Amazon has had a distribution center in Coffeeville, Kansas for a number of years so we have had been paying sales tax here for a while. With Amazon's intent to add more distribution centers the internet sales tax question may become semi-mute for them due to the larger physical footprint in more states.
Considering Florida does not have an income tax, this is not as big a problem as here in New York State where we have the highest state income tax, local sales taxes at 8.625% and property taxes on a $360K home in the $12K range (and climbing). Of course in our case, we are paying more and getting less as the money is all going to ever higher pension obligations and higher salaries for fewer employees. If allowed to continue, I suspect you will have 100,000+ retirees in my county being paid what they were when they worked (and getting free medical) and one full-time employee earning $156 million. All I know is the current years taxes will always look like a bargain the following year.
I very much doubt this will affect their sales to Florida. The savings using Amazon is still cheaper in most cases.
Government has no incentive to spend or save money wisely. When they spend to much they just raise taxes or put in a few more seed or RLC cameras.
Sadly, now with individuals and corporations allowed to spend whatever they want things will continue to get worse. Glad I won't be around for the straw that breaks the camels back.
Yes, it is still cheaper to buy form Amazon most of the time even with the sales tax.
The People's Republic of Maryland is not far behind.
Amazon started collecting sales tax in Wisconsin a few months back. They announced they were going to open a distribution center in Kenosha and shortly after that they started collecting sales tax even though I don't think it's operational yet.
in many case, Amazon still offers the lowest prices regardless of sales tax, at least for less expensive items.
The reality is that people are already supposed to pay the "use tax" on those purchases, so the real change is that the burden of collection and reporting is onto an entity that the gov can audit more easily ... not only are they wasteful, it looks like they're lazy too!
..if they have a physical office in the state, then they must collect taxes for that state.
There goes my additional advantage.
The reality is that people are already supposed to pay the "use tax" on those purchases
While I think that is the law pretty much everywhere that has a sales tax, the practicalities vary. My daughter reported that the Ohio income tax return had a line for this right on the main form. Checking while writing this post, I find that for Tax Year 2013 form IT 1040, it was line 19 "Unpaid Ohio use tax".
By contrast, here in New Mexico I failed to find any information on how to file use tax for an individual (as distinct from a business) during nearly an hour of searching about their web sites, tax instructions, and various independent resources. I gave up. I imagine the fraction of New Mexicans who actually pay their use tax due on internet purchases is vanishingly small.
when filing income tax returns this year, there was a question on Turbo Tax about any purchases thru the internet (amazon and ebay were examples) where my state sales tax was not paid.
I answered "No".
My presumption was there would be use tax added to my state income tax (or subtracted from any refund) had I answered "Yes".
I assume this also applies to other states. In California, sales tax is not collected by Amazon for third party sellers.
This too will pass
Please dont come to Wisconsin with your taxes, we have enough!
So, do you Illinois residents keep track of online purchases and answer "Yes" on the 1040IL? I figure if the gov't wants it, let them keep track of the purchases.
Your probably right. Living in Florida it still sucks.
I'll continue giving them my business as long as the price is right, many other sites on the net with free sipment that don't charge state tax.
Most of my RC toys I now get directly from China, no Tax and no shipping just got to live with the wait, I’ve gotten shipments in little as a week and others as long as a 5 weeks.
Amazon started collection sales tax in Georgia about 3-4 months ago. I still buy lots from Amazon but Amazon doesn't necessarily have a better price anymore.
I moved from Illinois (no Amazon tax) to Georgia (Amazon tax).
I still buy lots from Amazon but Amazon doesn't necessarily have the best price anymore.
If you haven't already check Newegg's prices when you are looking for something. I just bought a router and it came a penny short of free shipping on Amazon. I bought the same router from Newegg for the same price with no sales tax and three day shipping for 99 cents. The five to seven day shipping would have been free.
they've been collecting in PA for a while now too.
They are in the process of building a distribution center in Baltimore, so as soon as it's open for business, we have to start paying sales Tax for Amazon purchases in Maryland.
Don’t know if it is true, but I heard that Amazon was opposed to paying state sales tax but could not get support from other big retailers. Companies like Best Buy thought if Amazon had to pay tax, they would have a better competitive position. Amazon’s response is to build distribution centers “everywhere”. If Amazon can deliver “tomorrow”, why bother driving to Best Buy today. Sounds like Amazon will still come out on top.
I've been playing tax recently for purchases on Amazon in Virginia too.
The same thing happens to me when I buy and ship from Costco, but to get around it, I have it shipped to me at my mothers address which Costco does not charge a tax because there are no Costco's in her state, then I have her ship it to me.
I have been Amazon client for years and like the free shipping service they offer and no taxes. If this change I will start buying from different website.
Because the TX government sued Amazon, and Amazon settled by agreeing to "voluntarily" collect taxes. The actual "legality" of all this is still debatable, since Amazon has no physical presence here. Some lawyers are arguing this should be Congress' turf (interstate commerce); some argue different theories. I hate tax, so I tend to doze off during the debates among my colleagues.
I am surprised that it lasted as long as it did. I live in Iowa and I can't believe the brick and morter people have been as quiet as they have been.
Does your mom have to pay money to ship packages to you? The tax on most items, unless very expensive is a lot less than it would take to ship it.
There are Amazon fulfillment centers in Coppell, Haslet and Schertz Texas.
I guess ...
Thanks for the clarification. But I do know about the TX lawsuit and settlement, which led to Amazon collecting taxes initially.
The next battle for local taxes will be for the sale of digital purchases such as Android and IOS apps, e-books, music and video downloads. Many state tax laws have yet to catch up with the latest technology.
I ordered from amazon for over a decade, but no longer do. Their prices are often not the lowest (I hate to do advertising for others but let's take a Sony Camcorder we bought last Oct.--paid $30 cheaper than amazon no tax/free shipping authorized eTailer, and then there was a price drop of another $40 Black Friday. Called and got a $40 credit to my credit card. So, net, $70 cheaper than amazon. I'm sure amazon would say this is a special case because they have an algorithm for them to hover at x above the competition.
Their free prime never made any sense--we "tried" it 3X and were able to get many small items UPS 2nd day.
But the real kicker is that they are farming out their distribution to 3rd parties, so they can no longer keep everything in house. The drones and all that sound good, as do the real $1 mil. robots that they have in service.
Collecting tax in all 50 states is the right thing to do. I didn't like it when mine was next, and then where I work (was having stuff shipped there) was next after that. Now I am ok with the taxes as I don't use them anymore.
For me, paying the tax is better than going to the mall.
If Amazon can deliver “tomorrow”, why bother driving to Best Buy today. Sounds like Amazon will still come out on top.
I'd still prefer to wait and get it cheaper, although I might change my mind if I could get my order in 30 minutes or less delivered by UAV:
Before Amazon I remember going all over town to find what I was looking for. That is enough to wait a week or more for a delivery. Although, I find Amazon usually gets it to me earlier than that.
They can move their distribution centers closer to the target markets and cut their delivery costs.
They used to ship to California from Nevada, now they have two fulfillment centers in CA. We pick up the tax and Amazon saves on distribution costs (i.e. more profits). Amazon loves this arrangement.
I still prefer to see what I'm buying in store. After all I may buy it form Internet, but at least I know what I'm buying. Because if you buying from picture it may be not cheaper after all. Many of my friends are buying stuff from web, then once it arrives they are disappointed and are sending it back. And there is no free shipping if you are sending item back.
I see, that Internet buyers are often new "discount coupons" types. Remember those people with stack of "10 cents off" coupons in hand, driving 50 miles to get this 10 cents less than their local store? Now many people are not counting return shipping as cost of transaction and often spend more sending items back and forth than they would spend going to retailer.
I've never had a problem with Amazon and returning something I didn't want once I had it in my hand. Fill out a return form, print out the free return label, account credited in full once they got it back, no questions asked. Maybe they don't do that anymore? I don't know, I haven't had to return something in quite a while.
By the way, a great place for those "10 cent" coupons is retailmenot.com, I have found a lot of internet stores have coupons listed on that site.
Some retailers will match Amazon etc prices for items that Amazon has in stock. It's worth a try. What all the retailers keep whining about is the tax disparity, but when Amazon has prices that are significantly lower than at the local level, even if I were to pay taxes the price would still be lower. Why should I waste my time driving around to pay more when Amazon will deliver it to my door for less money?
My daughter reported that the Ohio income tax return had a line for this right on the main form. Checking while writing this post, I find that for Tax Year 2013 form IT 1040, it was line 19 "Unpaid Ohio use tax".
New York State was the first, I believe, to add that line to income tax forms starting about 10 years ago. It was supposed to be a temporary line item but has become a permanent fixture.
In New York, you MUST enter something on that line. You must not leave it blank otherwise your form will be rejected or subject to audit. Your choices boil down to "0", the actual value based upon the tax rate on all your out-of-state purchases or a value calculated from your income. For example, a person with a taxable income of around $45K can use the calculated value and pay $35 as their use tax. For my county, that would equal around $406 in online purchases.
It has been reported that most people put "0".
Not New York. All of my iTunes purchases are taxed. Oddly enough, I bought a blood pressure instrument at Walmart the other day and it was not taxed. Medical equipment, drugs, etc. are NOT taxable in New York. Go figure...
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