AMZN Brutally Assaulted by CA

Discussion in 'Wall St. News' started by shortie, Jun 29, 2011.


    Amazon battles California sales tax

    By Barney Jopson in New York and Matthew Garrahan in Los Angeles

    Amazon, the world’s biggest internet retailer, has threatened to sever its ties with online advertisers in California in response to the state’s new budget, which requires internet retailers to collect sales tax from shoppers.

    The stark threat over a move Amazon described as “unconstitutional and counter-productive” comes as California grapples with a $9.6bn deficit.

    Amazon said it would cut its ties as soon as the measure became effective.

    The move in the most populous US state would be Amazon’s boldest yet in its fight against state efforts to collect sales tax from online shoppers who, in most cases, have not had to pay the levy since the birth of e-commerce.

    States such as California see the internet sales tax as a means of narrowing their budget deficits. They are supported by “big box” retailers such as Walmart and Home Depot, which complain that online rivals gain an unfair price advantage from a tax loophole.
  2. California is a brutal state from a sales tax perspective.
    Out of state retailers who utilize a drop supplier located in California are required to collect and remit sales tax.

    Amazon has cut some impressive deals with states on the threat of walk out. South Carolina gave them a nice package including drafting special legislation redefining nexus for Amazon on top of free land, $3500 tax credit per employee, relief from collecting any sales tax.

    Seems like every business is pitting states against one another having them playing russian roulette and cut each others throats for the best deal. In the end the states still can't compete against off shore free trade zones.
  3. I hate sales tax. But at this point with the state bugets, that's just part of the new normal. The whole internet being exempt from sales tax has been a bit like the wild west, we all knew it wouldn't last forever.
  4. Eight


    I love sales tax, every criminal and welfare bum has to pay his/her taxes instead of "progressive" taxpayers supporting them and their activities... check out any ghetto, welfare is a government subsidy for crime! And the left keeps insisting that they are the intelligent ones! LOL

    OTOH I don't want to pay any taxes at all of course, obviously the best government is the one that taxes the other guy but not me :)

    California has a far left legislature and has bullied most industries out of the state. Aerospace left for greener shores back east, many manufacturing industries are gone of course and not due to offshore work entirely, the Furniture manufacturing industry has been somewhat displaced by Mexicans that build stuff in their garages.. Decades ago California put American Motors out of business singlehandedly. They raised the fuel standards, AMC was struggling and without California's market they had to fold their hand...

    I like it that Amazon is just raising the middle digit to California's legislators, I do it every chance I get but that's just me.. Amazon serves a world market, maybe California is not such a large part of their business that it matters all that much...

    I was riding along in a car with a friend once, the news was on the radio, this was decades ago.. we heard that the legislature had passed some pro-queer thing, it was a milestone type thingy... my friend is very religious, so he says "that's it, it's over for California" because he knows that God won't honor a state that doesn't honor God. Since then Aerospace left, industry in general fled, Mexicans have taken over nearly everything from the local PTO to the Legislature and the economy has been eroding ever since... it would be funny if Amazon would stop doing business in California! A bold move indeed...
  5. Banjo


  6. I never understood why mail order/online sales are exempt from sales/consumption taxes - provides an unfair advantage over local merchants.
  7. Eight


    True, it takes the Public Sector DECADES to respond to new technology and new turns of events though...
  8. 377OHMS


    Amazon kicked California's ass 10-minutes after Governor Moonbeam signed the legislation into law.

    They fired every single affiliate in the state. So no sales tax, no income tax from the affiliates and no property taxes on the affiliates who own buildings, warehouses an must move out of state.

    California *lost* millions in revenue today the idiots. :D
  9. the stupid state is doomed. their desperation to squeeze every single cent is not a good sign.
  10. If every state does this though Amazon is the one that's fucked. Fine - move all the logistics offshore, see how new tariffs treat you.
    #10     Jun 30, 2011