Taxpayers May Be Audited For Amazon Purchases

mhpbooks.com:

Among the many rather thuggish hissy fits Amazon has thrown at states who want it to collect sales taxes like all the other retailers within their borders, the fit the behemoth from Seattle threw at Texas was among its nastiest: when the state presented it with a bill for $269 million dollars due in uncollected sales taxes, the company said it would fire all of its 119 employees there and close a major distribution center in the town of Irving if they were actually forced to, er, pay their taxes.

Read the whole story: mhpbooks.com

Comments

[dwnmw4ever]

02:40 PM on 05/01/2011

The day I have to start paying on my internet purchased (which is where I primarily shop). this is the day I stop buying anything but food,gas and hope this nation spirals into the next great depression with investors and the rich (or now...former rich) people jumping out of windows

[MrsGreebers]

08:22 PM on 04/20/2011

Lots of misleading Info here. First, These campaigns to "make Amazon pay it's taxes" are not grass-roots efforts to defend Main Street USA. Wal-mart is behind this so it's AstroTurfing.

Second, it's not some tax dodge Amazon thought up. Catalog retailers since before the WWW also don't collect sales tax unless they have "physical presence." When the states lost that Supreme Court case they passed laws requiring consumers to pay "use tax" - which nobody pays because there's no mechanism other than the honor system.

(Some states' anti-Amazon laws have attempted to force Amazon to turn over its customer purchase records so they can bill you for the use tax.)

But someone figured out that affiliate marketers could be mischaracterized as "physical presence." These are people and companies that place links to Amazon in exchange for a kickback. In other words, they sell advertising to Amazon. This "logic" is akin to saying that a newspaper, by running a store's ads, becomes a physical presence of that store. But no state will collect a penny because Amazon simply drops the affiliates in that state. For shoppers, nothing changes. The benefit to Amazon's competitors with stores is that affiliated now have to join another store's program -- presumably one with a physical presence in their state.

What Wal-mart, Best Buy and the others accomplished is a big SEO play by getting those links for themselves.

Any actual small business that backs this "main street fairness" thing is being duped. It's about consolidating

[StoutHouse]

10:18 AM on 04/21/2011

1) You're mistaken. This is a grassroots movement that has been in the works for years, led mostly by indie retailers, who are always first to feel the pain of unfair system-gam­ing like this. Walmart, Target, Best Buy and others came on board only recently, when they started to feel the financial impact that had already put thousands of independen­t retailers out of business.

2) No one is saying this tax evasion is unique to Amazon. But they are the most masterful practitioners of tax avoidance. The most aggressive. It's no coincidence that New York's e-fairness law, which was recently upheld in New York's Supreme Court, is known at the "Amazon Law," although it applies to many online retailers.

3) It's not about some nebulous notion of affiliates as "nexus." In the many states where Amazon has multi-mill­ion square foot distributi­on warehouses (a physical nexus if ever one existed), taxes are required of residents who live in those states. Yet Amazon has structured their accounting in such a way that these buildings, offices, and countless millions of dollars in inventory are "owned" by a subsidiary company. It's a tax loophole, utterly bogus, and as New York's Amazon Law shows, it's ripe for reformatio­n nationwide­.

[Wingsweaver]

09:41 AM on 04/20/2011

Why should the rich be the only ones allowed to dodge taxes?

[MrsGreebers]

08:33 PM on 04/20/2011

I don't know about Texas but in other states it's actually the consumers who've been dodging their sales taxes because out-of-state retailers like Amazon don't have to collect them.

Their competitors want you to think Amazon specifically has come up with a new tax cheat. They also want you to think this is about a fair shake for Mom and Pop but this is a Wal-mart backed effort. The "logic" is it's so, like, unfaaaaiiirrr that Amazon looks cheaper without sales tax. (Somehow the added cost of shipping for online purchases never makes it to the occasion.)

I shop online because my hard-to-find shoe size (for example) is basically absent from the local stores. No sales tax law will change that.

[StoutHouse]

10:25 AM on 04/21/2011

Actually, it's customers and Amazon alike who have been dodging these taxes. The difference is that Amazon is fully aware of it, and works hard to leave their customers in the dark. Thus the need for a federal enforcement law. Collect the tax at the point of purchase as Walmart, Target, and Best Buy do, and the problem disappears.

As for your shipping argument, as you likely know, shipping is free when you spend $25 or more on Amazon. If anything, shipping costs earn Amazon even more revenue. Buyers who are close to the $25 threshold typically buy another item in order to get free shipping.

[shthar]

10:19 PM on 04/19/2011

Eventually one or more states is going to realise if they Don't have these taxes, all the internet companies will relocate, or stay, there.

[Baileygk]

05:48 PM on 04/19/2011

Can you say internet tax?

[StoutHouse]

10:08 AM on 04/20/2011

This is an already existing law, not a so-called Internet tax. Amazon does its customers the favor of requiring them to self-report these taxes, all the while doing everything they can to hide the fact that those taxes are owed. Classy. If states do start auditing Amazon customers, even if only to make high-profile examples of a few to frighten the many, I hope there's a huge class-action lawsuit against Amazon, who has based their business model on tax evasion and the willful deception of millions of customers who have now been exposed to tax liability and penalty. And all this from a corporate behemoth that's been voted "America's Most Reputable Company."

[MrsGreebers]

08:49 PM on 04/20/2011

How is this different from all other out of state retailers? I've been ordering from out-of-state stores for as long as I can remember and have NEVER been warned to please keep track of my purchase and report it to my state at tax time.

Come to think of it, I don't remember ever being asked about out-of-state purchases by the Block state tax software I've been using all these years, so the idea that the deception is Amazon-specific is unfair.

Look into the Main Street Fairness [sic] movement [sic] and you'll find this is a hardball tactic from Wal-mart.

True mom and pop stores DO have a problem due to e-commerce -- they can't compete on variety of products, selection, product reviews, etc. No matter what the tax situation is.

But this campaign only pretends to be about them.