Amazon.com pays state and local corporate income and property taxes in Washington state. They do in fact fund the services that they consume in that locality.
Dewey, what do sales taxes fund? If, as your previous post implies, they help fund the fire department and police department, then isn’t Amazon incompletely funding the services they consume in that locality?
Daniel
No. Their sales to residents of Washington state also trigger Washington state sales taxes, just like any other Washington state merchant.
And I’ll note that, by your standard, service-oriented businesses (like, say, law firms) “incompletely fund” the services they consume to an even greater degree, since their “sales” aren’t subject to sales taxes in any event.
I’m just having trouble reconciling this with your later posts. There’s no “my standard” involved.
Either you tax sales according to the prevailing standards of the jurisdiction the company is in, or you tax sales according to the prevailing standards the buyer is in. I see no reason to privilege Internet sales above all other sales, simply because the vendor and purchaser are in different locations.
Daniel
The implication of your post was that businesses that don’t have sales taxes imposed on every economic transaction they engage in are “incompletely funding” the services they consume, even though they pay income and property taxes. That’s what I meant by “your standard,” and by that standard service enterprises also aren’t pulling their weight.
Frankly, I don’t see what’s inconsistent about my earlier and later posts. Amazon collects sales taxes for sales in Washington state, just like any other Washington merchant. That’s OK, because Amazon consumes resources in Washington state. They don’t consume resources in Texas or Maine or California, so they shouldn’t be taxed there.
I’m not sure how to explain what i see as the inconsistency any better; unless someone more eloquent than me can come along and explain it, I think I’ve gotta drop the point.
Daniel
OK, part of the reason for the national moratorium was to give time to the several states (and to the online merchants) to figure out a form of sales taxation that WOULD be manageable. Up until now, the collection of sales tax has depended on the merchant and consumer both having “presence” in the collecting jurisdiction.
Problem is, currently in the USA, you have thousands of consumer-tax combinations. Why? Because your State may have a sales tax… or not. A specific product or service may have an excise all its own imposed upon it apart from the general sales tax, again both at state and local level. And the general sales tax does not apply to exactly the same set of goods and/or services in every state. And let’s not even go into COUNTY sales taxes.
On top of that, many of our states have a “use tax”, an excise that you are supposed to pay when you buy certain items elsewhere and bring them into your jurisdiction of residence, but that the overwhelming majority of people don’t know of or bother with except if it’s some piece of industrial machinery or something similar that has an obvious paper trail. But the idea was that at some point, SOMEONE got taxed on the transaction, and you protected the local merchant.
Traditionally in the mail-order business, governments in “exporting” states or cities (e.g. Maine, home of L.L.Bean) figured the potential loss from not charging sales tax on all sales (or on ANY sales if you were Delaware) was balanced out by the job creation and income and inventory taxes involved. Governments in “importing” states or cities figured that mail-order, or Delaware-style “border runs”, were self-limiting because of the time and bother involved, and besides there was always the possibility of stepping up enforcement of the Use Tax for big-ticket items, and the savings would be pumped into the economy in some other activity anyway.
Going back to traditional mail-order or border-running as self-limiting because of the time and bother: people tended to use it for things that were NOT available at their hometown stores AT ALL, or at anywhere near as good a price, and therefore would not be a “lost sale” to a local merchant (because he did not sell it at all, or was not competitive anyway). But most people preferred to buy from somewhere they could actually at least drive to, if they had what they wanted (otherwise, why would Sears Roebuck, with that huge mail-order catalog, have built actual stores in malls?).
The net, paired with FedEx and its ilk, throws a monkey wrench into this by enabling A LOT of buying, including buying of mundane things like the latest Metallica CD, several pairs of Levi 501s, a box of inkjet refills, to be done EASILY, cheaply, and quickly at a distance.
Obviously, this panicked two groups: tax collectors who count on people satisfying all their needs at a local store, and the associations of local merchants, who live and pay taxes in the towns where legislators live and hold fundraising dinners. Because the easiest way to deal with it (collect the local tax where the e-store is) would be a windfall for a place like Freeport, Maine, but leaves nothign for Podunk. And samewise the tech sector companies, the net-merchants and the ISP subscribers, screamed and sent e-mails. Because the alternate, (colect the tax the citizen would have incurred) would require them to track the taxation status of every item in every state and incur huge costs to custom-pay taxes everywhere. So the compromise was: 5 years of hands-off, to come up with a fair scheme. That we may not be ready even with that much warning does not surprise me in the least, knowing politicians. And that’s just the sales tax side. The access tax is a whole another can of worms. Which bill will feature this tax? If I use a PRTC local line, or Adelphia’s cable, to access Earthlink, in whose bill will I be paying the access tax? Or will there be one "line tax’ and a different "service tax’? And what if I have multiple ISP accounts?
Since having some net-users heavily burdened by taxes, and others essentially getting a free ride, without rhyme or reason or consistency from county to county, seems to have been found to be a “bad thing”, the states will have to adopt as close as possible to a uniform scheme for non-point-of-presence sales (be it on-line, mail or phone)… or have it imposed from above by the feds. And yes that means divesting of some autonomy, and stripping some from localities.