Amazon to collect sales tax in Texas

[MichaelB]

The cost of living will be a little higher in Texas. Amazon has reached an agreement with the state of Texas to begin collecting sales tax on all purchases made by state residents.

Amazon.com will start collecting sales taxes on all online purchases made in Texas beginning July 1 under an agreement that settles a dispute with the state.

Article here Amazon's Texas customers to start paying sales tax - Houston Chronicle

 

[LRDave]

Domino #1? Could be ominous......

 

[freebird5825]

from Sales-tax deal with Texas is Amazon's latest | Reuters

According to its website, it already collects sales tax in five of the 50 states -- Kansas, Kentucky, New York, North Dakota and Washington -- on purchases made by people who live in those states. Those are the five states where it has physical facilities or affiliated sellers and no agreement with state governments exempting Amazon from collecting sales tax.

Unfortunately, domino # 6.

 

[MichaelB]

Domino #1? Could be ominous......

More like the momentum builds. This is number 6

Items sold by Amazon.com LLC, or its subsidiaries, and shipped to destinations in the states of Kansas, Kentucky, New York, North Dakota, or Washington are subject to tax.

Amazon.com Help: Sales Tax

edit - cross posted with freebird. New avatar...nice.

 

[REWahoo]

Domino #1? Could be ominous......

Nope, not ominous. Domino's already collects sales taxes in TX.

 

[MichaelB]

Nope, not ominous. Domino's already collects sales taxes in TX.

I didn't know you ate ethnic food in Texas...

 

[REWahoo]

I didn't know you ate ethnic food in Texas...

¡Yo quiero Taco Bell!

 

[freebird5825]

More like the momentum builds. This is number 6
Amazon.com Help: Sales Tax

edit - cross posted with freebird. New avatar...nice.

But I did beat ya by 1 minute on the post.

 

[MichaelB]

But I did beat ya by 1 minute on the post.

I know. I was busy admiring the new avatar.

 

[bssc]

I noticed on my last Kindle purchase, they collected sales tax in Arizona.

 

[flyfishnevada]

They are going to start in Nevada in 2014.

 

[ziggy29]

To tie this into FIRE, if this catches on it makes moving to a state with no sales tax more attractive....

 

[Nodak]

Amazon has been collecting ND sales tax for a few years now. Right after they acquired a business in Grand Forks.

 

[ERD50]

I'm on the fence on this. On one hand, it seems to give internet companies an 'unfair' advantage over brick & mortar stores. OTOH, an internet company with no B&M presence also isn't using any resources of the State, so why do state taxes need to be collected? The delivery companies operating within the state are paying taxes to the State - isn't that enough?

What I don't like is the state telling me I need to track this. I can have one Amazon order with multiple items, one might include IL tax because that company has B&M in IL, and another does not. That's a fair amount of book-keeping. When you pay at the register, it is done for you, including all the various taxes for food, services, medicine, etc.

-ERD50

 

[rescueme]

Pennsylvania just changed their income tax form to "capture" sales tax on internet (and other) out of state purchases.

Regardless if the internet company (such as Amazon) collects tax or not, they are now expecting you to report/pay taxes due.

Of course, you could "forget" to report it on the tax form, but as "the man" said, "Well, do you feel lucky, punk?" ...

 

[ziggy29]

I'm on the fence on this. On one hand, it seems to give internet companies an 'unfair' advantage over brick & mortar stores. OTOH, an internet company with no B&M presence also isn't using any resources of the State, so why do state taxes need to be collected? The delivery companies operating within the state are paying taxes to the State - isn't that enough?

What I don't like is the state telling me I need to track this. I can have one Amazon order with multiple items, one might include IL tax because that company has B&M in IL, and another does not. That's a fair amount of book-keeping. When you pay at the register, it is done for you, including all the various taxes for food, services, medicine, etc.

This is one example where I think Congress needs to get involved and lead. This is undeniably an interstate commerce question in most cases, and that is clearly the role of Congress to sort out. It should be done in a way that doesn't add excessive bookkeeping responsibilities on consumers, but to me it's clearly something Congress needs to settle once and for all.

 

[REWahoo]

This is one example where I think Congress needs to get involved and lead. This is undeniably an interstate commerce question in most cases, and that is clearly the role of Congress to sort out. It should be done in a way that doesn't add excessive bookkeeping responsibilities on consumers, but to me it's clearly something Congress needs to settle once and for all.

+1

The "excessive bookkeeping responsibilities on consumers" pales in comparison to the burden placed on the Amazons of the world to accurately collect and remit sales tax.

Think about it - for every single shipping address in the US the seller must know the correct state, city, county, metro transit district, etc. sales tax % - and what is exempted. Plus, the tax rates and taxing entities are constantly changing.

Sales tax collection and remittance is a huge burden for a company to implement and administer, capped by auditors from each of the 50 states who want to spend a couple of weeks each year bugging the finance staff to verify the company has been collecting and paying their fair share. Been there, done that and can attest that it is an onerous business responsibility.

Standardization of interstate sales taxes by Congress makes a lot of sense, which means it will not happen for many years to come...

 

[audreyh1]

At least Texas let's me order wine direct from out of state wineries now. These small wineries have to know the wine shipping rules for each state, which are all over the map (pun!). And collect the taxes. And there is special shipping. In Texas, there are limits for how many bottles of wine each customer can order from a given winery each 3 month period (something like that), so each winery has to keep track for each customer. And each winery has to obtain a TX sales permit each year. But it's working now! 80% of the WA wineries we visited last year ship to TX customers now - yay!

 

[gindie]

I'm probably the only person in Ohio that actually computes and pays "use tax" every year on my state income tax. This is the sales tax for internet and mail order purchases. So, it wouldn't bother me for Amazon (and others) to charge it.

 

[Texas Proud]

+1

The "excessive bookkeeping responsibilities on consumers" pales in comparison to the burden placed on the Amazons of the world to accurately collect and remit sales tax.

Think about it - for every single shipping address in the US the seller must know the correct state, city, county, metro transit district, etc. sales tax % - and what is exempted. Plus, the tax rates and taxing entities are constantly changing.

Sales tax collection and remittance is a huge burden for a company to implement and administer, capped by auditors from each of the 50 states who want to spend a couple of weeks each year bugging the finance staff to verify the company has been collecting and paying their fair share. Been there, done that and can attest that it is an onerous business responsibility.

Standardization of interstate sales taxes by Congress makes a lot of sense, which means it will not happen for many years to come...

There are a few companies that will do all this for you....

But you also forget about what is taxable and what is not... electronically delivered programs in a number of states are not taxable, but in others they are... again, the companies keep track of this for you also...

 

[audreyh1]

Ooooo! I loved this line:

Combs also said consumers who will start paying more for Amazon products come July 1 should keep in mind that this change was designed to help their "friends and neighbors" who own businesses and "show up at the football games on Friday*night."

Boy, I am such an unpatriotic neighbor, as I do not attend the Frday night (high school) football games to demonstrate my local spirit. Is that a requirement of joining the local chamber of commerce? My husband grew up in a tiny Texas town with such a lack of local entertainment that everybody went to the Friday night football game, and that was all everyone talked about all weekend. And it's not like the local team was really any good either. The high school was so small that almost every male student had to be on the team. Wow - the tradition thrives!

 

[eytonxav]

Watch for Amazon's revenue to drop, put your sell orders in now

 

[2B]

This is one example where I think Congress needs to get involved and lead. This is undeniably an interstate commerce question in most cases, and that is clearly the role of Congress to sort out. It should be done in a way that doesn't add excessive bookkeeping responsibilities on consumers, but to me it's clearly something Congress needs to settle once and for all.

Congress did get involved. They passed a law exempting internet transactions from local/state sales taxes unless the internet company had a physical presence. The states came up with the idea of saying residents must "self-report" the sales taxes they "owe" by buying from internet companies without a physical presence in their state. I would think these laws are superceded by the Federal law since they are regulating interstate commerce. The states, IMHO, are attempting to tamper with the federal statute unconstitutionally.

As a Texan, I'll be looking for alternatives to Amazon.

 

[Texas Proud]

Congress did get involved. They passed a law exempting internet transactions from local/state sales taxes unless the internet company had a physical presence. The states came up with the idea of saying residents must "self-report" the sales taxes they "owe" by buying from internet companies without a physical presence in their state. I would think these laws are superceded by the Federal law since they are regulating interstate commerce. The states, IMHO, are attempting to tamper with the federal statute unconstitutionally.

As a Texan, I'll be looking for alternatives to Amazon.

This is not a new thing.... and the 'use' tax is also not new... it has been around even before there was an internet...

Anything that you have bought from out of state you were supposed to file a use tax return and pay the tax... this goes way back to the 800 number catalog sales... do not think that the state has changed just because there is an internet...

Also, it does not matter if you have a physical presence... it is nexus... if you read the article they talk about making sure executives etc. do not even visit some states. Some states will claim a company has nexus just by attending some trade shows...

With the states having all these budget problems, they are not going to let these sales taxes go away without a fight... we are talking billions of dollars that would go to states...

US Supreme Court Petitioned to Rule on Nexus Confusion | Nexus Negotiator

Here is the original Supreme Court case that said that an out of state company did not have to collect sales taxes:

Quill Corp. v. North Dakota - Wikipedia, the free encyclopedia

 

[Bestwifeever]

There are a few companies that will do all this for you....

But you also forget about what is taxable and what is not... electronically delivered programs in a number of states are not taxable, but in others they are... again, the companies keep track of this for you also...

Yes, I thought the same thing--somebody's offering to take care of this for Amazon. Or Target, or Macy's, or Sears, or PetSmart, or anyone who sells online across state lines. It's been somewhat of an unfair advantage for Amazon imho.