State push to collect sales tax from Amazon could end revenue source for area Web sites

The Globe reports: State prods Amazon to collect sales taxes.

Steve Garfield notes that every time Amazon agrees (after kicking and screaming) to collect sales tax on purchases from specific states, one of the first thing it does is block people in those state from making commissions on Amazon sales through their sites. So? He says the measure would hurt small businesses that rely on Amazon sales - and which are required to pay taxes on that income.

Ed. note: I sell stuff via Amazon (and other sources). It's never brought in much (except for the three months after the 2004 World Series, when, for some reason, one of my sites was one of the top three Google results for "Red Sox clothing"), so the impact on me would be more the pain of having to remove all those Amazon links.

Neighborhoods: 

Topics: 

Free tagging: 

    Comments

    Well, let's be clear here

    By on

    Well, Amazon *chooses* to block commission-based sales in states collecting sales taxes. To me, their behavior is childish. For a host of reasons, I buy absolutely nothing at Amazon (and for similar, though different, reasons, I have never stepped foot in a Walmart). Many businesses allow websites to earn a commission on sales and there are choices beyond Amazon. Imagine, if people earned link-commissions through true choices, the wait of those real recommendations could earn everyone (besides Amazon I suppose) more income. (Hint: most independent bookstores have websites that allow commissions through links, for a start.)

    Go Ahead...

    By on

    Charge sales tax. Any given item is 20 - 30% cheaper on Amazon than in a B&M anyway. And I don't have to get in my car and go anywhere? Even better. With Amazon Prime, most things are at my door the next day.

    But of course, all the Pols will have you believe that it's supposed to "level the playing field" where in reality it's just a money-grab.

    up
    10

    New Hampshire

    By on

    There is always our friends to the North for any big ticket items.

    Of course it levels the

    By on

    Of course it levels the playing field.

    How is having store a pay tax but not store b level?

    If amazon charges exactly the same as your local store (which would mean a bigger profit to them because they dont pay rent, sales agents, utilities etc etc*) youd still buy online to save 6.5%. Thats not fair.

    Oh and by the way, next time you shop on amazon, take a closer look at their prices. Theyve had a steady upwards march this year. Some of the smaller objects (ie, hand soap) now cost $1 more than what my supermarket charges.

    *Yes amazon pays for warehousing, but so does everyone else.

    Amazon isn't just some dude

    By on

    Amazon isn't just some dude with a website. They have a massive amount of employees and an infrastructure that is totally different from a B+M retailer. They have a lot of operational expenses.

    It does seem fair to have them collect sales tax, though. Is there a law that says if you do X dollars in sales within a state (or commonwealth) you need to charge and then pay a sales tax? Would that make sense?

    Department of redundancy department

    By on

    Wait, what?

    State push to collect sales tax from Amazon to collect sales tax could end revenue source for area Web sites

    Either I'm misunderstanding a joke in the headline, or there’s a repeated four word phrase that should come out.

    State push to collect sales tax from Amazon could end revenue source for area Web sites

    …or…

    State push to collect for Amazon to collect sales tax could end revenue source for area Web sites

    …or am I missing something?

    No, don't go ahead

    By on

    I actually pay my taxes, including the "Safe Harbor" tax that covers any online purchases under $1000. If Amazon starts collecting sales tax, I will be forced to either tally up every non-Amazon online purchase to pay sales tax on it, or continue paying the "Safe Harbor" tax, which already covers Amazon purchases, effectively double-dipping the tax on those goods.

    The "Safe Harbor" tax is an entirely affordable way to buy untaxed merchandise online without violating MA tax law. I wish more people used it instead of dodging.

    Pigs at the trough and #imnotapiggybank

    By on

    Now I get it if they want Amazon to pay taxes and I get it if they want to increase the gas tax to target funds for the T and other transportation issues. What I don't get is why this is incremental revenue. Wikipedia cites a source noting us as 11th in local tax burden already in the country - and that's probably measured as a percentage of income or GSP. As a wealthy state in real dollars we are probably right up near the top. If they want to add these taxes - OK - fine. But then bring down the sales tax rate to even out the burden so that it's revenue neutral.

    I've had it and I'm taking steps to incur fewer taxable transactions - my wife and I will be eating at home more, we will be bringing our breakfast/lunch to work instead of buying at the local shop etc.

    If you care to follow along and/or join me I've set up a twitter account - #imnotapiggybank to share ideas about where you can cut back easily and send a message to our various governments, all of whom seem to be hell bent on incremental revenue, that they are not entitled to 110% of our income.

    (note - I'm new to twitter and it also appears they are having some coding problems with new accounts/passwords - so if you can't find it immediately, check back in a day or two - I'm working on it)

    Don't worry! As soon as the

    By on

    Don't worry! As soon as the government starts taxing internet usage (for both revenue and to "level the playing field" for broadcast & print media)this will be a moot point.

    I think the state should

    By on

    I think the state should eliminate the sales tax on any item under $100, and impose it on clothing over $100.

    How much money and time are wasted collecting sales tax for small purchases?

    How much to small purchases add up to?

    By on

    I think the state should eliminate the sales tax on any item under $100, and impose it on clothing over $100.

    How much money and time are wasted collecting sales tax for small purchases?

    What you're suggesting would in effect mean that, for example, a huge chain like CVS or Walgreens would end up collecting almost zero sales taxes, as nearly everything they sell is under $100. Heck, the vast majority of stuff at Target or Walmart or any of the other department stores or supermarkets is under $100, so they’d all collect way less, too.

    And if people got used to that, then it woud become annoying to have to only pay taxes on the big ticket items, so even more of those sales would happen online at retailers that don't collect sales tax, or they'd drive up to New Hampshire.

    What you're proposing is a pretty radical change, and I don't think that clothing taxes over $100 would be nearly enough to offset the revenue hit it would entail. The transactional cost (time & money) of collecting the sales tax on low-cost items is very small: the registers all have software to do the (simple) math, so it's not like it's slowing down the transaction in the slightest, unless you're really worried about the microseconds that the register spends adding X+(0.0625X).

    There is, of course, an out of pocket cost to consumers, but if your proposal were to go through, then the government would have to either find a way to offset the (huge, I suspect) loss in revenue by taxing other things instead, or it would have to reduce services proportionately. Those may be worth considering, but they would have to be considered before taking this seriously.