As it stands now in the U.S., Amazon only has to collect and pay sales tax to states within which the company operates a physical facility of some sort, usually a huge warehouse or two from which items are shipped. That does, in my opinion, give Amazon an unfair edge on their competitors - businesses that have to collect sales tax on every sale they make. Amazon is leeching customers from these other companies and, especially in this tough economic time, customers will continue to flock to any retailer that starts with an eight or ten percent immediate price advantage. That's only consumer common sense.
Now Frederic Mitterand, the previously mentioned minister, is proposing a special tax on Amazon and large bookstores there to "help out" the smaller stores. Why not just close the tax loophole that allows Amazon to pay so little tax in comparison to smaller companies?
Europe is not America; I get it. But socializing bookstores is bad business and will, I imagine, have numerous unforeseen consequences for everyone - including consumers and those very bookstores that would receive the cash infusions. Just watch book prices skyrocket in France - unless they are already regulated by the government of that country.
(Not directly related to your post, but still Amazon-related...) Technically, even in the U.S., if every customer did what they were supposed to, Amazon wouldn't have an advantage. Actually, it would have a disadvantage, because remembering to fill out the "use tax" form and calculate and send out your "use tax" payment every time you shop at Amazon is more of a pain than just being charged sales tax at the point of purchase. But customers don't do what they're supposed to, and states that have "use tax" haven't really enforced payment, as far as I know.
ReplyDeleteI'm not familiar with that "use tax" rule, Library Girl and don't believe we have such a thing in Texas. It sounds a little like Europe's "value added" tax concept. But, as you say, getting people to voluntarily pay more tax is just never going to happen.
ReplyDeleteActually, Texas does have a use tax. I found that out when I was reading about Amazon not wanting to pay the sales taxes Texas was trying to get it to pay, back when Amazon had that distribution center in Dallas. A blog I follow mentioned that people supporting Amazon's attempts not to pay should consider that the state could simply ask all Texas Amazon customers to pay the use taxes they haven't been paying, so I started checking up on it, because I had no idea what a use tax was or if what the blogger was saying was true.
ReplyDeleteSee this URL: http://www.window.state.tx.us/taxinfo/use/
I'm guessing the reason why Texas went after Amazon is because it's easier to force one corporation to do something than to go after lots and lots of individuals. Plus, they'd have needed Amazon's Texas sales data (other states, such as Colorado, do require that Amazon send them such data - I think they have to do it for anyone who purchases more than $500 worth of goods in a year, although I don't know that Colorado has actually gone after anyone).
Interesting. It must be one of those taxes that are on the books but no one tries to enforce. Perhaps you're right and the law is just too cumbersome and expensive to enforce, so they don't.
ReplyDeleteI do remember that situation with Amazon here in Texas. Didn't something similar just happen in California but Amazon threatened to pull out of the state if they had to pay the taxes there? I vaguely remember something about California giving them some kind of a tax compromise break...such as Amazon pays nothing and keeps jobs there.
I could be completely mistaken, however.
I don't know, but then it's only in the past two or three years that I started paying more attention to company/publishing/book news. I vaguely remember something about Amazon arranging a delay in when they would have to pay California (or some other state? can't remember), but I could be wrong.
ReplyDeleteReally, if Amazon suddenly started charging me sales tax on my purchases, I'd probably gripe about it, but I'd still buy from them - their prices would still be lower than any place I shop at locally, and their selection would definitely be better.