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July 9, 2011

Amazon versus California
Posted by Jim Macdonald at 09:54 AM * 156 comments

Old news, from June the 29th, but I hadn’t heard it. From the Los Angeles Times:

Amazon.com dropped about 10,000 California-based associate sales partners late Wednesday so that it would not be forced to collect California state sales tax on purchases made through them. The tax is new and was signed by Gov. Jerry Brown on Wednesday as part of a plan to close a gap in the 2011-12 budget.

As passed, the law requires large out-of-state retailers to collect sales taxes on purchases that California customers make on the Internet. Those taxes were lowered by 1 percentage point to ease the implementation.

What Amazon expects to gain from cutting off its sales partners is “not entirely clear,” the San Francisco Chronicle writes.

Later in the article we read, “Connecticut, Illinois, New York, North Carolina, Arkansas and Rhode Island have all passed similar laws requiring Internet retailers to collect sales tax — sometimes called an “Amazon tax” — and Amazon responded by dropping its associate partners in those states, CNN Money reported.”
Comments on Amazon versus California:
#1 ::: P J Evans ::: (view all by) ::: July 09, 2011, 10:28 AM:

It's harder on the dropped associates than on Amazon. The associates might have been paying their hosts with the money from the click-throughs.

#2 ::: Walter Hawn ::: (view all by) ::: July 09, 2011, 10:31 AM:

As I remarked to a fellow on Twitter, who lambasted California for it's "anti-business" attitude, it is Amazon which is anti-affiliate. They have, as you note, on several occasions simply cut people adrift rather than collecting taxes that are legitimate and due. And it's not like it would be hard to do. This is, after all, the computer age -- and California is offering to pay the company a pretty hefty commission for collecting the tax. The collection fee in my state is a mere .5% of tax collected. As I understand it, in California Amazon stands to collect 1% of the total purchase.

#3 ::: David Harmon ::: (view all by) ::: July 09, 2011, 10:43 AM:

On the one hand, so far it's only seven states standing up to them. On the other, that list includes New York and California. I think Amazon is about to get their hide handed to them.

#4 ::: James D. Macdonald ::: (view all by) ::: July 09, 2011, 10:54 AM:

I dropped all my Amazon Affiliate links over a year ago, when Amazon (in their assault on Macmillan) removed the "Buy" links from all my hard-copy books published with Tor -- see Amazon & Macmillan and Amazon versus Macmillan. This in addition to all the other AmazonFails.

I wanted--I really wanted--to change my links to Barnes&Noble, but alas! I still (despite my best efforts) don't know how to make myself a B&N Affiliate or make affiliate links to them. I know how to link to them (or I thought I did, though they change the format of the links often enough that entire swodges of links go 404 on me, requiring me to re-write 'em all).

Following B&N's instructions that to be an affiliate I first had to be a Google Ad Partner, I went and became one of those, only to find that B&N wasn't listed among the Google Partners. This has had the result of filling my inbox with offers to advertise things that I wouldn't touch in a million years, but nothing helpful.

So, instead, I have a Powell's affiliate account (fast and easy to make, but the reporting on what's sold is... less than optimal), but I still haven't recovered the income that I lost by cutting off Amazon.

#5 ::: Sylvia ::: (view all by) ::: July 09, 2011, 11:11 AM:

Tangentially related: Amazon.co.uk are being talked about loudly for dropping access to a book for being "not as described":

Mark Lynas: Home » Uncategorized » The God Species withdrawn from Amazon – censorship?

The author suspects that politically-motivated complaints were made as a result of the content of his book and Amazon.co.uk reacted by blocking. Certainly, I've never seen the "not as described" issue used for a book before, only for items. The book is still available in Kindle format on Amazon.co.uk and appears to be available in all formats on Amazon.com so it's certainly not an across the board decision.

#6 ::: kow ::: (view all by) ::: July 09, 2011, 11:32 AM:

As I've had this described to me, it is actually slightly more complicated: the tax collection law only applies to companies having a *physical presence* in California - and the change reclassifies the affiliates to count as such a physical presence (which I think we can all agree is at least slightly silly...). By dropping the affiliates, Amazon remains in exactly the same position as before, namely not due to collect any sales tax from Californian customers (and so, particularly, prices can remain unchanged for them).

Of course this is all a bit silly, but it really seems to be a case of the State of California attempting to subvert the rules on interstate trade and taxation. (Now, whether those rules are good is of course another question.)

#7 ::: Lawrence Schimel ::: (view all by) ::: July 09, 2011, 12:01 PM:

Amazon is also not complying with the new law, requiring them to collect sales tax (other online retailers, such as B&N.com, are):

http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2011%2F07%2F03%2FBUIB1K5DPM.DTL&tsp=1

#8 ::: CLP ::: (view all by) ::: July 09, 2011, 12:06 PM:

Walter @2: I'd say California's inability to collect the sales tax from Amazon is anti-business--that is, anti the brick and mortar businesses in the state that compete with Amazon and have to collect the tax.

Also, Amazon's refusal to collect sales tax is an inconvenience to their customers. I don't know about California, but most states with a sales tax also have a use tax, meaning customers who buy things tax-free from Amazon are legally obligated to pay the equivalent amount to the state themselves. I really feel annoyed for having to fill out a form and write a small check to my state every month, just because Amazon wants to build their business on facilitating tax evasion. Knowing that I have to do this (and knowing Amazon could do it automatically) makes me less willing to buy things from Amazon.

I know some people will say I'm a fool for paying this tax that the government wouldn't really be able to collect otherwise, but I sleep better at night knowing I'm not a lawbreaker and that I am actually paying my fair share for the government services provided by my community. (Also, I'll point out that at least one state, Illinois, has taken to requiring unpaid use tax be reported on a state income tax form (and paid at that point), which means Amazon is really creating a headache for its Illinois customers, since lying on a tax form is a crime.)

#9 ::: Calliedl ::: (view all by) ::: July 09, 2011, 12:18 PM:

Maybe I am completely misunderstanding, but it sounds like the tax is based off of the affiliate's address rather than the address of the person making the purchase. In some respects that makes sense because the affiliate is making a referral off the purchase. However, as someone who lives in a state that doesn't charge tax on online purchases, it would be very confusing to sometimes be assessed taxes from the state of California and sometimes not. I assume they could do a notification that would explain why, but in general it would have the affect of encouraging people to not click on affiliate links that might be charging tax or might not, but instead go directly to Amazon.com to order. I can inderstand California's need for the tax revenue, but I can also see why Amazon would not want that kind of confusion either.

#10 ::: P J Evans ::: (view all by) ::: July 09, 2011, 12:35 PM:

6
What's happening is that legislators are discovering that people buy stuff online from out-of-state sellers, and are, at least in part, assuming that the sole purpose for doing it is to avoid sales tax. When a large part of your state's tax revenue is from sales tax, and a number of people are going out-of-state to make their more expensive purchases (for California, this translates mostly to people buying vehicles in Nevada and Arizona), the 'obvious' thing to do is to make people pay tax on all their online purchases. (They have not, on the other hand, gotten around to requiring sales taxes on airplanes and boats. There are a lot of Very Important People with airplanes and boats.)
(California's income tax forms have had a line on them for some years, for voluntarily reporting purchases for which sales tax is due.)

#11 ::: Henning Makholm ::: (view all by) ::: July 09, 2011, 12:44 PM:

#9 Calliedl: I don't think it is that simplistic. My guess is that by having any affiliate in California, Amazon will be deemed to have "deliberately availed themselves of the protection of California's laws" (or some such legal formula that expresses the constitutional reach of state long-arm laws), and will therefore be obliged to follow Californian law for all sales to Californians, irrespective of whether those sales went through a Californian affiliate.

It seems to me that the real underlying trouble is that the collection of sales tax on interstate transactions is left for the states to deal with themselves. Wouldn't it be a classic case where Congress ought to step in and set up some common rules? Even if the common rule were just that any Internet retailer anywhere must arrange for the collection of any sales tax applicable to the customer. Of course, it should be structured to allow retailers to use a licensed service provider for this and be insulated from errors made by the service provider -- most smallish retailers would not be able to shoulder that administrative burden by themselves, but if it became a universal requirement, surely a market for the service of proxying payments through the right kind of sales tax processing would arise (possibly as a standard add-on to merchant account agreements) and competition would keep fees fairly low.

#12 ::: utsusemi ::: (view all by) ::: July 09, 2011, 12:56 PM:

As a California voter (relatively recently emigrated but still), what drove me nuts when I first heard this story a couple of weeks ago was, that this state has a many-million-dollar hole in the budget again, and the only tax bill that can actually pass is a proportionately insignificant online sales tax that's quite possibly unconstitutional anyway. Gosh, I thought the state government was too dysfunctional to keep the lights on in the public schools next year, or keep its excessively numerous inmates somewhere more humane than an industrial chicken coop, but, phew, we're saved now!

#10, I wasn't aware there's a hole in the sales tax for planes and boats, but it doesn't surprise me too badly. Relying heavily on sales tax is usually not something you do if you want your tax code to be equitable anyway.

#13 ::: Deirdre Saoirse Moen ::: (view all by) ::: July 09, 2011, 01:20 PM:

I'm not a fan of sales tax, but in California our property tax is constitutionally limited.

Consider, though, that if you have the ability to shop over the internet and avoid sales tax -- you are a person of privilege. That money pays, especially in California (where our property tax is capped), for social programs and for education. We've got horrific budget problems.

A significant fraction of Americans don't have bank accounts or credit cards, or pay horrific fees for pre-paid cards. They are buying locally and contributing to the sales tax base, which is paying for social services. Those better off, though, they're shopping at Amazon, who's contributing little to the government of most states.

So, long form: it's an even more regressive tax than it would be if people were doing more shopping in-state.

Personally, I'd rather shop locally and pay the tax if the underlying price is the same or similar.

#14 ::: Linkmeister ::: (view all by) ::: July 09, 2011, 01:41 PM:

The applicable SCOTUS decision is Quill v. North Dakota handed down in 1992. It had to do with catalog sales by mail order outfits, but the precedent is what Amazon is relying on.

There's what looks like a decent overview of the issue at something called the New Rules Project. It's pro-tax, but the facts appear to be laid out the same way I've seen them elsewhere.

#15 ::: Charlie Stross ::: (view all by) ::: July 09, 2011, 02:20 PM:

I haven't noticed anyone mention this so far, but: Amazon collects and pays VAT (sales tax) throughout the EU. And have done so since they began shipping stuff in Europe, without complaint.

You might think the situation between VAT in the EU and sales tax in the USA is different. VAT is, after all, pretty much universal within the EU. It is paid to the state in which the sale is final, the level of the tax varies, and in some cases (e.g. books and printed matter in the UK) the product is zero-rated (i.e. liable for tax at 0%).

About the only obvious difference is that California wants sales tax paid on sales to people living in California, while VAT is paid to EU states on sales from the state in which the retailer is based, or into which goods from outside the EU are initially imported. But that doesn't seem to be any kind of justification for shedding sales affiliates.

I see this as Amazon playing hardball because the USA doesn't have a federal framework for states to charge sales tax. It's a disgrace, and deserves to be treated as the tax evasion scam that it is.

#16 ::: Damien Neil ::: (view all by) ::: July 09, 2011, 02:31 PM:

Amazon's position on sales taxes is, I believe, that they'd be happy to collect them *if* every other online retailer was also required to collect them. They aren't willing to be put at a competitive disadvantage just by virtue of being the biggest target around.

This does seem to me to be a reasonable position to take.

Hopefully, we'll eventually get a tax code that doesn't favor out-of-state mail-order companies over local businesses--either by moving away from sales taxes to (hopefully less-regressive) taxes, or by creating some federal framework for states to require out-of-state retailers to collect sales tax.

#17 ::: Angelle ::: (view all by) ::: July 09, 2011, 02:32 PM:

Another item that was (for my money) buried in the Times story is that Amazon has actual physical offices in California. They own IMDB, which is a couple miles from my house, they've launched an Amazon Studios office down here, and I believe that they also have some Bay Area facilities.

So really, they just screwed the affiliates as an attempt to generate some political leverage while they fight this in court.

#18 ::: P J Evans ::: (view all by) ::: July 09, 2011, 02:57 PM:

16
The rule until now has been that mail-order sales pay tax if they're in the same state and it has sales taxes. This usually appears a a line item: 'residents of X pay Y% sales tax', which the buyer is expected to calculate and enter.
I can't even tell you what my sales tax rate is (except it's somewhere upward of 8%), because there are various local taxes too.

#19 ::: Brooks Moses ::: (view all by) ::: July 09, 2011, 04:26 PM:

Walter Hawn @2: I expect that your "It's not like it would be hard to do" statement is not as true as you think. Sales tax is, like most taxation, fiendishly complicated -- it varies by locality rather than being uniform across the state, different localities (or at least different states) have different rules about what things are taxed or not taxed, and you not only have to collect the tax, you have to file the appropriate paperwork to send it to the governments that you're collecting it on behalf of.

For Amazon, the cost of this is undoubtably a small portion of their sales -- and, insofar as this remains an issue for large sellers, it may not be a big issue. However, I think that people (like the ones Linkmeister @14 linked to) who claim that this is a trivial matter of software even for small businesses are living in a world of theory rather than real red-tape practice.

#20 ::: Glen Blankenship ::: (view all by) ::: July 09, 2011, 04:46 PM:

A couple of frequently-overlooked points: Sales tax (at least here in California) has several components: state, county, and city. There are about 1700 different sales-tax jurisdictions in the state.

Sales taxes are based on the point of sale, or more precisely, on the point of delivery. Brick & Mortar retailers charge whatever their local combined tax rate is on in-store sales, and if they ship out of area, they (can but don't always) charge only the applicable component - shipments out-of-city pay no city component, out-of-county, no city or county component, and out-of-state, none at all.

My home address is irrelevant. I live in the city of LA in LA County, but if I go shopping in Beverly Hills, the Beverly Hills merchants collect and remit Berverly Hills city sales taxes. If I go to Knott's Berry Farm, the souvenir sellers collect and remit sales taxes to Orange County and the city of Buena Park.

The California law would require Amazon to collect and remit the correct tax amounts for each of those 1700 jurisdictions, based on the buyer's address.

And there's no really foolproof way of translating postal addresses to tax jurisdictions - the USPS is more concerned with its own delivery-route sorting than with the niceties of actual municipal boundaries.

Many residents of "Beverly Hills 90210", for example, are actually in the city of LA - but their mail routes through the Beverly Hills PO, so, to the Post Office, they're Beverly Hills.

Many LA communities - Hollywood, Silver Lake, Echo Park - are simply "Los Angeles, CA" to the PO. But none of the city of LA communities in the San Fernando Valley are "Los Angeles", because their mail routes through SCF Van Nuys, not SCF Los Angeles, and the USPS doesn't allow the same city name in two different SCF service areas.

Likewise, Wilmington and San Pedro, LA City communities down by the port, go through SCF Long Beach - so they're not "Los Angeles" either.

And finally, it should be noted that California already has a tax on Amazon purchases - it's called "Use Tax", and California residents are required by law to report their out-of-state purchases and remit the appropriate tax.

It's true that the Use Tax law is frequently flouted by Californians (many of whom aren't even aware of it), and the state makes almost no efforts at enforcement.

But I'm not entirely sure why California's failure to educate its citizens and collect the taxes it's already owed should be Amazon's problem.

#21 ::: albatross ::: (view all by) ::: July 09, 2011, 04:46 PM:

Deidre #13:

I don't think it's nearly as clear-cut as that. At least in terms of local county taxes, my local Borders gets police and fire protection from the county, and its employees get schooling and other services from the county. As far as I know, Amazon doesn't get any of those things from the county.

Now, the customers also get services from the county. But then, it's hard to see why I get taxed on anything I buy while *away* from home at the rate *there*, even though I get very little benefit from local services in Indianapolis when I'm only stopping in to buy some gas and a coke[1]. And local governments have a very long history of finding ways to tax out-of-towners and out-of-staters, as you'll notice anytime you stay in a hotel where there's an additional local tax or surcharge or whatever added to hotel bills or car rentals.

The way it looks to me, this seems much less like a moral battle than like a simple dispute over who gets the money. California's legislators see a pot of money they'd like to tap into, and a bunch of online merchants would rather not have to collect it for them and raise their prices correspondingly. I see no particular reason to root for California over Amazon here.

One interesting wrinkle here is that I imagine more and more of Amazon's sales are entirely electronic, downloading electronic books[2]. I wonder how that affects both the arguments and the practical aspects of collecting the sales tax.

[1] Obviously, not *zero* value--it's surely nicer to drive through Indianapolis given the existence of local police, at least to the extent that they're not also trying to raise revenue from out-of-towners with speed traps or civil forfeiture.

[2] Though since I discovered Project Gutenburg's wonderful list of e-books, my electronic book buying has gone down quite a bit.

#22 ::: heresiarch ::: (view all by) ::: July 09, 2011, 04:53 PM:

Glen Blankenship @ 20: "And there's no really foolproof way of translating postal addresses to tax jurisdictions -"

What?

#23 ::: Glen Blankenship ::: (view all by) ::: July 09, 2011, 05:05 PM:

...and the other frequently-overlooked point is that California legislators are perfectly well aware that the claim that affiliate referrals constitute a "nexus" for the purpose of tax liability is very likely to be thrown out by the courts, and the law itself voided as unconstitutional.

But California's laws require the legislature to pass a 'balanced budget' by a specified deadline; and, if they don't, they don't get paid.

But the 'balance' of the budget is based on *projected revenue*. Even if the law is unconstitutional, it produces projected revenue, which allows them to pass a budget on time and collect their paychecks.

And they know that.

And Amazon, I'm betting, wasn't particularly interested in paying for that charade, either by setting up all the necessary collect-and-remit bookkeeping to comply with the law, or by risking prosecution for refusing to comply.

#24 ::: Alan Hamilton ::: (view all by) ::: July 09, 2011, 05:08 PM:

Sears has been dealing with this since the pre-internet days, and seems to cope. If you buy something from Sears.com, the appropriate sales tax is calculated. So someone has done the software development.

#25 ::: KayTei ::: (view all by) ::: July 09, 2011, 05:22 PM:

I'd give odds that if the law does stand, the complexities of figuring out all that local tax variations will be picked up by a subscription service or two, freeing up the corporations from having to try to figure it all out themselves using in-house resources. That seems like one of the weakest arguments against the law to me.

I think Angelle's point @ 17 is right on target, though: Cutting off the affiliates doesn't do Amazon any good in extricating them from the requirements to comply with the law, when they already have a non-affiliate physical presence in the state. It looks to me like a PR stunt at best, and shallow spite at worst...

As an aside, my husband got one of their kiss-off notes, and has stated that it was such a patent effort to get him to demand that his legislators revoke the law that it makes him want to redirect all his business away from them in future.

#26 ::: joann ::: (view all by) ::: July 09, 2011, 05:23 PM:

heresiarch #22: Glen Blankenship @ 20: "And there's no really foolproof way of translating postal addresses to tax jurisdictions -"

What?

Indeed. Travis County in Texas has a major city, any number of towns, various unincorporated areas that sort of have names, multiple school districts, a hospital district, a community college district, and probably a few other things. It's quite a Venn diagram, but the tax assessor's office seems quite capable of sorting it all out; that is, I've heard of tax protests, but they all have to do with appraised value, not wrong location.

#27 ::: Brooks Moses ::: (view all by) ::: July 09, 2011, 05:35 PM:

heresiarch @22: As an only-halfway-imaginary example: The farm where I grew up crosses a county boundary. Now, as it happens, neither county charges its own sales taxes, and the house is in the same county as the local post office, so "420 Geographic Features Road, Town, VA" is in the same tax jurisdiction as Town. A couple of decades ago, we built a new farmhouse -- and seriously considered a site that would have (by chance) have nearly been in the other county. If we had built the house in the other county, we would have been living in a different tax jurisdiction -- without having changed our address. It would even be entirely possible for us to build a rental cabin on the other side of the farm, in the other county, with the resident getting their mail from the same post office box we do.

This is not mentioning the theoretically-solvable problem that, if Town were incorporated and had its own sales tax, the farm would still have the same postal address but would be outside the town limits and thus not in its tax distribution despite having an address very similar to addresses within the town limits.

#28 ::: Brooks Moses ::: (view all by) ::: July 09, 2011, 05:38 PM:

It is probably also worth noting that I suspect Glen Blankenship @20 meant "no foolproof way short of having a complete list of every address and its tax jurisdiction". You can have such a list when you're the county tax assessor and have laws that require that people notify you when they build new things in your jurisdictions, and you only have to care about a limited area.

A complete up-to-date list for all residences in the U.S. is an entirely different thing.

#29 ::: P J Evans ::: (view all by) ::: July 09, 2011, 06:13 PM:

20
Not to mention that some of those places now seem to exist as entities only for the purposes of the post office, although they were not-quite-towns once. (I had a time last fall when the DMV said my nearest office was Winnetka. Everyone else, I think, calls it the Canoga Park DMV office.)

#30 ::: P J Evans ::: (view all by) ::: July 09, 2011, 06:19 PM:

The company I work for has people whose job is to keep track of property tax areas. (That includes annexations as well as incorporations.) We do it because we have to pay taxes on our facilities in public property (i.e. streets), as well as all the permits needed for work.

#31 ::: Henning Makholm ::: (view all by) ::: July 09, 2011, 06:41 PM:

#28 Brooks Moses: "A complete up-to-date list for all residences in the U.S. is an entirely different thing."

But certainly within the realm of possibility. In Denmark there's a national database of all street addresses (residental or otherwise) with exact map coordinates and administrative divisions, collated from data maintained by the municipalities. Our local government structure is more uniform than the US, and we're only 5.5 million people, but still that's less than 6 doublings from covering the U.S.

#32 ::: Glen Blankenship ::: (view all by) ::: July 09, 2011, 07:41 PM:

After a refreshing nap and further reflection, I realize, of course, that any mis-assignment of local revenue due to postal vagaries is fairly unlikely to concern state tax collectors, or Amazon, or even the local jursidictions themselves.

No one cares that it's done perfectly; just that it's done.

So, um, don't mind me.

#33 ::: lorax ::: (view all by) ::: July 09, 2011, 07:54 PM:

Dierdre @13:

I'm not a fan of sales tax, but in California our property tax is constitutionally limited.

Consider, though, that if you have the ability to shop over the internet and avoid sales tax -- you are a person of privilege. That money pays, especially in California (where our property tax is capped), for social programs and for education. We've got horrific budget problems.

California residents are theoretically supposed to pay the sales tax for untaxed online purchases with their state income tax. A lot of people I knew made a ballpark estimate, or even just ignored it altogether. (I usually tried to actually count things up, which was much more annoying than just paying the damn tax directly would have been, or even having a flat fee.) Yeah, the state has horrific budget problems, but I don't think they can generally be traced to a decrease in sales tax revenue due to online purchases, even assuming most residents don't actually pay this tax.

#34 ::: Mary Aileen ::: (view all by) ::: July 09, 2011, 09:06 PM:

lorax (33): New York has the flat fee* option on the income tax form. Or you can figure out what you actually owe. The flat fee's usually a pretty good deal for me, and it's a lot easier than keeping track and doing the math.

*actually a sliding scale based on income.

#35 ::: CLP ::: (view all by) ::: July 09, 2011, 09:47 PM:

Here's the information on California use tax. All Californians who shop at Amazon to avoid having tax collected are committing tax evasion. They are lawbreakers.

I spent the first 28 years of my life living in Oregon, a state without sales tax. The Columbia River forms the border between Oregon and Washington, and located in the Oregon part of that river is Hayden Island. This island boasts a shopping center, often frequented by Washingtonians who are evading their state's sales tax. Amazon is apparently seeking to be the Hayden Island of the Internet, and I think it's perfectly right for states to oppose that.

#36 ::: albatross ::: (view all by) ::: July 09, 2011, 11:19 PM:

CLP:

Many people are lawbreakers. That doesn't establish, at least in my mind, the moral question about whether they're obligated to do something different. Nor how I should feel about (or react to) them doing it. Neither for Californians who buy books at Amazon, nor for Californians who buy things out of state without reporting it.

#37 ::: Roy G. Ovrebo ::: (view all by) ::: July 10, 2011, 12:17 AM:

Brooks Moses @ 19: Walter Hawn @2: I expect that your "It's not like it would be hard to do" statement is not as true as you think. Sales tax is, like most taxation, fiendishly complicated -- it varies by locality rather than being uniform across the state, different localities (or at least different states) have different rules about what things are taxed or not taxed, and you not only have to collect the tax, you have to file the appropriate paperwork to send it to the governments that you're collecting it on behalf of.

Starting this month, suppliers of "electronic services" to Norwegian customers are supposed to collect and report VAT. There's a website they need to register on. It's the same system Charlie Stross mentions at comment #15. (Though I see from Amazon's webpage that they're not taking Norwegian VAT.)

I have to admit I don't give much of a damn whether online shops can be bothered to collect sales tax from every banana republic that decides to pay lip service to domestic businesses.

#38 ::: Rick York ::: (view all by) ::: July 10, 2011, 12:23 AM:

I am a book/reading junkie. I could not support my habit without Amazon (and, a great local library). That said, Amazon and all other online retailers have been getting away with highway robbery for years. And, highway robbery may well be literally true. How many hard working state employees, contractors and medicaid recipients, etc. have been hurt by the utter greed of Amazon and its online peers?

I live in Oregon, one of two states without sales tax . (I last lived in New Hampshire, the other one). The lack of a sales tax - plus other revenue idiocies - has wrought havoc with every public institution in this state, particularly schools and health care.

The idea that the number of taxing entities makes it "difficult" or "impossible" to determine sales tax is sheer nonsense and demonstrably false.

It's long past time that Bezos and Amazon lived up to their civic responsibility.

#39 ::: CLP ::: (view all by) ::: July 10, 2011, 12:54 AM:

albatross@36: I didn't say they were bad people, just that they were lawbreakers. Furthermore, they might not even realize it.

I don't think it's right, either: these people are failing to pay their fair share for government services in their community.

My overall point is that Amazon is crying that they are being treated unfairly, when really they are trying to build a business model around facilitating lawbreaking. I think a state is doing its job when they try to prevent that.

#40 ::: Dave Bell ::: (view all by) ::: July 10, 2011, 04:19 AM:

One interesting thing about VAT in Europe, and the UK in particular...

There's nothing in the tax system to stop Amazon from shipping goods from outside the EU, and avoiding tax liability. There's an EU-wide exemption for goods of low value. Most paperback books and DVDs fall below that limit. So far as I can tell, so do most ebooks.

It's also arguable that the restriction of sales rights within the EU might be unlawful. It's a free trade thing. Whether Amazon wants to get all the publishers angry with them at the same time, is an open question.

20% VAT on ebooks (the UK rate) should be noticable.

I see www.amazon.com is selling the Kindle version of Rule 34 at $9.82

The same book from www.amazon.co.uk is GBP 5.99, which converts to about $9.59 at the current rate.

Amazon UK should be quoting a VAT-inclusive price. Neither Kindle price shows an obvious relationship to the price of the local print edition: Amazon, with the Kindle ebook, is competing aggressively against the publisher.

Somehow, they've found a way around the VAT, or they're making enough money that they can afford to pay it.

Or they're trying to win a price war against other ebook sources, and once they have a monopoly they are going to recover their losses from us all.

#41 ::: Julia Jones ::: (view all by) ::: July 10, 2011, 05:01 AM:

For as direct comparison of US and UK Kindle prices as you can get, let's look at the Kindle prices of my books, which are published by a small press epublisher with world rights. Identical editions on each Amazon site are currently priced as follows:

$6.93     L4.31 (equivalent $6.93)
$6.93     L4.31 (L6.93)
$9.26     L5.76 ($9.25)
$4.63     L2.88 ($4.62)
$5.71     L3.60 ($5.78)
$7.99     L4.97 ($7.98)
$6.93     L4.31 ($6.93)

$ equivalent for the sterling price was calculated using the live rate calculator widget at xe.com.

I would note that the Amazon prices bear no discernible relationship to the actual cover price as given on my publisher's website. There is at least one duology in there where the longer and higher priced one is currently the lower priced of the pair on Amazon.

I'd have to dig through my royalty statements to make a guess at whether it's effectively my publisher and I who are paying the 20% VAT, via a lower VAT-excluded selling price for calculating royalties.

#42 ::: James Moar ::: (view all by) ::: July 10, 2011, 05:57 AM:

Amazon.co.uk is registered in Luxembourg, which seems to mean that they would be paying VAT on Kindle sales there, at 15%. I pass this detail on for those who can interpret these things better than I can (i.e., almost everyone).

#43 ::: Heather K ::: (view all by) ::: July 10, 2011, 07:12 AM:

@Rick York: Unless it's changed recently, there's a third state without sales tax, Delaware.

#44 ::: Heather K ::: (view all by) ::: July 10, 2011, 07:16 AM:

Lately, I've been pushing Indiebound as a potential income source. Support your local independent bookstore and get paid for it. As for sales tax, if the store's really local, they have to collect it anyway.

#45 ::: pm215 ::: (view all by) ::: July 10, 2011, 08:32 AM:

Dave Bell @40: In particular, DVDs from amazon.co.uk will often actually come from Indigostarfish, which is a Jersey company set up in order to take advantage of the fact that Jersey isn't in the EU and has a 0% VAT rate, so they can effectively avoid charging VAT to UK customers for things less than 18 quid (will fall to 15 quid in November, since the government is reducing the size of this loophole).

As a practical matter, I think taxes work better when they're (a) not too complicated and (b) collected mostly automatically. 1700 separate sales tax jurisdictions in one state, and setups which require individual consumers to report their own tax liabilities don't seem to fit those criteria.

#46 ::: Roy G. Ovrebo ::: (view all by) ::: July 10, 2011, 08:50 AM:

Dave Bell @ 40: Amazon UK should be quoting a VAT-inclusive price.

IANAL, but I think we as consumers can claim good faith if we assume VAT is included. It's _they_ who are breaking the law if they aren't deducting it. And according to the website, they do indeed follow UK law - and currently break Norwegian law.

There's a table that shows how VAT applies in the EU countries. The US site also has a page detailing sales tax stuff. What a bloody nightmare.

#47 ::: Manny ::: (view all by) ::: July 10, 2011, 10:52 AM:

Henning Makholm @31: The USA is a big country with a lot of odd jurisdictions. It's boggling what the Census Bureau has to do to keep track of all the addresses, or try to, and they have help from the Postal Service through pavement pounders looking around for overlooked people. Here are a coupla papers that will give you an idea:

http://pewsocialtrends.org/2010/01/29/counting-every-address-in-the-census-joseph-salvo-at-pew-research-center/

http://www.census.gov/pred/www/rpts/F.15.pdf

Amazon would have to have a current version that list, with a taxing jurisdiction overlay. I don't know how they could do it unless they negotiated a "close enough" deal with each state.


MAO

#48 ::: Josh Jasper ::: (view all by) ::: July 10, 2011, 11:41 AM:

Why the state of CA hasn't just whipped up a "Californians should not buy Amazon" public campaign is beyond me. Sure, not taking in sales tax is helping Amazon, but a statewide boycott (by choice) measure supported by the state government could potentially cause a lot more damage.

I'm not picking a side here, I'm just wondering why California is playing softball to Amazon's hardball. CA could be pushing back a lot harder.

I'm not sure my idea is legal, but I'd love to see Amazon try to take CA to court for a state sponsored boycott, and then explain to a jury that them not collecting taxes owed the state is hunky dory, while a states response of asking (not requiring) CA residents to boycott Amazon is not.

#49 ::: CZEdwards (aka the Other Constance) ::: (view all by) ::: July 10, 2011, 11:43 AM:

I just don't buy amazon's "too complicated" argument. Apple, Barnes & Noble, and Google books have all managed to implement local sales taxes with a minimum of fuss and bother.

Colorado charges sales tax on electronic media; Google books though the Boulder bookstore is my preferred vendor, followed by BN, then Apple, then Amazon. Google is in the same situation in Colorado as Amazon is in in California -- both have non-retail facilities in the state -- but I don't see Google's business suffering because it must collect about 9% from me.

It's not like Amazon doesn't have a history of behaving badly, nor should this be a surprise -- remember, Amazon dropped Colorado affiliates when we implemented our media sales tax. I can't feel sorry that Amazon needs to hire a few accounting professionals and implement the same damn software that the other media companies are using. Amazon is taking advantage of local infrastructure to deliver their product, albeit at a remove via the post office and UPS/FedEx. Their business model would not work without local roads and the telephone infrastructure. Right now, that cost is all externalized as far as Amazon is concerned, but it shouldn't be.

#50 ::: Michael Walsh ::: (view all by) ::: July 10, 2011, 12:09 PM:

In regards to the sales tax issue, might I suggest that the larger question isn't should Amazon be collecting California sales tax, the question is should, as an example, a retailer in New Hampshire who exists only in that state be required to collect and remit California sales tax on purchases made by a California resident.

For those not aware, New Hampshire is one of 5 states in the US that does not have a sales tax.

The 1992 Quill decision is important to read and understand: Quill

Short version here: Wiki Quill

IANAL, but I would think that California by redefining nexus and subsidiary companies essentially recognized that Amazon was operating under the law.

One of the problems the store in New Hampshire might have is knowing if the item is in fact taxable. The states have recognized this problem and are working on a set of common definitions, such as: What exactly is a candy bar? When does it become a “health bar”? See: Streamlined Sales Tax

To add to fun & games of this adventure, Maryland - where I live - is unlikely to join the Streamline Sales Tax since Maryland rounds up the sales tax. See: Rounding Maryland

Lastly, under the observation regarding the law of unintended consequences: should Amazon be required to collect sales tax, they will probably have to report only quarterly to the states. They’ll earn a nice piece of interest on that action.

Second, since Amazon fought hard to get a sales tax collection exemption in South Carolina for opening a warehouse there, I would imagine that with nationwide sales tax collection Amazon will be opening warehouses in areas that do a lot of business with them. Could they offer same day delivery on orders placed before a certain time?

So Jim: How do you think your local New Hampshire stores will take to possibly collecting taxes for the 45 states?

#51 ::: Michael Walsh ::: (view all by) ::: July 10, 2011, 12:20 PM:

@#49 ::: CZEdwards "I just don't buy amazon's "too complicated" argument."

I believe their argument is that it's unconstitutional.

Bezos Speaks

#52 ::: Michael Walsh ::: (view all by) ::: July 10, 2011, 12:32 PM:

#47 ::: Manny "Amazon would have to have a current version that list, with a taxing jurisdiction overlay. I don't know how they could do it unless they negotiated a "close enough" deal with each state."

The software is there: the Big Box Stores such as WalMart, Barnes & noble, Borders, any nationwide company make use of it. It's no big deal really.

For "Ma & Pop" Main Street store, the costs for such might be a little daunting.

#53 ::: Michael Walsh ::: (view all by) ::: July 10, 2011, 12:38 PM:

#3 ::: David Harmon: "On the one hand, so far it's only seven states standing up to them. On the other, that list includes New York and California."

There's an ongoing lawsuit with NY. Sure to go to SCOTUS. And NY ain't getting any money yet:

"Amazon is depositing the collected taxes in an escrow account until the case is settled."

#54 ::: P J Evans ::: (view all by) ::: July 10, 2011, 12:51 PM:

47
The post office uses address databases which are not always correct. I know someone who was routinely having some of his mail routed to wrong addresses (in particular, his mortgage bill), and his local post office's response was 'tell us which database vendor it is, and we'll get it fixed'. (Like Average Person will be able to find out that information.)

#55 ::: Diana ::: (view all by) ::: July 10, 2011, 01:31 PM:

"I'm not a fan of sales tax, but in California our property tax is constitutionally limited.

Consider, though, that if you have the ability to shop over the internet and avoid sales tax -- you are a person of privilege."

Uh, Huh?

You are going to have to define 'person of privilege' to include, well, pretty much everybody. Anybody who has access to a library or school has computer access; pre-paid cards work great...and students with any sense at all get their books from online vendors rather than their school bookstores, if they possibly can; one can save up to 90% that way---which is rather important to people without privilege.

There is an old saying I made up: "Fifty cents or fifty dollars...it's all the same if you ain't got the fifty cents."

I am a Californian. I'm also attempting to build an online business as an affiliate marketer--and California has just cost me a lot more money than I can afford to lose. I'm also a California teacher who is out of work because of, well, California.

I can't move because I'm upside down in my house and my very elderly parents live with me. Trust me, If I COULD move, I'd be gone in half a heartbeat.

That's my background--and I'm rooting for Amazon. Yes, it might well be possible for Amazon to handle the costs of collecting sales tax; it would require a lot more than 1% of the taxes collected to do so, though, when you consider that if California wins this, every single state in the union will then do the same thing; Amazon will end up with a tax collection department that rivals the IRS.

Even so, Amazon could probably do this. But what about, oh...Lendrum...a small manufacturer of really good spinning wheels? How about Ms. Miller who sells her hand painted wool roving from Etsy?

....or the guy who retired and makes the most gloriously beautiful hand spindles (for spinning that roving)?
......or the yarn shop in Logan, Utah, who stays in business for the local people in great part because the owner can sell Addi-Turbo knitting needles and wool roving (and hand spun yarn) to knitting enthusiasts throughout the USA--who do not have a local yarn shop?

Oh, and what about the customers who want such things...and can no longer find them because their favorite bloggers/websites will not offer them for sale anymore?

Is California really that stupid?

.....?????

Never mind.

Dumb question.

#56 ::: Larry ::: (view all by) ::: July 10, 2011, 01:40 PM:

This is an interesting conundrum. I live in NJ, why should I pay the state of California sales tax? That is really how I view it. I don't live in the state so I don't see the need to pay them sales tax.

I don't understand why normal mail catalog rules should not apply? If you sell to someone in a state you have an official presence of some kind then taxes apply. This is really just a money grab on the part of the state. Don't the businesses/affiliates affected report their own taxes and pay based on their sales?

#57 ::: albatross ::: (view all by) ::: July 10, 2011, 01:56 PM:

It seems pretty clear that Amazon could do this, since other online merchants manage it, and since Amazon actually does have lots of money they could spend on setting such a system up. It also seems likely that this would pose a practical barrier to entry for small online merchants, unless there was a fairly straightforward, low-cost way to add it into your online transactions. Perhaps one partial solution to the cost problem would be for states to supply the relevant tables free to all comers as a prerequisite for online merchants being required to supply the information? That is, if California wants online merchants to collect the taxes, they must provide the necessary information so that it's a single table lookup to go from the address to the sales tax rate and addresses. (Is something like this available now?)

#58 ::: albatross ::: (view all by) ::: July 10, 2011, 02:01 PM:

CZEdwards:

Amazon is taking advantage of local infrastructure only to the extent that they expect UPS drivers to be able to survive the trip to deliver the books. That seems really different from the situation where a local store is expecting the police and fire departments to respond to alarm callouts, has employees in-state attending public schools and driving on public roads, etc.

#59 ::: heresiarch ::: (view all by) ::: July 10, 2011, 02:08 PM:

The argument that figuring out state, or even county or city taxes is some bogglingly difficult computational task in this day and age strikes me as quite odd. There are 50 states, 3,143 counties, and 30,000 cities. All told, there are roughly 85,000 political entities in the US, the majority of which I'm guessing don't charge sales tax. Compare that to the three or four orders of magnitude larger number of items that Amazon handles on a daily basis, and it's hard to believe this is purely a technical problem.

#60 ::: albatross ::: (view all by) ::: July 10, 2011, 02:14 PM:

CLP:

I guess I see this as being rather like state and federal authorities cracking down on internet gambling. As best I can tell, this is done mainly to protect the revenue of state-licensed casinos and state-run lotteries--also a source of funding for state governments[1].

Now, people who are gambling online are lawbreakers. And they are, in some sense, depriving local and state governments of revenue, since those same gamblers might have taken part in the state lottery or gone to a state-approved casino that pays a fraction of their proceeds to the state, if they hadn't spent their money at the online casino. And yet, I'll admit that I just flat don't see that the customers of the online casinos are doing anything wrong there, or that the states have some inherent right to a cut of their citizens' gambling money.

This looks rather similar to me. The practical question is whether the state or local authorities can get a cut of the loot. Why should I root for the states that want a cut of the loot, instead of their citizens who want to spend their own money somewhere else, or the online casinos that want to provide a wanted service to people online?

[1] And the states do use this money to do good things, but also to do dumb and evil things. When I pay Maryland sales tax on online transactions, am I supporting state social services programs that feed the poor and clothe the naked? Or am I supporting building more prisons to appease the prison guards' unions or the privatized prison-building corporations?

#61 ::: Jon Baker ::: (view all by) ::: July 10, 2011, 02:15 PM:

I don't see what the issue is with sales taxes. Amazon already collects sales tax on my orders, as I live in NY State. I'm sure it also collects sales tax on orders from NJ or CA etc. Are they afraid of double-taxing if they collect tax on behalf of affiliates? E.g. I'm in NY, they would charge me sales (use) tax at the NY rate, but if I buy from an affiliate in NJ, would they also have to collect both NY (8.875%) AND NJ (7%) tax, thus double-taxing my purchase?

#62 ::: albatross ::: (view all by) ::: July 10, 2011, 02:18 PM:

Higgedy-piggedy
fingertips fidgety
albatross posting is
captured by gnomes

Arguments quickly typed
filtered statistically
powerwordistically
kept from your homes

#63 ::: KayTei ::: (view all by) ::: July 10, 2011, 02:26 PM:

Yay, albatross. Loving your post @ 61.

#64 ::: abi ::: (view all by) ::: July 10, 2011, 02:41 PM:

albatross @61:

The gnomes take great interest in discussions of the application of probability theory in the pursuit of money, particularly as practiced on the internet.

#65 ::: Bruce Cohen (Speaker to Managers) ::: (view all by) ::: July 10, 2011, 02:48 PM:

I know of several companies in the business of selling software to businesses to track and manage tax liability. They're typically international in scope, dealing with cross-border tariffs, local sales taxes and VAT, inventory taxes, etc., etc. So saying that it's too difficult to keep track of sales tax is disingenuous at best.

#66 ::: Michael Walsh ::: (view all by) ::: July 10, 2011, 03:26 PM:

#55 Larry "This is an interesting conundrum. I live in NJ, why should I pay the state of California sales tax? That is really how I view it. I don't live in the state so I don't see the need to pay them sales tax."

Er ... no.

California doesn't care about you since you don't live in California.

California wants Amazon to collect California sales tax on orders placed by California residents.

#67 ::: Michael Walsh ::: (view all by) ::: July 10, 2011, 03:29 PM:

#58 ::: heresiarch
"The argument that figuring out state, or even county or city taxes is some bogglingly difficult computational task in this day and age strikes me as quite odd. There are 50 states,..."

Good news: only 45 states have a sales tax.

Anyway, since WalMart, Barnes & Noble, even Borders (!) collects sales tax for online purchases. it's not really that difficult.

The cost of the tax package, well ... that's probably another story, no?

#68 ::: hamletta ::: (view all by) ::: July 10, 2011, 03:51 PM:

Amazon is being just as recalcitrant here in Tennessee. They've proposed building a big fulfillment warehouse here, but only if they can get out of collecting sales tax from TN residents.

The state doesn't have an income tax, so sales tax is a rather important source of revenue. It is also very high (9.75% here in Nashville).

#69 ::: Carrie S ::: (view all by) ::: July 10, 2011, 04:21 PM:

albatross: I guess I see this as being rather like state and federal authorities cracking down on internet gambling. As best I can tell, this is done mainly to protect the revenue of state-licensed casinos

A friend of mine makes most of his money from poker. These days, though, he has to go to a physical casino to play, because he can't play online anymore.

This means he spends way more time in Las Vegas than he used to, so his home state isn't making the money anyway. (Nevada is, mind, but he doesn't live in Nevada.)

I'm not sure what that means about the effectiveness of shutting down net-gaming to preserve real-life gaming, but it's a datapoint...

#70 ::: Ken Brown ::: (view all by) ::: July 10, 2011, 05:13 PM:

@Brooks Moses. There are some places where *national* boundaries go through farms or even houses. It happens in the Irish border, and I think between Belgium and the Netherlands. There are probably others I've not heard of.

#71 ::: C. Wingate ::: (view all by) ::: July 10, 2011, 05:35 PM:

re 69: There was a case a few years back where it was discovered that a restaurant straddled the county line-- which was important due to differences in liquor laws. In the next election the two owners had their own personal ballots to allow them to choose which county the property would be in.

#72 ::: pm215 ::: (view all by) ::: July 10, 2011, 06:26 PM:

@70: Wait, *two* owners? I wonder what would have happened if they'd voted in opposite directions...

#73 ::: SamChevre ::: (view all by) ::: July 10, 2011, 06:48 PM:

I'll probably write more later, but I keep seeing this and it keeps bugging me.

Anyway, since WalMart, Barnes & Noble, even Borders...

All those merchants have physical stores, and the tax rate is based on the local store rate, NOT the customer address rate.

And "you collect sales tax at the business location, not the customer location" is not some Amazon loop-hole--that's been established law for catalog merchants since the 1920's at least.

#74 ::: heresiarch ::: (view all by) ::: July 10, 2011, 07:51 PM:

albatross @ 59: "The practical question is whether the state or local authorities can get a cut of the loot. Why should I root for the states that want a cut of the loot, instead of their citizens who want to spend their own money somewhere else, or the online casinos that want to provide a wanted service to people online?"

I'm tempted to launch into a quick explanation of the social contract and such forth, but I'm immediately struck with the suspicion that you're perfectly familiar with the idea already. Which then begs the question of why you are pretending that the government, duly elected representatives of the people, are just like a criminal gang demanding their "cut" of the "loot." Amazon, and Californians for that matter, ought to pay tax because the tax is what makes everything else possible, from having an internet connection and safe roads to having human beings with disposable incomes. It's not even as if all that coming crashing down for lack of revenue is a particularly far-fetched scenario for California.

Governments need income in order to provide the services that they are obliged to provide. The particular methods employed and the compromises practicality forces upon the system are just that---a compromise, and subject to revision as circumstance warrants. The rules on where taxes are paid were written before internet commerce formed a significant fraction of the economy, and it's no outrage or crime to revisit the tax code in the light of that fact.

The wonder here is that a major corporation is actually being asked to pay the taxes it owes. Amazon's real mistake, it seems, was in taking advantage of an existing oversight, rather than pushing to have one custom-made.

#75 ::: heresiarch ::: (view all by) ::: July 10, 2011, 07:52 PM:

I got gnomed.

#76 ::: heresiarch ::: (view all by) ::: July 10, 2011, 08:00 PM:

They're quite feisty today. Did you switch them to a new kibble?

#77 ::: Workergnome ::: (view all by) ::: July 10, 2011, 08:29 PM:

If I understand this correctly, the issue isn't so much getting the information, but keeping it updated. Say my town of 900 people passes a 5% tax on fishing gear to take advantage of the fishing tourist trade. Both fishing supply stores and the local grocery'll know, since they'd likely have been fighting it with city hall for the past couple months, but how is amazon supposed to keep track of it? Multiply by some large number of juristrictions, and some larger number of categories, each defined by people trying to made exclusions for constituents...

And remember that Amazon'd be liable if they screwed this up. You can see why they're not happy.

#78 ::: Tané Tachyon ::: (view all by) ::: July 10, 2011, 09:38 PM:

As another California Amazon Associate/affiliate who was abruptly dumped, I want to put in a good word for Musician's Friend -- not only have I gotten a lot more affiliate commissions from them over the years than I ever did from Amazon, but also I received an email from them Friday saying among other things:

"Historically, Musician’s Friend has not collected sales tax in California because it does not have a physical presence in the state. In connection with the new law, we carefully reviewed our options for moving forward. Even though our analysts project a loss in revenue in California as the result of being at a pricing disadvantage to online retailers that have terminated their affiliates in favor of not collecting sales tax, Musician’s Friend remains committed to our California-based affiliates and has decided to continue those business relationships and begin collecting sales tax in California."

Not that I can link to something like, say, a bike light there, but you can definitely see the difference between the approaches taken by the two companies.

#79 ::: Stefan Jones ::: (view all by) ::: July 10, 2011, 11:28 PM:

Years ago, I set up a promotional website for an RPG product I'd written. I set up an Amazon associates account to profit from some links to associated books.

I really never pushed or updated the site much. Kind of lost track of it.

A few weeks back I got Amazon's termination notice. (I was living in CA when I set up the account.) I dug around, found the account log in, and tried to update the address of record, since I now live in Oregon.

Turns out that A) the account was closed years and years ago, and B) it had earned a total of 18 cents.

#80 ::: KayTei ::: (view all by) ::: July 10, 2011, 11:36 PM:

Workergnome @ 76
"And remember that Amazon'd be liable if they screwed this up. You can see why they're not happy."

Not really, or not as much as they'd like you to believe. That's what accounting firms and subscription services are for: offloading liability and establishing good faith effort. It has the side benefit that in these cases it's often cheaper to go to specialists who are selling the same service to multiple bidders than to attempt to develop and manage such systems in-house. And if you're having problems as a result of using a well-established vendor, so are several other corporations, which makes you less likely to be a specific target and provides you with significant additional cover.

#81 ::: sisuile ::: (view all by) ::: July 11, 2011, 12:13 AM:

Something I keep seeing in this discussion is "Amazon has dumped affiliates so they won't have a physical presence in-state," and while that may be what they are *saying*, people have been pointing out that Amazon already has a physical, brick-and-mortar presence in CA. If they have not been collecting sales taxes on CA residents up to this point, they have already been in violation of state law, even the ones applicable to mail order catalogs.

#82 ::: pm215 ::: (view all by) ::: July 11, 2011, 03:00 AM:

sisuile@80: If that's true, why isn't CA simply going after them for back taxes rather than passing new laws?

#83 ::: Dave Bell ::: (view all by) ::: July 11, 2011, 03:25 AM:

@80 and 81, referring back to sundry Amazon owned companies.

The corporations are separate entities. It doesn't matter who owns them.

The affiliates: are they part of Amazon, or an agent for Amazon, or no more a part of Amazon than is an advertising hoarding?

I don't think either side on this is playing an honest game.

#84 ::: Jon Baker ::: (view all by) ::: July 11, 2011, 06:58 AM:

I don't see what the issue is with sales taxes. Amazon already collects sales tax on my orders, as I live in NY State. I'm sure it also collects sales tax on orders from NJ or CA etc. Are they afraid of double-taxing if they collect tax on behalf of affiliates? E.g. I'm in NY, they would charge me sales (use) tax at the NY rate, but if I buy from an affiliate in NJ, would they also have to collect both NY (8.875%) AND NJ (7%) tax, thus double-taxing my purchase?

#85 ::: Phiala ::: (view all by) ::: July 11, 2011, 08:32 AM:

I'm not a tax accountant (and incredibly glad of that!), but I do know a little bit about sales tax. I own a small business in Pennsylvania and sell retail goods online.

My physical presence is in Pennsylvania, and I am required to collect sales tax on all sales to addresses also in Pennsylvania.

If I were selling goods in person, I would have to collect from everyone because the actual exchange of goods is in PA.

If I were to go to NY for the day, I would have to obtain a NY tax license and collect NY sales tax because the exchange of goods would be in NY.

If I sell something online to a person in NY, I do not have to collect sales tax because I do not have a physical presence in NY. The recipient may or may not be liable for that sales tax, and be supposed to submit it as use tax (almost certainly is), but it's not my problem.

If I establish a satellite store in NY, then I have to collect sales tax on NY online purchases from either location, and on PA online purchases from either location, and submit them to the appropriate states, because now I have a physical presence in both places.

As I understand it, the change made the Amazon Associates into a physical presence for Amazon, and by dumping them Amazon intended to avoid the need to collect sales tax on CA sales. And CA isn't the first state where this has happened: if you dump all your affiliates, then you have no local presence and it isn't your problem.

No purchases are double-taxed. Sales tax is calculated based on the shipping address. A retailer shipping to NY charges NY tax, and one to PA collects PA tax. If, of course, that retailer has a physical presence in those states.

Again, the buyer is still supposed to submit use tax if sales tax is not collected.

It gets more complicated in municipalities where local sales taxes are collected, but again I think that both seller and buyer must have a physical presence there.

I'd like to say that I think the sales tax code should be updated, and that all online retailers should be required to collect sales tax for whatever jurisdiction, but realistically? No. I'd close the business if I had to collect and file taxes for 50 states, let alone internationally. That's well beyond my available accounting time and capability.

#86 ::: Wessells ::: (view all by) ::: July 11, 2011, 08:43 AM:

I live in New Jersey and view taxes as a sign of civilization (We are most civilized state). It is interesting that Amazon have maintained Abebooks.com as a Canadian enterprise with no U.S. presence (and with no simple provision for bookselling companies with physical presences to collect requisite sales tax on sales brokered by Abebooks.com ). Would it kill you to use a real book store while they still exist? I don’t use Amazon is U.S. and only reluctantly in Europe (and now time to re-think that one).

Wonder why bridges, hospitals, cities are failing? Pay taxes and stop war. But that's another topic

#87 ::: Michael Walsh ::: (view all by) ::: July 11, 2011, 09:26 AM:

#84 ::: Phiala: "I'd close the business if I had to collect and file taxes for 50 states, let alone internationally"

I can instantly reduce that burden by 10% since only 45 states have a sales tax.

#88 ::: Michael Walsh ::: (view all by) ::: July 11, 2011, 09:30 AM:

#83 ::: Jon Baker "Amazon already collects sales tax on my orders, as I live in NY State. I'm sure it also collects sales tax on orders from NJ or CA etc."

Well, yes & no. It's complicated: Sales Tax Collected By Amazon

#89 ::: Victoria ::: (view all by) ::: July 11, 2011, 09:44 AM:

@ #22

It's not that hard as these things go. All that's needed is a look-up table that cross references PO address with GIS/GPS addresses followed by a bit of code to do the math and fill in the appropriate blank. The most onerous part would be keeping the rate table up to date.

The point for me, though, is mute. I live in the state where Amazon is headquartered and has their main shipping office. I pay Amazon.com taxes.

#90 ::: David Harmon ::: (view all by) ::: July 11, 2011, 11:01 AM:

One response to the complexity would be to explicitly restrict "local" taxes -- that is, below state level -- such that Internet sales only need to keep track of state and (possible) federal sales tax.

#91 ::: TexAnne ::: (view all by) ::: July 11, 2011, 11:09 AM:

David, 89: Not even necessary. My current town spans either two counties, or incorporated-and-not, or...I don't even know, and I've lived here three years. But on certain websites, I'm asked whether I live in "Town, County," or "Town, Something Else." It's possible with current technology--Amazon just doesn't want to.

So yeah, California's budget woes are its own fault. That doesn't mean Amazon isn't run by moneygrubbing sshls who will probably buy a majority on the Supreme Court.

#92 ::: Michael Walsh ::: (view all by) ::: July 11, 2011, 11:11 AM:

#89 ::: David Harmon "One response to the complexity would be to explicitly restrict "local" taxes -- that is, below state level -- such that Internet sales only need to keep track of state and (possible) federal sales tax."

The problem with this idea is that the bricks & mortar stores believe that collecting sales tax will "level the playing field" and collecting anything less is unfair.

Of course a truly level playing field would also require no discounting too.

#93 ::: Michael Walsh ::: (view all by) ::: July 11, 2011, 11:14 AM:

#90 ::: TexAnne: "My current town spans either two counties, or incorporated-and-not,"

A few years one of my co-workers received a jury duty summons from Baltimore City. She declined since she lived in Baltimore County. Her zip code crossed the City/County line.

#94 ::: Serge Broom ::: (view all by) ::: July 11, 2011, 11:20 AM:

When we moved to Albuquerque 11 years ago, I found that our front door is in one zip code, and our kitchen in another.

#95 ::: David Harmon ::: (view all by) ::: July 11, 2011, 11:36 AM:

TexAnne #90: For me, it's City of Charlottesville vs. Albemarle County, which encloses the City but doesn't always get along with it. I'm within a block or so of the border.

#96 ::: Michael Walsh ::: (view all by) ::: July 11, 2011, 12:12 PM:

#73 ::: SamChevre "I'll probably write more later, but I keep seeing this and it keeps bugging me.

Anyway, since WalMart, Barnes & Noble, even Borders...

All those merchants have physical stores, and the tax rate is based on the local store rate, NOT the customer address rate.

I sit corrected. That said, the brain/finger connection went elsewhere, so let me clarify what I meant to write:

"Anyway, since WalMart.com, bn.com, even Borders.com collects sales tax for online purchases. it's not really that difficult."

Even if these companies have but one physical location in a state the dot com end of things needs to be able to collect the correct tax statewide, even when the statewide sales tax might be variable throughout the state.

So, if B&N has a store in East Arm Pit, bn.com needs to be able to collect the correct sales tax for orders placed from a customer West Arm Pit, which has a different rate.

Anyway, there's software out there that handles these things. I have no idea what it costs.


#97 ::: aphrael ::: (view all by) ::: July 11, 2011, 12:28 PM:

The Kerfluffle over the affiliate program is a bit of a sideshow, though, because the law also says that there's a nexus for tax purposes if the company owns a subsidiary within California and that subsidiary has a substantial role in creating products which the company then sells.

That nexus is much more reasonable than the tenuous assertion of a nexus for affiliate programs.

And Amazon has a division in California which works on software for the Kindle.

It's hard to imagine a constitutional challenge to this subsidiary-corporation nexus. And, while Amazon could simply relocate its kindle software operation to Seattle, that seems unlikely; moving technical development teams tends to result in needing to replace most of the engineers, which is painfully destructive for software projects.

#98 ::: SamChevre ::: (view all by) ::: July 11, 2011, 12:53 PM:

Even if these companies have but one physical location in a state the dot com end of things needs to be able to collect the correct tax statewide, even when the statewide sales tax might be variable throughout the state.

I'm pretty certain that's not how it works. If you have a physical location, the tax rate statewide is based on the physical location of your store. (I'm 99% certain that when I bought from B&N, I paid tax at the county rate (where my local B&N was), not the city rate (where I lived)).

#99 ::: Melissa Singer ::: (view all by) ::: July 11, 2011, 01:05 PM:

Sam Chevre @98: Physically, that's how it works in NY, anyway--you pay sales tax based on where the store is physically located. Inside NYC boundaries, one tax rate; outside NYC boundaries, a different tax rate. I assume it's the same anywhere--stores don't ask for your zipcode before ringing you up.

#100 ::: Mary Aileen ::: (view all by) ::: July 11, 2011, 01:16 PM:

Yes, but when you order online, or through a traditional print catalog, from a company located in your state, you pay the appropriate sales tax.

Except it might just be the state tax rate, not county/local taxes; I forget what I've paid when ordering from BN.com (for example).

#101 ::: C. Wingate ::: (view all by) ::: July 11, 2011, 01:39 PM:

The issue inside the issue is that the traditional tradeoff for the customer was taxes for shipping. Paying both puts on-line/mail-order at a price disadvantage WRT stores unless the shipping costs are matched by discounted prices or disappear (the latter being what L.L.Bean did: they have such a large retail presence now that probably most of their online customers have to pay sales tax).

#102 ::: Phiala ::: (view all by) ::: July 11, 2011, 02:03 PM:

#86 Michael Walsh

I can instantly reduce that burden by 10% since only 45 states have a sales tax.

But I'd need to keep records for all fifty because part of the filing process is to report both taxable and nontaxable income for each state. I would need neither a tax license nor a quarterly report for those five, but there's still an accounting burden.

#98/99/etc:

Mail/internet is a bit different from physical sales. Storefront sales occur entirely within a particular tax boundary, and that's what is paid. The bookstore doesn't care where you're from, because the merchandise is sold within their tax zone.

But if the bookstore sells you a book by mail, they need to know where you are relative to that tax zone. If you and the bookstore are within Philadelphia boundaries, they collect the Phila local and PA state taxes. If you are in PA but outside Phila, they collect the state tax only, and if you are outside PA they collect nothing. So for distance sales both the shipping address and the store address are relevant.

(Based on my experience with the PA sales tax board; I do not run my business in a municipality that imposes additional local tax, but if I did I would have to collect it when appropriate.)

#103 ::: Michael Walsh ::: (view all by) ::: July 11, 2011, 02:08 PM:

#101 ::: C. Wingate:

"The issue inside the issue is that the traditional tradeoff for the customer was taxes for shipping. Paying both puts on-line/mail-order at a price disadvantage WRT stores unless the shipping costs are matched by discounted prices or disappear (the latter being what L.L.Bean did: they have such a large retail presence now that probably most of their online customers have to pay sales tax).

L L Bean has retail locations in 10 states, see: Find The Bean

#104 ::: heresiarch ::: (view all by) ::: July 11, 2011, 04:16 PM:

Phiala @ 84: "I'd like to say that I think the sales tax code should be updated, and that all online retailers should be required to collect sales tax for whatever jurisdiction, but realistically? No. I'd close the business if I had to collect and file taxes for 50 states, let alone internationally. That's well beyond my available accounting time and capability."

And that's why this particular loophole has endured: enforcing it has been too burdensome for too little reward. But what's unreasonable to demand of mostly-local businesses doing a couple hundred thousand dollars of business is not necessarily unreasonable to demand of a mega corporation operating at international scales--it is not excessively burdensome, and the revenue is not insignificant. When the loophole constituted a tiny portion of the total revenue then it wasn't worth the bother, but with the rise of internet business, it's become a larger and larger part of the tax-base not being taxed. It's not hard to see why they might need to adjust things to address it.

#105 ::: Patrick Nielsen Hayden ::: (view all by) ::: July 11, 2011, 04:28 PM:

I just now approved heresiarch's #95; I don't know why it got gnomed. Its appearance will of course now mess up numeric references to posts between #96 and #105. Apologies.

#106 ::: heresiarch ::: (view all by) ::: July 11, 2011, 04:34 PM:

Thanks!

#107 ::: C. Wingate ::: (view all by) ::: July 11, 2011, 04:57 PM:

re 104: The obvious solution is for the programmers among us to put together the killer service to mediate all of this a la PayPal and then lobby the states and Commerce to force all the interstate taxes to be paid, with an exemption for itty-bitty concerns. Then everyone beats a path to our door and we all become rich.

#108 ::: abi ::: (view all by) ::: July 11, 2011, 05:18 PM:

Patrick @105:

And I have just unpublished heresiarch's placeholder comment, sorting out the numbering up until your comment. I'll now manually tweak C Wingate @107 and the timelines will run smooth again*.

-----
* Mostly smooth. The only remaining aftereffect will be a reversal of the order of your surnames; now Teresa's original name is first and yours is second. Oh, yes, and now it's men who have beards in our species. An unavoidable side-effect. Soon even the memory of Teresa's snowy mustache, and my natty little goatee, will fade†.
† Maybe in this timeline you'll grow one. That would be weird. A beard. On a man.

#109 ::: Serge Broom ::: (view all by) ::: July 11, 2011, 05:20 PM:

Abi @ 108... Been watching reruns of "Sliders"?

#110 ::: Roy G. Ovrebo ::: (view all by) ::: July 11, 2011, 05:23 PM:

Phiala @ 84: I'd close the business if I had to collect and file taxes for 50 states, let alone internationally.

This is what makes the EU (and Norway) VAT thing completely bizarre. If you deliver "electronic services" i.e. e-books etc to European customers
1) You can inadvertently break the law of a foreign country by not collecting VAT and you may not even be aware of it at all.
2) There's no punishment for breaking the law, but there is one for complying with it. Even if you get below the (admittedly rather high) cutoff limit and don't have to pay, there's still the paperwork to be done.

Those who do not learn from Monty Python are doomed to repeat it.

#111 ::: Phiala ::: (view all by) ::: July 11, 2011, 05:37 PM:

You're right, of course, heresiarch (#104). A minimum sales level below which the retailer is not obligated to file taxes would solve the mega- vs micro-retailer issues.

But say this goes into effect. Would I have to file a statement with all 45 sales-tax-collecting states to aver that I sell a minuscule amount and am not worth bothering with? Annually, or more often? Sales tax is usually a quarterly obligation. There are a lot of potential snags, and it's hard to see them going in my favor.

#110 - Roy G. Ovrebo: I have no idea how VAT works. I do sell things to the EU, but I've always assumed that my customs paperwork is sufficient. I might be wrong (probably am?), but I'm not sure I really want to know. There's really no possible way I could collect and submit VAT; it's also outside my capability.

#112 ::: Jeremy Leader ::: (view all by) ::: July 11, 2011, 05:59 PM:

I'm scrolling down to make a minor point before I've read the last 1/3rd of the thread, apologies if someone else has already pointed this out here:

Regarding the question of whether the collection of local taxes benefits Amazon in any way, I read a comment elsewhere pointing out that some of those taxes go to local schools, which teach people to read, which means more customers for Amazon!

#113 ::: eric ::: (view all by) ::: July 11, 2011, 06:47 PM:

About Tax Complexity: Washington state is Very Complicated.

1) In state mail order business are taxed at the location of the buyer.

2) There are many (hundreds, likely) sales tax rates in Washington. State, County, Locality, RTA, and other such. I _think_ it might be ok to go on zip code, but no guarantees there. (I'm not sure my little town has a different sales tax, I'm not in the city limits, but I am in the same zip code). There's a webapp to figure it out, and it gives a hash to prove that you checked the tax rate for a location for a particular date range.

So, my tax rate for Amazon is different from someone who lives in Everett, or Seattle.

#114 ::: j h woodyatt ::: (view all by) ::: July 11, 2011, 08:16 PM:

It isn't just property tax that's constitutionally limited in California. It's all taxes and fees.

Legislative supermajorities are constitutionally required to increase them or create new ones. Ballot initiatives that increase/create taxes or fees also require supermajorities. The GOP anti-tax zealots in California represent a statistically significant minority, and like they do at the federal level, they enjoy a powerful ideological lock on their party apparatus. Between these facts and the constitutional requirement for a balanced annual budget, it's wonder California can still pretend to be a functional state at all. Everything happening at the federal level these days looks tediously familiar to anyone who follows California budget politics.

In recent years, the comedy has been especially dark, with the treasurer looking for innovative ways to work around the fact that states are constitutionally prohibited from bankruptcy. One of my favorites that illustrates the depth of the silliness was when the treasurer briefly floated a plan to revert California back to the status of U.S. territory for financial purposes. I was actually kinda hoping that one would fly.

#115 ::: Linkmeister ::: (view all by) ::: July 11, 2011, 08:46 PM:

I once bought a book on Amazon as a gift for someone who lives in Spokane, WA. I was charged sales tax. On my invoice it merely stated "Washington State Tax." It didn't break it down between the state and the local tax authority (if Spokane has one). I suspect it all went into one pot at Amazon called "WA state sales taxes payable" on its books and was paid out to the state at the end of the month.

#116 ::: P J Evans ::: (view all by) ::: July 11, 2011, 09:33 PM:

85
The writer has clearly never tried to buy something that isn't currently in print or in xe's local stores.

#117 ::: David Harmon ::: (view all by) ::: July 11, 2011, 09:39 PM:

j h woodyatt #114: "He's spending a year dead for tax purposes".

#118 ::: JESR ::: (view all by) ::: July 11, 2011, 10:19 PM:

I was reading the "sales tax collected by Amazon" list with its repeated refrain of "and WA" when I came to the NYT link and was startled, for a moment, by the break in rhythm. It does point out a small additional complication: different states have different items to which sales tax does not apply; in Amazon's home state and mine, newspapers are not taxed. Neither is food (although the definition of "food" has been limited, and then those limitations overturned) prescription drugs, and certain services which can be done through the internet, like bookkeeping and accountancy.

More evidence that the complexity of the tax-lack-of-system in the UNited States as a whole is a bad thing, and leaves us open to manipulation by people who do not have the society's best interests in mind and exploitation by businesses ditto.

#119 ::: Linkmeister ::: (view all by) ::: July 11, 2011, 10:42 PM:

Addendum to my item @ #115, the gift book was for delivery to my friend in Spokane. Had I had it shipped to me out here and then mailed it myself I'd not have been charged sales tax.

#120 ::: Allan Beatty ::: (view all by) ::: July 11, 2011, 10:54 PM:

Manny at # 47: Thanks for the informative links.

Heresiarch at # 59: The size of the problem is not the 40,000 governmental units. It's placing each of the 150,000,000 or so addresses into the proper locality, and getting it updated when cities annex more territory. (Yes, this happens frequently.) The Census Bureau has recently been bold enough to do this every year instead of every 10 years. From what I hear behind the scenes (not in the linked web site), the Census Bureau has to cajole the local governments to get them all to participate; maybe they'd be more cooperative if tax revenues were immediately at stake. It's a big problem, but it's feasible.

I think Albatross at # 57 has the best idea: The states should provide official lookup tables. The local governments are under their authority, and they have a major stake in getting it done right.

#121 ::: Stefan Jones ::: (view all by) ::: July 12, 2011, 12:03 AM:

Wouldn't it be cool if it took a public referendum to pass a tax break for a corporation or industry?

HAHAHHHAAAAHA. Yeah, I know.

#122 ::: Glenn Hauman ::: (view all by) ::: July 12, 2011, 02:07 AM:

Actually, I'm waiting for the next shoe to drop-- for the states to continue to insist Amazon pay taxes because their Kindle authors live in those states, and therefore they have sales representatives there. It's certainly an easy enough argument to make: I publish a book for the Kindle or via Createspace, I promote it. I'm acting as a sales rep for Amazon, even if it's for my own book. Heck, Createspace even says it's MY store when I sell products through it.

Let's see Amazon start unpublishing books from authors and publishers in California, Illinois, and New York. That'll go over REAL well.

#123 ::: Dave Bell ::: (view all by) ::: July 12, 2011, 06:12 AM:

Phiala @ 111

There's an exemption for VAT and import duty on small transactions. Otherwise, the purchaser can have to pay these on delivery, and an admin fee.

As long as you properly declare the value, and what the item is, you're in the clear. Talking where we are, the zero-rate for Books in the UK really matters. But some things can mess that up in the fine detail of the definition.

Whether mail, or a business such as Fed-Ex or UPS is the best option for the admin fees, I don't know.

(Not a lawyer, not an accountant)
Some non-EU businesses do enough trade with the EU to make it worth them paying the VAT and doing the admin, as though they were within the EU.

All this is based on my being in the UK, and the details may differ for other EU countries. But I believe the basic principles are the same. I also have seen instances of firms making a false customs declaration, marking something as a gift or a sample, which gives them a higher limit on the exemption. That's illegal.

Grey area: splitting a large order into consignments which go under the exemption limit. It seems pretty common, and it maybe worked best where you have stuff in manufacturer's packaging rather than splitting up a package marked "string craft kit"

#124 ::: SamChevre ::: (view all by) ::: July 12, 2011, 08:31 AM:

It does point out a small additional complication: different states have different items to which sales tax does not apply.

In practice, this is not a small complication.

I once made sausage and sold it at farmer's markets and festivals. I talked to the tax people (county or state tax department) and they said, pay tax at your home county rate everywhere--it's not technically legal but no one will care. Technically, though, I should have had a different tax license for every location -- and in each location, food, prepared food, and restaurant food were taxed differently from each other, and the latter two were taxed differently between jurisdictions, AND the line between them varied by jurisdiction. (If there's no seating, it's prepared food; whether seating provided by the venue counts varies between jurisdictions.)

But again, the technical issues are somewhat afield of the point; it's settled law that catalog merchants pay in their location, not the customers' locations, and local merchants have disliked catalog merchants and localities have disliked this set of tax laws since Sears and Roebuck. (The case that mail-order businesses may be required to collect sales tax if they also have local stores is Nelson vs Sears from 1941.)

#126 ::: TexAnne ::: (view all by) ::: July 12, 2011, 09:00 AM:

Michael, 125: Bad link.

#127 ::: Michael Walsh ::: (view all by) ::: July 12, 2011, 09:31 AM:

Argh! Try this:
http://www.latimes.com/business/la-fi-amazon-referendum-20110712,0,5517762.story .

Sorry about having to make y'all copy & paste ...

#128 ::: pm215 ::: (view all by) ::: July 12, 2011, 05:37 PM:

Phiala@112: at least in the UK, VAT does indeed have a "not for small businesses" exemption: if your turnover is less than 73,000GBP a year you don't need to register (and note that it's the large organisations that register, the default is 'not VAT registered'). This works because unregistered businesses, like consumers, must pay VAT on all the things they purchase (and then just sell at whatever price they want to sell at). Registered businesses must charge VAT, but they can claim back any VAT they pay when they buy things from other companies. So the taxman still gets a share from things sold by unregistered businesses, it's just taken out one step further back in the chain.

For items bought by UK consumers from outside the EU, as Dave Bell says there is "import VAT" once you get over a small (~GBP15) per-item limit, but this isn't the seller's problem, it's the buyer's. Typically customs will impose the VAT charge and then the courier will pass this on to the buyer together with an admin charge.

Supplying "electronic services" appears to be a bit less sensible in that you do have to register for VAT if you're an out-of-EU business supplying EU customers (although you can at least pick one EU country and register there rather than having to handle VAT to every EU country). I'm guessing that the "not if your turnover is too low" rule still applies, though.

#129 ::: James D. Macdonald ::: (view all by) ::: July 12, 2011, 05:39 PM:

Albatross #60, heresiarch #74:

For obvious reasons, the gnomes stop to examine any post that talks about "souısɐɔ ǝuıluo" in any of their forms.


#130 ::: Nonentity ::: (view all by) ::: July 12, 2011, 08:34 PM:

I know I'm de-lurking and jumping into this rather late, but to add to the anecdotes about the technical issues of keeping track of tax statuses around the country:

Shortly after buying a home several years ago, my credit card expired. I got a replacement, and all was well... until, that is, several months later when I tried to purchase an item from iTunes. No matter what I did, it would not accept my new billing information.

I spent two weeks going back and forth with people from Apple and my bank. Apple insisted that the billing information didn't match when they checked the account, and the bank insisted that everything was listed just fine. In the end, Apple told me they just couldn't help me, but that I was free to buy a gift card in a store if I wanted to give them my money.

Several months after this, I decided to try again. I prodded at the information I was putting in for a while, until I finally discovered that I could get things to work by giving it a slightly different zip code. Apparently, a new zip code had been introduced a year or two earlier, and that was the source of the issue.

Over a year later, I'm still occasionally running into major sites that can't take my money unless I give them an incorrect billing zipcode, or won't believe my shipping address. If it's that difficult to handle a small change like that in the database that is used to determine whether I can give my money to these companies at all, then I definitely don't believe that it's going to be a simple case for them (let alone smaller sites) to keep track of a myriad of local tax laws in places where they don't keep an actual presence.

#131 ::: P J Evans ::: (view all by) ::: July 12, 2011, 09:18 PM:

130
That sounds like a problem in the database[s] that they're using. (Yes, they do buy databases for this - it beats building your own.)

#132 ::: Paul Duncanson ::: (view all by) ::: July 13, 2011, 12:19 AM:

Michael @ 127: Sorry about having to make y'all copy & paste ...

No need to apologise. I use (and highly recommend) the Firefox plug-in Text Link. When installed, double clicking on a text URL that isn't a proper link will open it in a new tab.

#133 ::: Linkmeister ::: (view all by) ::: July 13, 2011, 01:54 AM:

Paul Duncanson @ #132, since the Linkification add-on doesn't work with FF 5.0, that's a useful tip. There are a couple of bug reports there, though. Have you run into either of them?

1. Works as intended, but it has very strong bug: when you select very large text to copy, the browser freezes for extremely long time. The bug dissapears after disabling Text Link. Firefox 4.0.1/ MacOS10.6.7/Text Link 4.0.2011

Rated 3 out of 5 stars by s0ulfly on June 18, 2011

2. It works well, but there is a bug where sometimes half an email is converted to a url. I found out that as soon as it seems a forward slash /, it makes everything that follows part of a url. I'm using 4.0.2011021601

Rated 3 out of 5 stars by davidstoll on April 22, 2011


I note that neither of those people were using FF 5.0, which is the latest version Mozilla's released.

#134 ::: David Harmon ::: (view all by) ::: July 13, 2011, 08:48 AM:

Paul Duncanson #132: I use the Hyperwords plugin, which (inter pluribus alia) lets me select the URL and right-click to "Open Link".

#135 ::: Dr. Psycho ::: (view all by) ::: July 13, 2011, 11:57 AM:

Eric @113: At least the state of Washington no longer requires people to pay retail sales taxes in mills, making it necessary for people to carry 1/10 cent "tax tokens"....

#136 ::: Nonentity ::: (view all by) ::: July 13, 2011, 12:33 PM:

P J Evans @ 131: Yes, naturally. The thing is, these are multiple large-scale sites that I've run into this problem with. If it takes several years for big companies to get anti-fraud databases updated with something as simple as a new zip code, I don't have a lot of hope for a simple (and cost-effective for small companies) technological fix for keeping up with tax code changes in every state and county in the nation.

#137 ::: Bruce Cohen (Speaker to Managers) ::: (view all by) ::: July 13, 2011, 03:22 PM:

Nonentity @136:

As I mentioned upstream, there are commercial software solutions for businesses. The vendors supply frequent updates to deal with changes in local tax laws and political boundaries. Whether they're cost-effective for small businesses I don't know. Check on sabrix.com if you want to investigate this1.

1. Disclosure: I know a couple of the software developers at Sabrix, and I once (about 2 years ago) interviewed for a job there.

#138 ::: Paul Duncanson ::: (view all by) ::: July 13, 2011, 05:29 PM:

Linkmeister: I haven't seen either of those bugs. I am using FF5 but they never appeared for me in any other version that I recall.

#139 ::: Allan Beatty ::: (view all by) ::: July 13, 2011, 07:42 PM:

Nonentity at # 130 and # 136: The big companies you had a problem with, or service bureaus serving small companies, must not be trying very hard. There are umpteen firms licensed by the USPS to provide software and/or services for address correction.

#140 ::: Allan Beatty ::: (view all by) ::: July 13, 2011, 07:47 PM:

And of course I thought of one more thing right after submitting. Companies that are actually mailing something have an incentive to get it right, because they won't qualify for postage discounts if they put wrong barcodes on the envelopes. Companies that don't mail anything by bulk rates but just decide whether a submitted address is legitimate, can probably get away with out-of-date databases because the USPS isn't double-checking a sample of their work.

#141 ::: Linkmeister ::: (view all by) ::: July 13, 2011, 08:28 PM:

Paul D @ #138, Thanks. I'll give it a shot, since I miss Linkification a lot.

#142 ::: shadowsong ::: (view all by) ::: July 13, 2011, 09:57 PM:

Linkmeister @133: I use Right-Click-Link - works like a charm.

My favorite obscure extension is RightToClick - it re-enables right click menus on sites that have disabled them through javascript.

#143 ::: P J Evans ::: (view all by) ::: July 13, 2011, 10:43 PM:

140
Some of them can't be bothered to do it right, though. And the post office, as I said earlier, may expect the customer to do the research to find out which of those licensed vendors is Doin It Rong.

#144 ::: Nonentity ::: (view all by) ::: July 14, 2011, 02:25 PM:

Bruce Cohen @ 137: As I mentioned upstream, "Yes, naturally. The thing is..." (I'm aware services exist. I have concerns about the utility in some of the situations this impacts. Since I'm not currently selling things out of state over the internet, however, it's still just an academic question for me... I'm just explaining *why* I have a concern.)

P J Evans @143: As it is, it took me an inordinate amount of time to figure out what was actually correct on the zip code issue. I never actually found verification anywhere that there had been a zip code change, despite hunting through the USPS site, the county's sites, and increasingly broad web searches. All I have to go on is an old address listing, and the different zip code the USPS site currently gives me.

#145 ::: Allan Beatty ::: (view all by) ::: July 14, 2011, 07:59 PM:

I think past zip code changes are buried in the Postal Bulletin archives. At least they were in the Postal Bulletin back when it was published on paper.

#146 ::: Nonentity ::: (view all by) ::: July 15, 2011, 10:18 AM:

Hmm, I see a few entries about zip codes in the archived indexes, but nothing that looks related to my issue. I'll have to take a closer look later. Thanks for the link.

#147 ::: TrashedMyCookies ::: (view all by) ::: July 15, 2011, 02:28 PM:

abi @ 108:

The change appears to have affected Hispanic surnames generally, not just Patrick and Teresa's.

And I'm still not yet used to my beard.

#148 ::: JM ::: (view all by) ::: July 15, 2011, 02:58 PM:

[pops into the thread long enough to laugh immoderately at Abi's 108; then, having nothing of substance to add, pops out again]

#149 ::: JeanOG ::: (view all by) ::: July 16, 2011, 04:56 PM:

The small business I work for moved to a building next door to the local post office several years ago. The address does not exist in any database used by any carrier, including the Post Office itself. Our company credit cards use the company owner's home address as the billing address; the business' street address gets kicked out of address validation checks. Conversations with people trying to find us get very interesting once they put the street address into their GPS.

The building has been there for at least 20 years.

#150 ::: TrashedMyCookies ::: (view all by) ::: July 17, 2011, 02:50 AM:

abi @ 108:

Changes appear to be more far-reaching than anticipated. Mammals generally, including humans, now express heterozygous sex chromosomes (XY) as male, and homozygous (XX) as female. Birds still express heterozygous as female and homozygous as male, but biologist now refer to the sex chromosomes in birds as W and Z: a female bird is WZ and a male is ZZ. This may or may not be related to the beard issue.

It is noteworthy that the female (WZ) bird is often substantially larger than the male (ZZ) of the same species, whereas the male (XY) mammal is often substantially larger than the female (XX) of the same species.

This is all going to take some getting used to.

#151 ::: Jeremy Leader ::: (view all by) ::: July 18, 2011, 05:47 PM:

Now see what you've done, TrashedMyCookies? If you hadn't trashed them, they'd have preserved all this state information, and nothing would have changed.

#152 ::: Michelle ::: (view all by) ::: July 19, 2011, 02:36 PM:

Colorado did this last year as well.

#153 ::: mythago ::: (view all by) ::: July 20, 2011, 05:07 AM:

I find it very hard to believe that this is anything more complicated than Amazon fighting against the idea that it should charge sales tax. The absence of sales tax, after all, gives it a business advantage over brick-and-mortar stores; and hiding behind affiliates is a much more sympathetic position than "We don't wanna".

#154 ::: Dave Howell ::: (view all by) ::: July 22, 2011, 08:24 AM:

Re: Jim@129:

"souısɐɔ ǝuıluo"

I am in awe. That zangled my frambulator. The C is reversed, the A is flipped, the E is rotated, the I is beheaded (or de-dotted). Did you just build that out of esoteric Unicode characters?

Oops. The A is also rotated, not flipped.

#155 ::: David Goldfarb ::: (view all by) ::: July 22, 2011, 06:11 PM:

Dave Howell: I'm betting that he used fliptext.org.

#156 ::: P J Evans ::: (view all by) ::: July 24, 2011, 01:46 AM:

There were people with 'no internet taxes' petitions outside the supermarket where I bought groceries this morning.
I didn't talk to them, so I don't know what line they were using to get signatures.

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