's the theory, we will find out if it is correct.

I listened to a news item this morning that said consumers are more focused on fast delivery rather than sales tax. I guess the average consumer is not a member of this site where being frugal means being prepared to wait a few days to get the goods you are buying.

 

[Chuckanut]

I listened to a news item this morning that said consumers are more focused on fast delivery rather than sales tax. I guess the average consumer is not a member of this site where being frugal means being prepared to wait a few days to get the goods you are buying.

You probably heard the same news item I did. It also mentioned that Amazon shoppers tend to be in a higher income bracket than the general population, and probably work more in professional jobs where time is often of more value than money. OTOH, like you I will wait on delivery to save a dollar. I use the 'free' delivery whenever it is offered and rarely pay for a more rapid delivery.

 

[Texas Proud]

But there already are a lot of retail places that sell across the country that have to pay sales tax to different communities--Target, Walmart, Macy's, Sears, the Pottery Barns and Nordstroms. Surely there is already tax computation software these companies are using. Amazon will not be figuring out each individual code.

I'm waiting for Amazon to start up some brick and mortar stores now .

The difference is that taxi is charged based on the location of the retailer, not the address of the customer.

The sales tax is based on where the purchase is made... or where the goods are delivered...

So, in a brick location, it is easy... you charge taxes based on the retailer...

But, if you buy something online and ship it to a house, then that location is where the tax is calculated...

 

[REWahoo]

I believe it is simple.

e.g. Walmart builds a store in a location and charges State and Local taxes based on where it is, not where its customers have traveled from to buy in the store. 10 miles away could be another Walmart store that charges a different local tax.

+1

The complication with Amazon is they can't do this under most current state laws. They must charge the tax rates based on the delivery location, which can vary even within zip codes as Brat pointed out.

Yes, there are companies who can do this. No, it isn't cheap - collecting, remitting and documenting sales taxes is costly and a real PITA, especially dealing with the individual state tax auditors who show up every couple of years [-]to justify their jobs by squeezing additional tax revenue from the company, taxes not owed but paid so they will just go away and get out of your hair[/-].

Not that I have any experience in this area of course...

 

[farmerEd]

Its silly to think the complexity is something that can't be solved by a huge company like Amazon. Amazon is a huge company, with enormous resources and a major tech company to boot (maybe you all don't realize that besides shipping cheap books, they are a real force in the cloud computing platform - i.e. a real tech powerhouse). There are lots of lots of very smart people that work for amazon, (and they even have computers they can use to help them figure this stuff out).

That said, I am not in favor of them charging sales tax, or being forced to - I buy everything I can from them and I like saving money; will I stop doing business with them if they have to charge sales tax? Probably not, as long as they are still cheaper and still more convenient I will do business with them.

 

[REWahoo]

Its silly to think the complexity is something that can't be solved by a huge company like Amazon. Amazon is a huge company, with enormous resources and a major tech company to boot (maybe you all don't realize that besides shipping cheap books, they are a real force in the cloud computing platform - i.e. a real tech powerhouse). There are lots of lots of very smart people that work for amazon, (and they even have computers they can use to help them figure this stuff out).

Call me silly, but I don't believe I said anything about the inability of Amazon to do this. My comments were about the cost, complexity and PITAness of the process.

And I appreciate the heads up about them Amazon folks bein' smart and actually havin' computers. Ah hayd no ideer...

 

[MichaelB]

The law that allows companies like Amazon to not collect sales tax where they have no physical locations was designed to protect small businesses that could use the internet to grow. No doubt the sales tax complexity would put many of them out of business.

Many states charge "use tax', and it is the obligation of taxpayers to track their internet purchases and pay the appropriate amount of sales tax when they file their state tax returns. The threads in this forum show this is not common - it seems many of us are ruthless lawbreakers and tax evaders.

 

[MichaelB]

Call me silly,

Silly

 

[ziggy29]

Many states charge "use tax', and it is the obligation of taxpayers to track their internet purchases and pay the appropriate amount of sales tax when they file their state tax returns. The threads in this forum show this is not common - it seems many of us are ruthless lawbreakers and tax evaders.

I'm rarely a "Congress needs to do something" guy, but in THIS case I would much prefer to see a single standard for taxation of interstate commerce than creating a confusing patchwork of laws and reciprocal agreements between states.