It’s not that I hate Amazon; I shop with Amazon too, on occasion. But I do hate cheaters and it seems like AMZN has gotten a pass for far too long —
Take local sales tax, for example: as a retailer, I have to collect it. As an internet retailer, Amazon should have to collect it too — but they don’t. Please note, your local business do not charge sales tax, they collect it on your behalf to pay for local services, and the salaries of the government employees [your neighbors] who provide those services.
Amazon claims it shouldn’t have to collect these taxes [note: no one is asking Amazon to pay tax, they merely need to collect on your behalf] because it’s not a local company — Why, we’re up here in Washington State, what do you mean local sales tax? — but that’s not the issue:
Amazon’s customers are local — UPS trucks use local roads to deliver Amazon packages [roads maintained by taxes], Amazon’s customers’ kids go to local schools, Amazon’s customers’ civil disturbances are broken up by local police — heck, readers make use of local sewers when they read Amazon’s books [on certain occasions], sewer lines built using local taxes.
Local sales tax isn’t paid by the retailer, it’s paid by you, and your neighbors. Sure, you can opt not to pay tax if you order through Amazon — and Amazon is more than willing to be complicit in the act, as that translates into a 4-11% “discount” [depending on your particular locality] and that is a massive competitive advantage. The states of Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming don’t charge income tax so a majority of the state budget has to come from other sources, like sales tax. (Alaska and New Hampshire also don’t charge a state sales tax, but I’m sure local jurisdictions within those states do.)
Maybe we could move to an honor system, where no retailer has to collect the tax, and you just report your purchases for the year past every April, and you’re on your own coming up with the total tax bill. Then Amazon wouldn’t have to collect sales tax and neither would I and your yearly tax headache [and burden] would be tripled — instead of straight-forward automatic collection at point of sale you’d have to save all receipts, figure out what was bought where [as each muncipality, county, and state have different rates] and reconcile your tax burden on an individual basis for each jurisdiction. Sound like fun?
Here’s the plain, honest truth: Amazon will have to collect sales tax. Even if it takes an Act of Congress and a Supreme Court decision, it’s coming. It’s to Amazon’s advantage to prevaricate and dodge and lie and cheat for as long as they possibly can, though — and negotiate back room deals besides, because the alternative is competing fairly with other retailers on a level playing field — without additional discounts enabled by lies and tax evasion.
Amazon Knows This: and they have already built the website infrastructure necessary to comply with the law — so don’t listen to them if they say it would be “prohibitively expensive” to “radically change” the way they operate. Truth is, they already collect sales tax in 5 states.
A handy explanation is on their web site – and oh, yeah, you don’t want to know what they had to go through to accomodate the agency model for ebooks:
“ Kindle books, subscriptions and active content titles sold by various publishers are subject to sales tax based on the publisher’s state tax reporting obligations and the taxability of digital books in those states. As a result, sales tax for Kindle books sold by the publisher may differ from the sales tax to which you’ve been accustomed for Kindle products.”
And figuring out local sales tax based on the purchaser’s home address would be too hard to figure out. Right…
Amazon doesn’t want to get stuck paying sales tax twice — once at point of sale, and once at point of delivery. And that’s fine; it may in fact take an act of congress to work out how digital delivery of files count in terms of “point of sale” and taxable sales, and to clarify where internet sales of physical goods actually takes place (for tax purposes).
For Amazon, is the point of sale where their web server is located, or the warehouse? — or is the computer screen right in front of you? I think we all know who the customer is, and where they live, and where the sales tax should be going.