
Amazon to collect sales tax nationwide starting April 1st - Urgo
http://www.cnbc.com/2017/03/24/the-holiday-is-over-amazon-will-collect-sales-taxes-nationwide-on-april-1.html
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bflesch
It's incredible how things like collecting sales tax is up for discussion with
some US states. If you don't collect VAT anywhere in Europe you get severely
punished by authorities. They take their 20% cut from every sale very
seriously.

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soneil
It's .. complicated. It's not so much whether tax should be collected, it's
where and who by.

I can only speak for Michigan, the only state I've lived in, but it goes
something like;

* Tax on interstate purchases (where the buyer and vendor are physically in different states) is owed in the state the buyer is physically in.

* Tax is not (was not?) collected at the point of sale.

* Buyer should declare (significant?) purchases on their (state) tax returns.

So the theory is that if I go into a shop and purchase something for $100, I
pay $106 at the point of sale. If I purchase the same item from an out-of-
state vendor online, I pay $100 at the point of sale, and owe the outstanding
$6 on my state taxes.

As you can imagine, this is near-impossible to audit (hands up anyone who's
ever declared those purchases?). There's been resistance to change nominally
because taxes are very difficult to calculate (the same purchase can be
covered by state, county and municipal taxes - it's not just a list of 50
numbers), but realistically because online vendors have enjoyed making it
Someone Else's problem, with the lower prices also working in their favour (on
significant, 4-digit purchases, whether the vendor had a presence in Michigan
would factor into which vendor I chose).

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MagnumOpus
> this is near-impossible to audit

This is only hard to audit because the Michigan tax authorities are criminally
incompetent (or just criminal full stop).

Subpoena Amazon (and jet.com, ebuyer, newegg) sales delivered to Michigan
addresses, compare address list with the list of addresses that self-declared
sales tax for out-of-state purchases, send automatic back tax and penalty
notice to all all addresses which didn't. None of these steps are hard, it
will increase compliance millionfold and bring it hundreds of millions in
revenue.

~~~
brianwawok
My understanding of why this is all so tricky.. the Constitution specially
gives only the federal govetnment the right to regulate interstate commerce.
So Michigan could not force the records from Amazon, the federal government
would need to.

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hn_throwaway_99
So crush the competition by being able to underprice for years by not paying
sales tax, then once you've won, get credit for being a good corporate citizen
by playing nice again.

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tzs
State sales tax is a pain in the ass. I do some work for a place that only has
a physical presence in the state of Washington, so collects sales tax for
online sales to Washington residents.

Online sales tax in Washington is based on the buyer's location, not the
seller's location. There are currently 25 different sales tax rates in effect
here. So for each sale to a Washington resident we have to determine which of
those 25 rates applies.

5 digit zip code is not sufficient to determine the tax rate for a location. A
given zip code region can overlap different tax regions that have different
rates. There is one zip code that includes 5 different sales tax rates, and
several that include 4. A zip+4 code _is_ sufficient, but (1) many people do
not know their zip+4, and (2) I don't think there is any guarantee that a
zip+4 won't cross a tax region boundary.

The way you are _supposed_ to handle this is to determine the rate based on
the street address. You can download from a Washington state government
website[1] 39 files (one per county) that contain lists of streets and address
ranges and tell which tax location each falls under. A typical record from one
of these files looks like this:

    
    
      100,198,E,CASECO LN,WA,98366,4700,Q22017,1802,N,Kitsap PTBA,
    

That particular record says that it covers addresses in the range [100, 198],
on the even address side of the street named "Caseco LN", in the state of WA,
and those addresses have zip code 98366-4700, the record is valid for quarter
2 of 2017, the location code is 1802, those addresses have Regional Sound
Transit indicator N, and in the Kitsap PTBA (Public Transit Benefit Area). The
empty field on the end is the name of the Community Empowerment Zone. The
important part for tax purposes is the location code (1802), for those are the
codes that identify tax regions.

If you use that you've got to deal with all the different ways people might
write their street address. For instance, if there is a "Martin Luther King
Blvd", you will find people who write it as "MLK Blvd", and probably some who
write it as "MLKing Blvd", and some who will suffix it with "St" or "Ave"
instead of "Blvd".

What we do is simplify this a bit, and just go by 5 digit zip code. The rate
we collect is the rate of the highest rate location that overlaps that zip
code. That way we are sure to never under collect (and more importantly, never
under pay to the state).

Our only physical presence is in Washington, so we only have to do this for
Washington. I cannot imagine how painful it would be if we had to do this for
several states, let alone if we had to do it for 50 states.

[1]
[http://dor.wa.gov/content/FindTaxesAndRates/SalesAndUseTaxRa...](http://dor.wa.gov/content/FindTaxesAndRates/SalesAndUseTaxRates/stdownloads.aspx)

~~~
syshum
This exactly is why I am glad the US Constitution forbids states from charging
interstate taxes, and why I oppose all of the efforts by congress to allow
states to collect interstate sales taxes.

My State 1 tax, for the entire state, and outside an few industry specific
taxes (hotels, rental cars ) there is only 1 sales tax to collect. We do not
have sales taxes at the city or county level those are forbidden at the state
level.

makes it so much simpler

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JaggedJax
This doesn't say if they will collect taxes for Merchant fulfilled orders, and
I suspect by default they still won't. Their current process for collecting
taxes requires the merchant to fill out a long detailed form of all the state
and local taxes for everywhere you want to collect tax. It's ridiculous
because they already know this information and are just making it difficult so
less merchant's collect taxes. Last time I tried if you saved the form when
not 100% complete it would silently delete all your work, so good luck if you
need to look up a single thing and come back to it.

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innocentoldguy
I'm always suspicious of things happening on April 1st.

Regarding Amazon collecting taxes, they started doing it in my state earlier
this year, and I've found that I hardly buy anything from Amazon anymore.

~~~
chrsstrm
>I'm always suspicious of things happening on April 1st.

It's not like that is the first day of a new fiscal quarter...

And for those who remember that far back, Gmail was launched on the 1st of
April.

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bubblesocks
A lot of fake news is propagated on April 1st each year, particularly in the
tech industry, so there is justifiable reason to view April 1st announcements
with a bit of skepticism.

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hdbdbeduch
I expect that Amazon will now start lobbying for a federal law to enforce this
on all retailers, as I have shifted a lot of dollars from Amazon to B&H
because Amazon now collects CA tax.

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DrScump
TL;DR: "Tax-free shopping will be over as of next month in Hawaii, Idaho,
Maine and New Mexico, the four remaining holdouts."

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free2rhyme214
Thank you. I'd love a TL;DR for every news article please ;)

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dang
We detached this subthread from
[https://news.ycombinator.com/item?id=13953907](https://news.ycombinator.com/item?id=13953907)
and marked it off-topic.

~~~
free2rhyme214
Thanks

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techwraith
April fools?

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justonepost
Lol: "Amazon's decision to collect and remit sales tax to the state of Maine
is an important first step in leveling the playing field,"

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Gaelan
Why? This came across as quite reasonable.

