Menino, other mayors want state to tax Amazon purchases

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Even with sales tax

Amazon's still cheaper. It's not going to "level the playing field for Main Street stores," it's going to allow the state and cities to maintain their tax coffers even when all of the Main Street stores have failed and shut.

This is why qvc gets to charge me sales tax

Ok, first off, stop laughing at the thought of me buying stuff from qvc.com. They have some of the best cosmetics in the country.

They get to charge me sales tax because they have a warehouse out in Shrewsbury. Because they have some kind of physical presence in the state of MA, they charge sales tax to ship to MA.

Exactly, Death of Retail

And amazon is already running a trial program of it's same day shipping to Boston area homes. Retail isn't going to compete, it can't. Amazon can offer better products, cheaper, with exponentially better customer service.

What will compete is actually smaller mom and pop stores that focus on high end, better quality products, exceptional customer service and in store experience, and have a small online footprint. Brands will follow suit with small brand style stores, such as apple and sony are already doing in higher traffic areas.

These stores are already starting to make appearances around the country, now that the next generation of owners know how to compete with both with ultra cheap box stores that suck in quality and user experience, and knowing how to use online to their advantage.

Meanwhile box stores and shopping malls, with their large overhead, are not going to be around much longer.

Actually, no Amazon isn't always better

I work for a publisher in Massachusetts, and no - Amazon's prices are low on some things, but for most books the difference is 5% or 6%. Now, of course, if you're looking for the same book at the same time as everyone else is (i.e. a current bestseller), then yes, the discount on Amazon is probably much more. Algorithms are handy that way. But if you want a niche book? Then good luck with that discount.

But the bottom line is that I believe that authors should be paid for their work, and at a living wage. Writing shouldn't be a profession only practiced by those who are paid elsewhere, or are already wealthy.

And I don't support a business - Amazon - that hires lobbyists to avoid paying sales tax, and removes authors from their shelves at a whim (see: homosexual content, cover image disputes with the publisher, desire to not pay bills to content providers, removal of paid content from consumers' Kindles without notice, etc.). I'd avoid any business with these practices, and Amazon's desire to control both publishing and bookselling is, frankly, a danger to free speech. And I don't think that's too strong of a statement - it's something I think about every day.

The publishing industry is no

The publishing industry is no different than the music or movie industry and DESPERATELY needs to catchup with the 21st century.

Asking your competition to be legislated out of existence only proves an unwillingness to innovate and compete.

same rules for all

IMO, we should end the tax on books for all, or require all retailers to collect the tax.

If the tax advantage is so great for online retailers that it could make local bookstores unprofitable then there's a good argument for creating a more level playing field. I'd like to see a comparison of the volume of sales at online retailers over time and declining revenue or closures of local book stores.

Government's role is to establish equitable rules for a marketplace. That fundamental role is often overshadowed by advocates who have an advantage in the marketplace and don't want to lose it.

Local Bookstores

at least around Boston, have actually been holding their own. It's been the big box book stores that have been running into big problems, and failing.

As said above, local book stores have figured out a model of not only providing good wares, but a great personal experience. They mostly have some kind of online presence, and they keep their customers close.

It's still rougher out in suburbia, but I think that will change as lessons are passed on.

Today I learned after 50+

Today I learned after 50+ years in Boston and suburbia: Wellesley, Winchester, Arlington, Waltham, and Concord ARE NOT suburbs of Boston. Blew my mind but that's easy to do. How can you say Concord is not a suburb?

This clownnwe have for mayor

needs to be slapped.

Our political boundaries [municipal/city/town boundaries], tax base, and the manner that we raise taxes is all screwed up and antiquated. The City of Boston has a tax problem because it's boundaries are stagnant circa 1912, and much of the so-called middle class have moved out of the city boundaries.

Bullshit

We have a development and density problem.

There's huge demand to live in Boston, yet we only seem to be adding a couple hundred luxury residences a year. Both the city, and the state need to get off their high horses and to start promoting denser and cheaper building in this state. We need to start retaining more students, and doing a better job of driving down the age of the population.

Otherwise were going to be having some serious economic issues in 30 years when the boomers start hitting the bucket, and the young have started families elsewhere.

How will you do cheaper?

When Menino wants developers to fund his pet projects and parks, developers can't do cheaper. Of course, no matter the cost to developers, they will still sell at market rate...except for Chapter 40B laws which force higher costs of housing on most people and discourage development.

Greater Boston ranks 3rd in

Greater Boston ranks 3rd in the US in the % of the workforce that has graduated college. DC and San Fran are #1 and #2. So I think Boston is doing well in attracting college grads.

Sure

And 30% of Cambridgeians hold Masters degrees or higher.

Gen X and Y stayed, and now have kids in the system. But check out the late Gen Y / Millennials. They're fleeing from the high cost of living and housing costs, for cities that will allow them to pay down their mountains of student debt and raise families. They might move back, but there is no guarantee.

We're fine at the top of the fields, but the big squishy middle class that runs our economic engines is moving south.

They Don't Mind the Tax

Amazon gave up its fight against collection state sales taxes and as now has something even more lucrative to offer: Cheap next or same day shipping. They've opened up distribution centers near every major metropolitan area (There is one in Shrewsbury outside Worcester) and this lets them ship products very fast. Many items now have same-day shipping for $4 to the Boston area. It's getting to the point where local retailers can't complete -- Amazon's prices are already lower even with shipping and plenty of people are just as happy to have the item delivered to their house late in the day or the next day as opposed to going out to a local store and buying the item in person. The extra 6.25 for tax (or lack thereof) isn't a major selling point anymore -- prompt home delivery is.

Sadly I use this myself. I work nearly every day from 9am-Midnight so I don't have time for shopping. I don't mind paying a few extra dollars if I can have what I need by tomorrow morning -- it still beats waiting for a few weeks to find time to make it to a store.

If Amazon's agressive shipping/pricing is going to hurt local business that much more the state might as well collect the tax and put the money toward the unemployment of the people who lost their jobs due to Amazon anyway.

These sales are "taxed"

We are not arguing about the taxes owed. We are arguing about who collects it. If you are a Mass resident and you buy a product out of state with the intent of using it in Mass - you owe the tax.

The state just wants an easy way to enforce it and they are transferring the cost of collection to the retailer.

Looks like CA just got them to comply - but not sure what leverage they used. There are some rules that the company is responsible to collect it if you have a physical retail presence in the state - I don't think a distribution center qualifies.

If you don't pay the taxes on these items - you are technically a tax evader.

Good point.

Good point. What's the collection rate of sales tax on products sold by e-retailers to MA residents? If it's low, then as a matter of practice, These sales are not "taxed".

You say "transferring the cost of collection to the retailer." Isn't that how it works in most retailers? I bet you'll know this. Why are Mass.-based, brick and mortar retailers required to collect the tax?

Taxable is a better word

Correct - they are not "taxed" because almost nobody pays the taxes on this stuff. However, it is a taxable transaction.

I believe the state has the right to assign the duty of collection to the point of purchase - not sure if this is statutory, constitutional or both.

The conflict is when you cross state lines because the feds control interstate commerce (there was a recent case that Mass lost when they tried to get a tire dealer in NH to collect tax on tires they sold to people with Mass plates on their car - the courts pretty much laughed at them).

As for Lanny's point below - I don't know - I thought I heard there was a debate over that so to be on the safe side Amazon or some internet retailer moved their distribution center to RI - but I think someone mentioned they have one near Worcester now. I think it's still open to legal challenge as to whether a pure distribution center is obligated to collect taxes sales where the transaction takes place over the net but the product is shipped from in-state -but many will just avoid that by setting up somewhere tax free like NH or where it's only a small portion of sales - like RI.

Amazon Prime > driving to the store

I love Amazon Prime because I can search for something, buy it and have it show up at my door in a day or two.

I'm not sure about the warehouse in Shrewsbury. If they had one there, they would already be charging sales tax to MA residents. My stuff comes from Concord, NH, conveniently located in tax free New Hampshire.

Double dipping?

But I feel like I'm already paying this tax, since we calculate a "safe harbor" tax for out-of-state online purchases, based on income, when we figure our Mass. taxes. Are they going to do away with that? Or are we supposed to save our Amazon receipts and deduct those? I do much of my shopping online and I've never bothered to keep track of the receipts. But I will start doing so if it saves us money.

I'm okay with paying sales tax once, but not twice.

good point

I'd rather they collect from all online merchants or none of them.
I generally use the safe harbor calculation also and if you buy your stuff from different places it would become a headache trying to figure out which merchants collected the tax and which didn't.

Yeah, we shouldn't double-dip

I'd rather we start enforcing interstate sales tax and just get rid of the safe harbor provision entirely. You're never going to catch things like people driving to New Hampshire to load up on liquor, but tax enforcement on internet purchases isn't actually all that tough a problem. I work for a company that implemented a system for it five years ago, and while it does require some diligence (you have to pay someone for the data files for moving county borders and volatile tax rates, for instance), it should just be considered a matter of basic compliance if you want to sell things over the internet and ship across state lines. If you make violations ruinously expensive (say, 25x damages), and 'randomly' audit a couple of high-profile vendors early on, you'll have 95% compliance within a couple of years.

20% of sales tax goes to MBTA

Many of you will be glad to pay the sales tax in support of the MBTA. People outside the MBTA service area, not so much. Sending your money and jobs out of state to e-tailers is the natural consequence of more difficult and expensive transportation. We'll be left mostly with bank branches, cell phone stores, Starbucks, hair/nail salons, and eateries.

Of course when possible, it's

Of course when possible, it's important to shop at the store you want to remain in your neighborhood / city. However, if you can't get what you're looking for nearby, it is possible to shop locally on amazon. I found an out of print classical CD I had been searching for on amazon that was sold by Orpheus on Comm. Ave. So naturally, I called Orpheus and they said that the owner had that CD and all of the stock listed with amazon at his house as opposed to in the store. He told me to send him a list of what I wanted from his amazon 'store' and he would bring it to the brick & mortar the next day. Worked out beautifully.

In this Walmart era, many local retailers are forced to give up their brick & mortar presence or downsize to the point where they are forced to supplement their sales via online sites like abebooks, amazon, ebay, alibris, etc. When you're picking which seller to buy from on these sites, just buy from the most local one.