Hey, anyone know when Amazon started charging Sales Tax on Kindle books?
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Comments
Depends on the state and country
The feds removed the protection the internet had from state tax law about five years ago. Was only a matter of time.
Hugs,
Erin
= Give everyone the benefit of the doubt because certainty is a fragile thing that can be shattered by one overlooked fact.
consider yourself lucky
Here in the UK, we pay VAT on Kindle/epub but not tax on the printed/dead tree edition.
amazon also charge you based upon where your CC billing address is. If I'm in the USA and buy something from Amazon.com I still get charged UK VAT if I use my UK Credit Card. If I use my Cash Card that is in USD I don't get charged.
It is all a rip off/scam. How do you know that the tax collector (amazon) is actually passing it onto the correct statetax collector?
penalties and damage to the company reputation
"It is all a rip off/scam. How do you know that the tax collector (amazon) is actually passing it onto the correct statetax collector?"
A small company might try to get away with that kind of tax cheating. I doubt that Amazon would. It would get flagged in an audit, and the penalties and damage to the company reputation would be huge.
Kris
{I leave a trail of Kudos as I browse the site. Be careful where you step!}
Small or Large
I'm not sure I agree with your logic. Many large companies cheat on taxes, because they're willing to take the risk they won't be caught. I attended a seminar a few years ago where a ex-IRS agent recommended "cheating" until you'e caught because you can then negotiate with the IRS and pay far less than the suckers who don't.
I walked out of that seminar.
Angela Rasch (Jill M I)
Sales taxes are one that the
Sales taxes are one that the states (at least Texas) get really nasty about. You can find your business shut down if the state thinks you've been playing games with the sales tax. The fiddling that goes on is, for example, what Wal-Mart does. In one area that's NOT in the city of Houston limits, they charge 8.25% sales tax, instead of the 7.25% that's supposed to be charged there. That means one of two things. Either the unincorporated area is paying Houston sales tax, or Wal-Mart is pocketing that extra 1%. They claim it's because of the 'zone' that the Wally world is in - I think they're just lazy AND greedy.
I'll get a life when it's proven and substantiated to be better than what I'm currently experiencing.
Larger the company, more ways to cheat.
Lets say big company X sold 1m of merchandize in the state S. But, instead of 100k of tax paid to state S only 10k of tax. How the state S is to prove that company X actually sold 1m of merchandize in the state? Get statements from 100000 of customers? And even then company X has 90k to pay to lawyers to prove that company X had done nothing illegal...
Believe me, they'd get caught
Believe me, they'd get caught. For one thing, if they claim they only sold 100,000 of merchandise in that state, they'd have to fudge their income records as well. It's a lot harder to fudge things going in and out, because you not only have to supply how _much_ you sold, if you're a large company, you include how _many_ you sold. How much you bought is often a matter of record because of the shippers.
I'll get a life when it's proven and substantiated to be better than what I'm currently experiencing.
Amazon ...
... and other multi-nationals (Starbucks, PayPal, banks etc) have very effective means of dodging taxes by using devices like making sure their profits are 'earned' in off shore tax havens rather than where they actually do business. Amazon and Starbucks in particular are notorious for paying very little tax in the UK.
Sadly, many of the tax havens have British connections - eg Virgin Islands.
We've always paid VAT (value added tax) on virtual books (including Amazon) but not on paper ones in the UK.
Robi
My point was
That Amazon illegally collects VAT on a purchase that was made outside the EU because I used my UK registered Credit card. If I am in the USA physically when I make the purchase then No VAT at UK rates should be payable. If I rent a Motel Room in say Ely, Nevada using the same CC I pay local taxes. No UK VAT.
Amazon assumes that I am in the EU because of the Card Number/Account. It does not take into consideration that people travel and that electronic delivery of goods can be made anywhere in the world and not just to the state/country of the CC holder.
Samantha
I think you'll find that
I think you'll find that Amazon has been _told_ how to collect sales tax based on the purchasing card's billing and shipping address. Electronic delivery doesn't matter in that case. They do the same here - if I buy with my card, they bill me sales tax based on where my statement shows up, even though that's not in the same tax area as where I'm living. If you want to complain about it, complain to your bank and the person who wrote your VAT collection laws.
I'll get a life when it's proven and substantiated to be better than what I'm currently experiencing.
Amazon didn't actually have
Amazon didn't actually have the protection anyway. Whereever they had a physical location (shipping terminal, etc), they were required to collect sales tax for that state.
So, since they have a shipping location in the Woodlands (TX), they have to collect sales tax for anywhere in Texas. That's still on the books, and the Feds are still enforcing it. If the state governors ever got together and hammered out a collectively agreed on method for collecting _each other's_ sales tax, we'd pay sales tax for any out of state transaction.
Interesting thing. They all want to collect sales tax, but don't want any other state collecting anything from them (Especially California), so, nothing gets done.
The reason for the ruling was a fair one. It's unfair to expect a leather goods manufacturer in Dead Cow, Montana, to know the sales tax codes for every location in the country (such as Pinehurst, TX). So under the Commerce clause, it was declared that sales tax cannot be collected from someone who can't be expected to know what to collect, or who to pay it towards.
I'll get a life when it's proven and substantiated to be better than what I'm currently experiencing.
Protection and agreements
The federal protection was simply a policy that if any state tried to collect taxes on internet transactions that the full force of federal disapproval would be brought against such an action. A few states wanted to tax everything in sight but the threat of federal reaction kept them in check. All real world examples are too complicated to get into here but that is essentially what it amounted to. It was all just agreements between Congress, federal regulators, the President and their state counterparts that letting the internet grow for a bit without taxation would be good for the economy.
The problem with sales tax and income tax agreements between the states is that some states do not charge one or the other of them so it is really hard to work out a reciprocal arrangement that applies everywhere and individual agreements are almost as hard. As you say, other states do not want to collect money that goes to one of the rich states like CA, NY, FL,or TX.
I used to be a tax programmer back in the 1990s. :)
Hugs,
Erin
= Give everyone the benefit of the doubt because certainty is a fragile thing that can be shattered by one overlooked fact.
Yep...
In Indiana, where I live, they didn't start charging sales tax on my purchases until they built their distribution warehouse near Indianapolis.
~And so it goes...
The problem with that is
Not every state has a sales tax. Delaware, Montana, Oregon, New Hampshire and Alaska. Those five states would have to set up a system to collect other states sales taxes, hire people, and spend more of their money, while not getting anything in return.
Chicago and C(r)ook County are horrible on taxes. If you live there and buy stuff outside the city or county, they will send you a bill for the sales taxes you would have paid inside their borders. Buy a $25,000 car in a neighboring county, expect a bill for $437.50 from Cook County and another $562.50 from Chicago. So yeah another $1000 on that car in Chicago.
For that leather good's manufacturer in Dead Cow, Montana it get's worse, because he has to not only know every State, County, and City tax, he also has to know where the purchaser lives. The city where my address is has a city sales tax, but I don't live in the city so I wouldn't pay that tax. How is he supposed to know that.
That's the whole point. All
That's the whole point. All those sales tax collecting states would have to agree on a common collections model. That way, if the guy in Dead Cow Montana sells to someone in NoSalesTaxHere, New Hampshire, he does NOT collect a sales tax. If he sells that same item to Texas, he can look up the delivery address (which is what they base the sales tax on - not on the final destination, at least in Texas), get the tax amount, and make a note of it. (7.25% in Harris County, 8.25% in the city of Houston. 6.75% in Grimes county, IIRC)
I'll get a life when it's proven and substantiated to be better than what I'm currently experiencing.
And we thought ...
... the EU was complicated :)
Robi