>to have gone unaddressed for so long by such a giant?
It's complicated because Amazon isn't the one who owes the state taxes -- it's the marketplace sellers. This is a different situation from the previous cases of "nexus" which determines state taxes that Amazon itself owes. That nexus case was resolved and Amazon has been paying its own state taxes for many years now.
In other words, Amazon already pays all sales taxes for items that say "Ships from and sold by Amazon.com." Amazon does not file sales taxes for items such as "Sold by RareOldBooks and Fulfilled by Amazon."
Even if Amazon added a "sales tax" line item for 3rd-party marketplace sellers, it's still up to those marketplace entities to properly file their state tax forms and declare Amazon sales revenue. The state regulators know that Amazon can't file on their behalf but they'd at least like some "help" from Amazon by way of audited reports so they know which marketplace sellers to pursue.
In contrast, Ebay does have the ability for sellers to add sales tax for bidders when they check out. However, it's optional. Ebay doesn't actually collect the sales tax money for sellers. In other words, Ebay is just providing a sales tax "calculator" rather than acting as a sales tax "collector". Paypal also doesn't collect and pay sales tax on behalf of sellers.
Amazon is making selling easy taking almost all of the steps out of the hands of the seller, sales tax should be included in this. If they don't come up with a way of facilitating tax payments and calculations in the same way they facilitate everything else, regulators are going to come and force them.
Couldn't Amazon basically offer them a TurboTax like service and basically generate all of the filled in filing forms the seller needs? Then it would be up to the seller to review with their accountant and actually submit.
Hasn't this long been answered with "yes" for #2 and "no" for the others? When I buy from Amazon, they pay sales tax where I live, but not where the item came from or any other place where they have a presence.
The only wrinkle is that #2 is not very well enforced when a company doesn't have a presence in the buyer's state, but it's still technically required.
Some (all?) states already have a use tax that people are supposed to pay. So, that takes care of the second *. Personally, I lean towards that's enough.
The state with the buyer should require through law the buyer to file a transaction record with their state revenue department for use tax unless the receipt contains a transaction ID showing tax was collected by the seller (can any of us argue this is hard in today’s age of API submissions? I don’t believe so).
Buyers then prefer sellers who collect taxes for them. This forces Amazon and other marketplaces to collect the tax.
The law already requires this in aggregate (use tax from the buyer of sales tax wasn’t paid). Very similar to how you can only claim dependents if your provide their social security number. Great way to bring entities into tax payment compliance.
Amazon got pressured to collect in some states by those states considering Associates and other programs to constitute a nexus.
Note that in most (all?) states [that have a sales tax] the buyers supposedly have to pay sales/use taxes anyway. The debate is whether Amazon has to collect those taxes on behalf of the state.
It seems the "right" solution here is for Amazon to pay the sales tax, so each marketplace seller doesn't have to deal with it. Of course Amazon keep the prices low (and sales up) but saying it's the sellers problem, knowing many of them are not paying their taxes.
The real answer is that states and local municipalities don't matter.
They are too weak to enforce their laws. Their decision making process comes down to enforcing its tax regime and possibly losing all the commerce when the big company just moves away -
increasing their irrelevancy and underfunding - or not bringing it up at all.
Only a select few governments, national governments, and multinational governments are relevant enough to coax corporations into compliance.
And even then, they are just trying, as the entire framework of their government's existence can be successfully challenged by the corporation's lawyers.
jasode|8 years ago
It's complicated because Amazon isn't the one who owes the state taxes -- it's the marketplace sellers. This is a different situation from the previous cases of "nexus" which determines state taxes that Amazon itself owes. That nexus case was resolved and Amazon has been paying its own state taxes for many years now.
In other words, Amazon already pays all sales taxes for items that say "Ships from and sold by Amazon.com." Amazon does not file sales taxes for items such as "Sold by RareOldBooks and Fulfilled by Amazon."
Even if Amazon added a "sales tax" line item for 3rd-party marketplace sellers, it's still up to those marketplace entities to properly file their state tax forms and declare Amazon sales revenue. The state regulators know that Amazon can't file on their behalf but they'd at least like some "help" from Amazon by way of audited reports so they know which marketplace sellers to pursue.
In contrast, Ebay does have the ability for sellers to add sales tax for bidders when they check out. However, it's optional. Ebay doesn't actually collect the sales tax money for sellers. In other words, Ebay is just providing a sales tax "calculator" rather than acting as a sales tax "collector". Paypal also doesn't collect and pay sales tax on behalf of sellers.
ikeboy|8 years ago
See https://www.ecommercechris.com/south-carolina-amazon-collect...,
https://www.ecommercechris.com/amazon-sales-tax-amnesty-need...
https://www.sellerlabs.com/blog/sales-tax-amnesty-what-do-i-...
colechristensen|8 years ago
jimbokun|8 years ago
meritt|8 years ago
* Do you impose tax in the state where the seller resides?
* Do you impose tax in the state where the buyer resides?
* Do you impose tax in the state where the item is warehoused?
mikeash|8 years ago
The only wrinkle is that #2 is not very well enforced when a company doesn't have a presence in the buyer's state, but it's still technically required.
JustSomeNobody|8 years ago
toomuchtodo|8 years ago
Buyers then prefer sellers who collect taxes for them. This forces Amazon and other marketplaces to collect the tax.
The law already requires this in aggregate (use tax from the buyer of sales tax wasn’t paid). Very similar to how you can only claim dependents if your provide their social security number. Great way to bring entities into tax payment compliance.
ghaff|8 years ago
https://www.law.cornell.edu/supct/html/91-0194.ZO.html
Amazon got pressured to collect in some states by those states considering Associates and other programs to constitute a nexus.
Note that in most (all?) states [that have a sales tax] the buyers supposedly have to pay sales/use taxes anyway. The debate is whether Amazon has to collect those taxes on behalf of the state.
unknown|8 years ago
[deleted]
TorKlingberg|8 years ago
ringaroundthetx|8 years ago
They are too weak to enforce their laws. Their decision making process comes down to enforcing its tax regime and possibly losing all the commerce when the big company just moves away - increasing their irrelevancy and underfunding - or not bringing it up at all.
Only a select few governments, national governments, and multinational governments are relevant enough to coax corporations into compliance.
And even then, they are just trying, as the entire framework of their government's existence can be successfully challenged by the corporation's lawyers.