The New York legislature has approved an ingenious new law that would force Amazon and other big-name online retailers to collect sales tax on all goods shipped to the Empire State. Last week, the State Legislature approved a $122bn budget, and $50m of that would come from e-tailers who don't maintain New York warehouses or …
.... how about you give us some of that internet money....
Sales tax rates...
When NY State implements this mess (they will at least TRY to). The people of NY State will have lots of time to think up other ways to capture the goose that lays the golden eggs.
In California, I've seen the tax rate (Sales tax) go from 4% in the early 60's up to its present 8.25%. This is money that goes DIRECTLY to our wonderful government run by the Governator. The big problem is that while the rate has DOUBLED (remember this is the RATE), we don't get twice the government out of it. In fact we probably don't get much more than what the 4% bought us.
So, any way of getting out of paying sales taxes is welcome to many of us. Thankfully I've got relatives in (sales tax free) Oregon who can help out with those "big ticket" items.
For those of you wanting to know: Sales tax was originally supposed to be a replacement for property taxes on the same item. They thought of a rate and figures on how long you would keep it. It was supposed to be an easy replacement. Now our governments (there are lots here in the USA) wants a "piece of the action". Always your "partner" even if you don't want it. (*SIGH*)
Why California? I was down in Carmel (Clint's (make my day) hangout) this weekend and it was a nice 80 degrees, and the beach was wonderful. The weekend before, I was skiing at Lake Tahoe. Enough said!
If the former New York governor can afford $1000 an hour hookers do they really need to gather more taxes or just reduce the salaries of city employees.
The question is :
How much tax was paid on the 1000 $ an hour...
paying 17.5% on everything by default as well as £1.07 for a litre of bog standard unleaded.....
Greedy government shooting its self in the foot (nothing unusual)
Surely there's a simple solution... exclude NY businesses from your affiliates scheme?
It sounds to me like this might prove harsh for local businesses but I can't see why anyone else need be affected.
Taxes and government salaries
Eliot Spitzer and many other US government officials had incomes way beyond their official salaries. A NY Govenor is paid $179,000 (http://www.stateline.org/live/details/story?contentId=207914)
Hillary made about $10 mill & Barak made a couple millions on their books as an example. (and fwiw, the Clintons have donated 9.5% of their combined income to charity and the Obama's only 1%.)
The US president is only paid $400,000 in salary (plus benefits/perks).
A US senator is only paid $169,000-$183,000 (plus benefits/perks)
A US congressional representative $165,200-$183,000 (plus benefits/perks)
For the poorer senators and congressional representatives, it is nearly impossible to live in both their home states support their families and live in Washington dc at the same time. Many share homes and apartments with other senators and representatives, on the other hand more than 40 senators are millionaires.
What Jay said.
Items in the UK cost more than the same thing in the USA, have more tax, and fuel is an abomination!
everyone wants services...
like roads (and bridges that don't collapse from neglect) and schools (and teachers and textbooks) and parklands and police and fire protection, etc. ad infinitum but nobody wants to pay the taxes which pay for these things; they seem to think that the state can just produce them out of thin air, I guess.
People Willing to Pay for Value
I think the problem people have with it is that private industry salaries have stagnated while public service employees are pretty much guaranteed 4 % a year. For example, here on Long Island a married teacher and policeman here can clear $250k a year ... the median income BTW is about $45k. Many retire with pensions that have a higher take home pay than when they were working full time. That an all the "patronage" jobs, funny expense account charges and all have people fed up....which is unfortunate for the many hardworking public service employees that don't have strong unions and spaghetti spined politicians.
I think the biggest beneficiary of this will be "Mailboxes 'R Us" of New Jersey as peeps ship to a NJ PO Box and have their stuff forwarded.
Location, location, location
I am curious if the law will apply to an affiliate who lives in NY or if it will only apply if the affiliate's website is housed on a server in NY. If the affiliate is a Nevada or Delaware registered business using a Texas based server then is the business located in NY just because the owner of the business resides in NY? I can't see how this is going to be policed. The obvious thing for Amazon to do is declare that as of a given date they will no longer do business with affiliates with mailing addresses in NY. Then it is up to the affiliates to use a mail drop and bank deposit in Nevada or another commerce friendly state and access their fund through the automated banking system.
Not to miss the point of the article, but has anyone read the call-girl article linked?
If i knew you could get money from the New York Times for copying out what's on someone's MySpace profile i'd have become a journalist years ago...
thomas k., while money for government services does not come out of thin air, I can see where it might get just a little annoying when you live in a state like New York, which is pretty well-known for finding ever more ways of milking its citizens in possibly every aspect of their lives, and the services they provide with it are mediocre at best. And that is if they ever manage to get that bloated budget passed on time.
Taxes are suppose to be paid in the state were the transaction took places. This has been interpreted as were the product is coming from and were ever the company has a physical presence at.
Two things can happen. Other sates could sue NY or they could refuse to abide by court rulings that has to due with money judgments. Oops you want us to collect child support for you ?? Toss off.
@John W. Naylor, Jr., P.E.
Hey whats a junior PE? :-)
US jobs are going overseas. No manufacturing base. IT getting outsourced/offshored... So where's the money going to come from?
Since less people are smoking these days, you lose on the cig tax.
Can't tax more out of hotel rooms or entertainment fees.
So the revenue stream has got to come from somewhere.
Now be honest. How many of you have kicked a product's tires in person, only to buy the product from an out of state internet provider who doesn't have the expense of a showroom? In fact, they may not even have their own warehouse and just be a web front that then does the shipping directly from their distributor or manufacturer? Be honest.
Sorry mate. We've seen this coming a long time ago. Now's there's enough financial pressure on the govt to actually start this...
Its not a bad thing really. Just the cost of doing business. (Something that has been ignored...)
BTW, the cost of implementing the capture and payment for tracking state sales tax isn't that difficult. Heck each state could supply the data on their website or supply a service to provide the data to merchants....
Just expect Amazon to no longer offer free shipping to compensate for the tax...
Maybe the US could move into the 20th century
and introduce some form of uniform VAT with a minimal rate, like the EU nations (which are independent states) do.
Guess that wouldn't stop Amazon transitting all their stuff through the Bahamas or someplace (as they do with Jersey for the EU).
It seems more likely that Amazon will ban affiliates who are located in New York state than that they will start to charge sales tax to New York customers, so the state won't actually make any money but will destroy the businesses of a number of its residents.
This is a dodge really
If I buy something mail-order from another state other then there is not sales tax. If I buy from someone in the same state then sales tax is applicable. Why should internet sales be treated any differently? Further, since inter-state trade is under the jurisdiction of the federal courts(and the Supreme Court), why is a state authority even allowed to assert this?
Should try Europe.........
In the UK, we pay 17.5% sales tax (VAT). Have to pay similar sales tax on anything we buy from elsewhere in Europe, and pay same sales tax + import duty + handling charge on anything we purchase from the US.
Even software downloads from the US have European VAT (of at least 17.5% )added to them.
So whilst I can understand the frustration of NY residents at having to pay a tax they didn't have to up until now, I do think they ought to know how things are the other side of 'The Pond'.
@ Herby - Sales Tax Rates
Herby wrote: In California, I've seen the tax rate (Sales tax) go from 4% in the early 60's up to its present 8.25%. This is money that goes DIRECTLY to our wonderful government run by the Governator. The big problem is that while the rate has DOUBLED (remember this is the RATE), we don't get twice the government out of it. In fact we probably don't get much more than what the 4% bought us.
The problem is that we ARE getting twice the government we had in the 60's... it's just less than half as efficient. Half as efficient, except when it comes to dreaming up ways to separate Californians from their money. In that, their efficiency has gone up logarithmically. The temptation to leave California is getting stronger all the time... Grandchildren in another state will do that to you though...
Coat please... the one with the built in heater for winters in Ohio.
Late Night Larry
No Taxation without representation!
what ever happened to you guys ?
Worse in EU
If you buy stuff from Amazon in the EU, they charge you the VAT rate of the country it is shipped too, not where you bought it.
So I find it difficult to shed a tear for our US cousins bitching about their 4%.
Paris, I bet she pays very little in the way of taxes.
@Taxes and government salaries
It isn't the elected politicians, or even the civil servants salaries that you should complain about, it's the high priced people who are brought in to run bits of government, who have to be better because they come from industry, consultancy or acedimia and need to be offered competitive salaries and bonuses to attract the brightest and the best.
Then there's outsourcing services to the private sector that means they make a profit on something government didn't.
And finally there's those good old consultants from Kindsey, PWC and others who cost lots and deliver nothing because they are graduates charged at $2000 a day and know nothing about real life but tell your government how it should work.
That's where the tax $ £ F Y or anything else in the western world really goes.
No right to complain
To be honest, I never realised you were meant to report these purchases. I always thought if the company was based in a different state, you didn't need to pay the sales tax.
In any event, if NYC consumers are obligated to report these purchases when filing their state tax return, but they're not doing it, then they have to right to complain about the government legislating a way to enforce collection.
@Worse in EU
"If you buy stuff from Amazon in the EU, they charge you the VAT rate of the country it is shipped too, not where you bought it."
If a company has a trading presence in the destination country then it charges at the rate of VAT for that country, else it charges at the rate in the supplying country.
This means that someone in France ordering a book from Amazon UK will pay 5.5% VAT (French rate for books) instead of 0% (UK rate), because Amazon.fr exists. If that person were to order from, say, Maplin Electronics, which does not operate in France, they would be charged at UK VAT rate (17.5% for electronics) instead of the French 19.6%.
There are similarities with the NY situation. A few years ago such retailers were not required to charge VAT if they shipped abroad, and it was the duty of the recipient to declare the purchase and pay local taxes. No-one did, of course, hence the change to require the supplier to collect at either source or destination rates, so the VAT is always paid.
The UK doesn't pay VAT on items shipped from Jersey, hence the reason why Play.com and some Amazon goods are shipped from there.
It sounds like the tax calculations for quite a few websites will need to be rewritten as a result of the NYC law change.
so you poor folks in the US:
how much do you pay for your gas-o-line (or how much does the government take in VAT and duty)?
have you compared prices for bloody ADOBE PRODUCTS from the UK and US!!! now that is a scandal!
Looking at the wrong target
If New York feels that it's not getting properly due payments from individuals who do not pay proper taxes on items they import from out-of-state, then the state of New York needs to be more diligent in auditing those taxpayers, looking at their financial records, etc.
Going after Amazon by claiming independent "affiliate partners" located in the state is the same as a physical location (even though the affiliate partner handles no merchandise or other physical property, and isn't even recognized as a representative of Amazon), is completely wrong. If Amazon doesn't sue over this, then I can see them making the proclaimation that they cannot have affiliate relationships with individuals in New York state, and those affiliates will quickly setup a PMB in New Jersey to get around that.
This will be a clear case of "penny-wise and pound-foolish".
Actually, it's a complicated little setup based on turnover (sales) and whether or not you can produce a VAT registration number. Companies don't pay VAT on intracommunity purchases, although there's the administrative headache of having to declare the bloody thing in detail anyway. This latter is designed to create extra for for already overworked, overstressed, and underpaid accountants. They're the nice ladies who make sure the boss signs your paycheck on time.
Yer ordinary Joe will pay a rate of VAT depending on how much Amazon, Maplin, or Ye Olde Frilly Knicker Shoppe actually sell to his or her country.
The party had to end some time
To be honest, the "tax free" nature of e-commerce in the US is a bit of an anomaly; it probably helped stimulate the growth of e-commerce, but the point has long been passed where online transactions have become a significant proportion of all retail in the US. It was either going to be a state or a federal move to make online pay its way. A federal move would have been simpler from a technical point of view, but American sensitivities are such that the state route makes sense. If NY can make this stick, other states will follow pretty quickly. Of course states like Delaware (no sales tax as I recall) will see a thriving PO Box/Tranship sector develop, if only for high ticket items.
But i'd rather pay twice the price for our petrol/gas and be able to drive a decent car than any of the fuel guzzling barges i've had the misfortune to use when in the US!
Paris coz she's a guzzler too...
Oh no a couple of % tax...
Come on whingers, this is a couple of %. Try 17.5% on top of already artificially inflated prices (compare the iPhone price from US to UK to name one).
What is presumably happening now is that a company (who could be in NY) is selling to a user in NY, and avoiding taxes by selling it 'via' amazon? (Or do they have checks in place to stop that?)
So now, the government are getting their own back.
Ultimately the law needs to change to have 'import' taxes per state OR country wide 'roughly equal' tax. Otherwise there will always be tax winners and loosers.
I'm not your guy, buddy!
@ max allan
"But i'd rather pay twice the price for our petrol/gas and be able to drive a decent car than any of the fuel guzzling barges i've had the misfortune to use when in the US!"
Last time I was in the USA, I hired a car from Budget, sooner than the crappy one Virgin were offering free, (which I in fact got a 20 quid reduction in my flight because I declined it) The total cost of hiring it, including a free tank of ‘gas’ with the platinum insurance, no excess, no nothing to pay, even if I just returned the steering wheel was still cheaper than the insurance for the so called “free” car from virgin. And it was also cheaper to hire it from the USA site, than the UK site
The car was a brand new Mitsubishi Gallant, fully equipped with everything... in the three weeks I was there; I travelled over 1200 miles, and had to fill the tank once. And put a little bit more in to get me back to the airport. It cost me 35 USD to fill the tank, and an extra 10 USD to get me back to the airport. So in total $80 USD.... near enough £40 quid.... back hope, I had to fill my Vectra up, that cost me near enough £50... And I get about 300 to 370 miles from that.... gas guzzler, I don’t think so....
I was so impressed with the car I fancied buying one, so I did a little of research..... To buy the exact same model of car, Inc all taxes and on the road in Florida would cost me a little over $20,000
Why was I not surprised that I couldn’t buy the same model car back home in England... the closest spec car to it was a £30,000 BMW..
Oh, and while I was there, it got a flat...... it cost me $5 to get it fixed at the local tyre shop.... compared to the £15+vat you have to pay here so when I told the guy to keep the change from a $10 note, he was so happy....
My conclusion is this.... in the USA, they are sick of getting shafted with poor wages, high taxes etc... But because we have to bend over and take it balls deep and no lube from Mr Brown, with a smile... it is a bit of a relief to have to pay the penance that our colonial cousins have to endure.
mine is the Kimono style one !!!
We pay the fair market rate for our gasoline.
As a matter of fact, a lot of our gasoline come from European refineries. The reason is that European refineries use fractional distillation which produces 40% gasoline and most of the rest diesel. US refineries use catalytic chemical refining which produces a higher gasoline fraction. But Europe does not use that much gas in comparison to diesel. The US uses relatively little diesel in comparison to gasoline. So a lot of gasoline made in Europe gets shipped to the US, and a lot of diesel made in the US gets shipped to Europe.
He's not your buddy, fwiend!
Of course are cheaper over there, we all know that.... however i struggle to see how the cheapest equivalent car over was a £30k BMW, surely a Mitsubishi Galant would be the closest car available to a Mitsubishi Galant? Granted it won't be $20,000 though....
Chewy said that UK does not pay VAT on stuff from Jersey. This only applies on goods worth less than £18, so not very useful really...
He's not your Fwiend guy!
The Mitsubishi Galant is a US-made car, not on sale in Europe.
As always it is important to compare more than just name versus price. I've rented mid-range cars, i.e. Fords in the US, and they do not compare to their similarly-named EU models, being much more cheaply finished with hard plastics and far less in the way of equipment. Often the same name is used for a totally different car, OEMed from a totally different manufacturer!
He's not your guy, budday.
For the people living in the USA, if you buy something in your home state you pay a sales tax. If you buy something from another state (or country) you pay a use tax. It is actually a little bit more complicated than this. But, this is the quick and easy explanation.
Corrupt politician in corrupt NY goverment introduces scam taxes, new?
NY has not been so corrupt since Tweed and does anyone believe our new shill governor is any less guilty?
All of those hotel rooms he was using on NY tax dollars must have been pretty lonely and it is common knowledge that he likes the ladies.
You know it's not his looks so what is it the ladies find so attractive about the spare governor.
...moving to Norway where VAT is 25% for most things and over 100% for new cars.
I used to complain about how bad prices were when I lived in the UK, but believe me, you don't have the worst of it.
Since some of you seem to have missed the point of our spat 200 years ago
We Americans put a great deal of emphasis on not owing ANYTHING to the government. The government owes US a system that "provides for common defense, promotes the general welfare, and establishes the blessings of liberty." And another one of those key points in case you've forgotten the whole point of our tea time up in Boston, was that you can't pass laws on people who aren't represented in the government. Now what that means is that if you are living in say Utah, the governor of New York, regardless of how many billions he's bilked from Wall Street before he got caught with his, what's the word you bloke's use, oh yeah, got caught with his knickers down AND in a bunch, is not legally allowed to impose laws on you in Utah. This is the essence of the original mail order decision, and it isn't a question about how easy or not it is for you to collect the tax. A physical presence implies you are represented in New York and are therefore legally beholden to its laws.
Flames because apparently its time to water the liberty tree again.
End of e-Commerce??
About the only advantage to buying online is that there is no sales tax... By the time you pay shipping and then add sales tax you can just go to the store and purchase the item yourself. Even Congress recognizes this and is the primary reason why they keep extending the Internet Tax moratorium.
I like shopping at the local stores so I for one am all for the death of e-commerce.
Sure, we here in the States complain about taxes. We Separatists left and founded a place with low taxes, had a tea party to spoil the plans of the good King to continue collecting taxes from us, and generally don't appreciate others helping themselves to the contents of our wallets.
So to hear some say "Well, I don't feel bad for the Yanks, because look at how much we pay HERE in the EU"... That's like telling someone who just had their eye poked out "Well, you've still got another eye, and look, you're better off than that bloke who lost both legs in that gas explosion!" I'm not going to be happy just because I've lost LESS than someone else. I want to avoid the LOSS altogether - and I want the OTHER GUY to avoid the loss as well!
We Separatists wouldn't mind taxes going up if there was some indication that some gain or improvements were being made because of the increase. But that doesn't happen. Now, Liberal New York is like Liberal California in that the people there seem to like voting themselves tax increases, and keep electing people that like to increase taxes spontaneously without votes, so THAT is why I don't feel sorry for what's happening in NY.
The tax is wrong, governments need to find a way to tighten belts list like those whom they claim to serve. NY and CA govts seem to feel they are entitled to OPM (other people's money) at will, and the people continue to permit the behavior. But each state is entitled to do so. My state of Georgia does NOT follow this "Tax Em Good" model, so I live in relative happiness. So don't feel sorry for NY. But DO hope that Amazon makes a sensible decision and either boldly, brazenly, and with much fanfare passes on the tax to NY netizens or discontinues business in NY. yeah! Like that's gonna happen!
Taxes after 232 years
The biggest problem with any tax increase is they almost never go away. Governments will continuously add new and increasing taxes.
To all of you bitching that the taxes in the EU is so much hire than here in the states, it's because you let your governments grow that big.
Communism is the failure of Socialism. Socialism is the failure of capitalism. How close is your country? When you pay almost all your income back in taxes your living in a socialism society. Look who's deciding how you spend your money!
Don't give me the national heath care crap either. Even illegal aliens get treated here. I choose to buy my own health care insurance and get to chose the level of care I want. My whole family is insured for $500 per month and not through an employer. We receive very good health care. If the government takes over, I'm sure my rate will be in the thousands and the quality will go down.
Tom is absolutely right. Read your history and understand why our constitution was written the way it was!
you left, let the English(and Canadians) fight a war to keep you from being French, made alot of money selling the English guns, then when the English came and said yeah we'd like some cash for this pretty expensive war. You all went "nah..." so the English claimed tax on the wealthy folk who made a fortune selling guns.
These rich folk as rich folk tend to didn't want to pay taxes and so got the masses to rebel.
To add insult to injury you enlisted the aid of the damn french.
Land of the free and the brave indeed.
Surely the reason you pay so much tax in Europe is because you joined an organization with a bureaucracy designed by the French. VAT is the XML of the financial world, a scheme of staggering waste and inefficiency that keeps billions of Euros uselessly circulating through the banking system without actually benefiting anyone at all, because apart from the unfortunate end user, everyone in the line gets their money back. If you switched back to a simple sales tax on the US model, there would be more contributors - a business can't claim back its sales tax on office supplies, as they do with VAT - and the rate could drop back to a more modest 10% or so.