Amazon.com cuts California sales tax deal in stunning turnabout

I am really disappointed to hear this news, actually. I would rather Amazon have fought the state's clear attempt to unconstitutionally tax interstate commerce and gotten clear precedent that forcing companies without a physical presence in a state to collect sales tax there is bullshit.<p>It's the same reason why I do not believe in 'use tax'. It is a tax which exists solely to tax interstate commerce (which is exclusively the domain of the Federal government) that I am stunned nobody has attempted to fight yet.<p>The argument that "Amazon gets an unfair advantage abloobloo" is garbage -- Amazon has to pay a local company to ultimately get the items to you, which absolutely does pay local tax - UPS has to buy gas in California, pay employees in California (and pay the associated exorbitant California payroll tax), pay for inspections, facilities, etc... The state is collecting their pound of flesh out of the transaction in one way or another.<p>(Not to mention the complexities of the tax code that aren't even consistent on a ZIP code basis - it's the last weekend of August, you're shipping to an address covered by the HRT district in Virginia Beach, VA, and you're selling a $105 bikini. For $500, what's the tax rate? Hint: all of those factors (date, exact location down to the house number, price, item type) play into how much the tax rate is. It is not a naive lookup table of "zip code: tax rate".)

I'm unsure of what Amazon's long term plan is. Is it their hope that Congress deals with this on a national level and makes it workable? They just don't want to deal with the mess on a state by state basis?

&#62; While Democrats and Gov. Jerry Brown fretted that they would lose $200 million a year in sales taxes<p>California residents are supposed to pay use tax on internet purchases regardless of the physical presence of the retailer, right?<p>Running the math: the $200 million/year loss that they claim is an estimate on tax fraud on just Amazon purchases? At a 7.25% tax rate, that's a tax on $2.7 billion in sales, and Amazon's US sales last year were 18.7 billion [1]. They're estimating that unreported purchases in California comprise 14% of Amazon's revenue in the US.<p>California comprises about 12% of the US population. The assumption is invalid, because 14% is greater than 12% - but, assuming it's reasonably close, we can still say that either (1) the politicians are ignoring the use tax or (2) there is a massive amount of fraud going on in use tax reporting.<p>[1] <a href="http://www.internetretailer.com/2011/01/27/amazon-sales-and-profits-boom-2010" rel="nofollow">http://www.internetretailer.com/2011/01/27/amazon-sales-and-...</a>

So does this mean Amazon is going to allow CA affiliates again?

There is a very important aspect of this whole mess that is left out:<p>The legislation, which affects affiliates, would be repealed under the deal as it stood this morning. At this time I don't know if that stuck.

For some reason I cannot see the article linked.<p>Using this instead <a href="http://news.google.com/news/story?ncl=dZ6jw2rLSA2UmxMxmSxu9FWhtEgWM" rel="nofollow">http://news.google.com/news/story?ncl=dZ6jw2rLSA2UmxMxmSxu9F...</a><p>I guess this is the critical line:<p><pre><code> If Amazon cannot get a change in federal tax policy by next June it will start collecting the tax in September 2012. </code></pre> So I guess the door is now open and every state will go after amazon for sales tax.

Very good! I can start shopping Amazon again with a clear conscience.<p>I say this not as sarcasm but as literal truth. I know many HN'ers disagree that they were doing anything wrong -- but personally, their behavior turned my stomach and I was avoiding buying anything from them which I could easily get elsewhere.

Just FYI: in Europe, Amazon collects VAT at the buyers' local rate. For example, when shipping books from the UK (which has zero VAT on books), the bill includes VAT at the destination country's rate.

While most like the trumpet the enumerated protections of the Constitution that the US enjoys, this is (IMHO) an example of where the wording and the intent of the Constitution is outdated.<p>Most developed nations have some for of consumption/sales tax. In the EU it's typically 17.5-25%, in Australia it's 10%, in Switzerland it's ~7% and so on. America has this on a state by state basis.<p>Nowadays the split jurisdiction with interstate commerce is now awkward and unwieldy. I believe that in the coming years the Federal government will act to enforce an interstate sales tax and maybe even a tax on imports. The path of least resistance here is for the sales tax due to be the sales tax that applies in the state of the recipient.<p>I'm not sure how much revenue that would raise but my guess is <i>a lot</i>.<p>As for Amazon, I'm not sure what they're thinking. In a year they'll have the same problem. One would think they're confident of Federal action in the next year on online sales taxes or they think the climate will have changed in a year. I'm not convinced of either. Are they that desperate that a year's delay is a win for them?<p>While we're at it, what's up with New York? Amazon collects sales tax for the state of New York while it (thus far unsuccessfully) has tried to challenge the "Amazon tax" in the courts. Is New York a test case? Are the affiliates in New York that much more valuable?