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Author Topic: Boo Amazon!!!  (Read 8996 times)

Jim O

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Boo Amazon!!!
« on: September 03, 2013, 12:28:25 PM »
I hope this isn't in the wrong forum and apologize if it is.

Amazon caved to the state of Virginia and began collecting sales tax. Six percent on a Canon EOS 5D Mark III at $3499 is $209.94. I've always liked Amazon for their easy return/exchange policy and quick shipping, especially with Prime, but I will be buying much more from B&H and Adorama which, at this time, do not collect sales tax here in Virginia.

I know you Californians and others elsewhere having been dealing with this, but Amazon gave in when they built distribution facilities here in Virginia. Those are hardly a "sales presence". Walmart and Best Buy decry the lack of a "level playing field" but it's a different business model. No one can walk into an Amazon store near me and buy something on impulse at the spur of the moment. They can at Walmart and Best Buy. Wait till Amazon offers same day delivery, and they will, and they'll really be crying. In fact I am guessing that's why they agreed here. They will somehow get same day delivery on items that are warehoused in the Richmond area facility. They already deliver many items that are ordered over the weekend, supposedly two day Amazon Prime, to my residence on Monday. The do this by bringing them directly to UPS in Richmond on Sunday evening.

This is the current list from http://www.amazon.com/gp/help/customer/display.html?nodeId=468512:

Items sold by Amazon.com LLC, or its subsidiaries, and shipped to destinations in the following states are subject to tax:

Arizona
California
Georgia*
Kansas
Kentucky
New Jersey
New York
North Dakota
Pennsylvania
Texas
Virginia*
Washington

*Added on 9/1/2013

Amazon is suing New York and have hired Ted Olson, he of winning Bush v Gore and the more recent California same sex marriage suits fame, so he is no lightweight. If he wins in Federal Court I guess I can have big ticket items shipped to my brother in NY.

Indiana, Tennessee, Nevada, and South Carolina are coming, though SC is a ways off at 1/1/2016. I believe Connecticut is soon as well.
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Boo Amazon!!!
« on: September 03, 2013, 12:28:25 PM »

AcutancePhotography

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Re: Boo Amazon!!!
« Reply #1 on: September 03, 2013, 12:49:50 PM »
Unfortunately, Virginia Tax Code 58.1-612 defines a dealer as

2. Imports or causes to be imported into this Commonwealth tangible personal property from any state or foreign country, for sale at retail, for use, consumption, or distribution, or for storage to be used or consumed in this Commonwealth;

If (when) Marketplace Fairness Act of 2013 passes, companies with no presence will be collecting sales or use taxes.

The good news is that this tax is nothing new.  When filing Virginia state tax, you were always required to claim some forms of internet purchases under what Virginia called a Use Tax.  All this ruling does is collect this Use Tax at the time of purchase as opposed to waiting until the resident files and "forgets".

As a resident of Virginia, I have no problems with this.  This Use Tax money is going to pay for our infrastructure that makes Virginia a nice place to live.
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Ewinter

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Re: Boo Amazon!!!
« Reply #2 on: September 03, 2013, 12:54:46 PM »
Six percent? Is that all? Try paying 20% on purchases and 60% on fuel

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Re: Boo Amazon!!!
« Reply #3 on: September 03, 2013, 01:26:56 PM »
As a resident of Virginia, I have no problems with this.  This Use Tax money is going to pay for our infrastructure that makes Virginia a nice place to live.

The economic theory behind the sales tax is that it goes towards infrastructure, on this point you are correct.  However, a retailer having no physical presence does not use said infrastructure, hence the Supreme Court held that they do not have to collect sales taxes.
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Re: Boo Amazon!!!
« Reply #4 on: September 03, 2013, 01:27:16 PM »
I would imagine that the customer is supposed to file those sales taxes on the State forms.

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Re: Boo Amazon!!!
« Reply #5 on: September 03, 2013, 01:29:58 PM »
Yep, 20% VAT in the UK. As for fuel tax, don't go there
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unfocused

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Re: Boo Amazon!!!
« Reply #6 on: September 03, 2013, 01:38:59 PM »
As a resident of Virginia, I have no problems with this.  This Use Tax money is going to pay for our infrastructure that makes Virginia a nice place to live.

The economic theory behind the sales tax is that it goes towards infrastructure, on this point you are correct.  However, a retailer having no physical presence does not use said infrastructure, hence the Supreme Court held that they do not have to collect sales taxes.

Those products just arrive in your mailbox by magic? They don't travel over the highways or land at an airport? They don't get delivered by someone driving on your street?

And, it's not just for infrastructure. That sales tax pays for the fire trucks that come to your house if it catches on fire. It pays for the police officer who patrols your neighborhood so no one steals that new lens you bought.

If you are earning a living as a photographer, that means that you are paying more in taxes because companies like Amazon aren't collecting their fair share of taxes.

By the way, just because Amazon doesn't collect sales tax doesn't me you don't owe it. Amazon just refuses to collect the tax, so you are the one that owes the taxes and penalties if you get caught.
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Re: Boo Amazon!!!
« Reply #6 on: September 03, 2013, 01:38:59 PM »

Jim O

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Re: Boo Amazon!!!
« Reply #7 on: September 03, 2013, 01:45:44 PM »
Unfortunately, Virginia Tax Code 58.1-612 defines a dealer as

2. Imports or causes to be imported into this Commonwealth tangible personal property from any state or foreign country, for sale at retail, for use, consumption, or distribution, or for storage to be used or consumed in this Commonwealth;

This is subject to some interpretation. However, Amazon made the choice to locate near Richmond to service buyers in other states and now I have to pay sales tax.

If (when) Marketplace Fairness Act of 2013 passes, companies with no presence will be collecting sales or use taxes.

This is hypothetical and far from certain. I will deal with that as a vendor and a purchaser, when I need to deal with it.


The good news is that this tax is nothing new.  When filing Virginia state tax, you were always required to claim some forms of internet purchases under what Virginia called a Use Tax.  All this ruling does is collect this Use Tax at the time of purchase as opposed to waiting until the resident files and "forgets".

I'm not going to discuss what advice my tax professional gives me. Breaking the law? Perhaps. Driving over 80 MPH is an automatic Reckless Driving misdemeanor (at least!) in Virginia. Is it safe to assume you've never hit 81 MPH on an interstate? If you do it, do you report yourself to the police and ask to have your license suspended? Pot, kettle, black?


As a resident of Virginia, I have no problems with this.  This Use Tax money is going to pay for our infrastructure that makes Virginia a nice place to live.

You're entitled to your opinion.

I'm guessing that you don't live in Hampton Roads where we have needed a third James River crossing, a fourth tube across the Elizabeth River, widening of I-64 between I-564 and the HRBT (which itself needs to be widened) for years. But we're the poor stepchild (read "primarily black and 'blue'") and have repeatedly been told to do it ourselves. I have no problem with use based taxes such as tolls to fund road projects and so on, but sending my money to Richmond to make other places nice when we've been left begging here leaves me with a sour taste.

Considering how much money our region pours into the state's coffers between the port, the resorts, and the military, we get back very little.


Six percent? Is that all? Try paying 20% on purchases and 60% on fuel

I'm not here to debate different tax policies of different nations. What you get and what we get from our governments are apples and oranges. We pay sales tax to our states, and income taxes to our state and our federal government. We also pay property taxes and loads of "fees". We also have to buy our own healthcare which is itself almost 20% of GDP now.


As a resident of Virginia, I have no problems with this.  This Use Tax money is going to pay for our infrastructure that makes Virginia a nice place to live.

The economic theory behind the sales tax is that it goes towards infrastructure, on this point you are correct.  However, a retailer having no physical presence does not use said infrastructure, hence the Supreme Court held that they do not have to collect sales taxes.

Those products just arrive in your mailbox by magic? They don't travel over the highways or land at an airport? They don't get delivered by someone driving on your street?

And, it's not just for infrastructure. That sales tax pays for the fire trucks that come to your house if it catches on fire. It pays for the police officer who patrols your neighborhood so no one steals that new lens you bought.

If you are earning a living as a photographer, that means that you are paying more in taxes because companies like Amazon aren't collecting their fair share of taxes.

By the way, just because Amazon doesn't collect sales tax doesn't me you don't owe it. Amazon just refuses to collect the tax, so you are the one that owes the taxes and penalties if you get caught.

This is true but the trucks pay their own taxes and fees. Many vehicles traveling through Virginia on their way from Quebec to Florida never pay tax on anything here, but use the roads and have access to emergency services. That's a tradeoff.


Mods: I am sorry that I have stepped into something political. I'll not respond again as I have made my point. Feel free to lock or delete this thread.
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willhuff.net

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Re: Boo Amazon!!!
« Reply #8 on: September 03, 2013, 02:13:33 PM »
Are you booing Amazon for adding the distribution center in VA, or for following the law and collecting sales tax?
Many people got spoiled not paying sales tax once online shopping started, but it looks like the free ride will be over soon. Others have also pointed out that most states have "use tax" that you're supposed to report any purchases in which you didn't pay state sales tax.
« Last Edit: September 03, 2013, 02:16:36 PM by willhuff.net »

chops411

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Re: Boo Amazon!!!
« Reply #9 on: September 03, 2013, 02:14:51 PM »
TN starts 2014. But Amazon has added a lot of jobs in my area.
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gbchriste

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Re: Boo Amazon!!!
« Reply #10 on: September 03, 2013, 02:39:48 PM »
In Florida - and I suspect in most other if not all states - the sales tax is technically levied on the buyer, not the seller.  The state just forcibly enlists a retailer to act as its agent in collecting and remitting the tax as a condition of having a business license and the permission to conduct commerce in the state.  So in a normal retail transaction, the seller isn't tacking on the sales tax to your bill as a means of cost shifting something else from them to you. They are acting as an agent of the state in collecting the sales tax that you, the buyer, are legally required to pay.

That is why in Florida - and again I suspect in most of not all states - when a purchaser buys a product, any product from anywhere, and sales tax is not collected, that buyer is legally obligated to file paper work and remit the tax to the state.

Of course consumers get away without doing this all the time.  Other than conducting invasive fishing expeditions in to every private citizen's life and financial transactions to find suspicious purchases, there is no good way to do it.

Business entities?  That's another story all together.  The state knows exactly who you are and what business you are engaged in.  And they know which businesses are particularly infamous for buying high-dollar value equipment out of state from tax-free outlets like Amazon, and not reporting the sales.  Photographers are a favorite target.

I know at least 3 that have routinely been audited out of the blue.  On the first go around, they get a nice little letter from the state reminding them of the requirement, and inviting them to submit a detail list of all equipment on hand, where it was bought, the purchase price, tax paid at point of sale, or tax remitted to the state after the purchase.  There is also a "get of jail free" voucher with a one-time grace period to submit any back tax due without penalty or interest.

Second and third audits, are noticeable less friendly.

I can fully understand why an entity that does not have a physical presence in a state would not want to comply with state sales tax filing requirements.  I don't know about other states but in Florida, there is a state-wide base rate of 6%, and then each county can add additional taxes on top of that in what is called a local option sales tax for specific local needs and projects.  It's usually in the range of .5 to 1%  And sales taxes are all assessed and collected at the county, not state level of jurisdiction. So just in Florida alone, an out of state entity would actually have to maintain as mainy as 67 different tax tables that would have to be updated every time there is a county election that changes the local option rate, and would have to file quarterly returns with 67 different county tax offices.

Multiply that by the number of taxing authorities all of the U.S. that can set and collect local sales taxes, and the scope of the problem increases at an exponential rate.


jdramirez

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Re: Boo Amazon!!!
« Reply #11 on: September 03, 2013, 02:54:44 PM »
 I'm in pa and I find that if the price is close,  I'll buy from a third party seller because they still don't charge tax when this is the case.
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nonac

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Re: Boo Amazon!!!
« Reply #12 on: September 03, 2013, 05:14:20 PM »
The Internet and online sales took a lot of revenue away from the states. Add the economic downturn in there and states are looking for ways to get that revenue stream back.  Can't say that I blame them.  Who would have thought 25 years ago that states would lose so much in revenue through purchases made via the Internet.
« Last Edit: September 03, 2013, 06:13:58 PM by nonac »
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Re: Boo Amazon!!!
« Reply #12 on: September 03, 2013, 05:14:20 PM »

jcollett

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Re: Boo Amazon!!!
« Reply #13 on: September 03, 2013, 05:15:55 PM »
Now you are supposed to pay your sales tax when filing your annual tax return.  That being said, one way to prevent paying the tax at time of purchase is to look for items that are being sold on Amazon but by another vendor.  The best ones are those that are shipped by Amazon but are technically sold by someone else.  Here is an example, http://www.amazon.com/Tiffen-43CP-Circular-Polarizing-Filter/dp/B00009KLAG/ref=sr_1_1?s=electronics&ie=UTF8&qid=1378242985&sr=1-1&keywords=Tiffen+43CP+43CP+43mm+Circular+Polarizing+Filter+%28Gray%29.  Note the "Sold by aSavings and Fulfilled by Amazon."  This would not be charged sales tax at point of sale (unless aSavings has a presence in your state). However, if the item says "Ships from and sold by Amazon.com", that item will be charged tax at POS.

Hope this helps.
« Last Edit: September 03, 2013, 05:17:53 PM by jcollett »

sagittariansrock

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Re: Boo Amazon!!!
« Reply #14 on: September 03, 2013, 05:35:25 PM »
Sales tax, while difficult to digest, makes sense:
It brings the local stores to a level field of play.
And it pays for a lot of things we enjoy.
And it avoids the relying on customers honestly paying the 'use tax' (which, if you had paid all this while, you wouldn't even complain about this sales tax being levied).
I hate it as much as the next person, but I support it all the same.  ::)
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Re: Boo Amazon!!!
« Reply #14 on: September 03, 2013, 05:35:25 PM »