Slog Tipper Joe wants to make sure that we see this good MSNBC article on the internet and state sales tax. Joe says, “A really good point is made within, love it or hate it: the tax loophole gives online retailers very often a pricing advantage over local shops.”
“The Internet retailer, when they’re not collecting that sales tax, they’ve got a 5 percent advantage,” said George C. Peyton, vice president of the Virginia Retailers Federation, which is backing an Amazon law in Virginia.
For Amazon and other online outfits, “it’s almost like having a sales tax holiday every day,” Peyton said.
There’s a sidebar listing the 12 states that are considering making e-retailers pay state sales tax. Washington is not on that list.
No shit. And in the case of consumer electronics, Amazon and other online retailers are already given better pricing that small shops. When will people finally realize that cheapest is not always best?
Often only if you get free shipping. Shipping costs often make avoiding sales taxes a wash, or a slightly worse deal.
One thing the small local shops really have a hard time beating is inventory. I believe in spending my money with local businesses, but I often can’t find what I’m looking for–once they say they can order it for me, I’m online doing it for myself.
Rather, when will Washington add itself to the list of states that make e-retailers pay sales tax?
Should we in Seattle consider Amazon a local shop?
Or maybe we could just do away with “regressive sales taxes,” and then it wouldn’t be an issue.
BTW, Washington residents already pay sales tax on orders from Amazon, since they’re based here. So other “e-tailers” kind of have an advantage over Amazon when it comes to WA residents.
That competitive advantage- arguable in many cases considering shipping costs and existing taxes (yes we pay tax for WA based ecommerce)- has helped to create an industry that is an alternative to the retail shop that probably employs just as many people. I don’t know what @1 means by his last sentence, I prefer ecommerce to physical retail shops.
People in Washington pay sales tax when ordering from Amazon.
States taxing interstate sales is unconstitutional.
@7, oh really?
Are you familiar with the Washington State “use tax”, which you are legally obligated to pay on every single one of those supposedly tax-free internet purchases? If you bring it into the state, by any means at all, you owe the tax, and if you don’t pay it (which no one ever does) you’re breaking the law. The perfectly constitutional law.
#1 “When will people finally realize that cheapest is not always best?”
Prolly about 3 years after all the management has moved on and the c# app from Pondicherry is still just a XML spec.
Exactly, Fnarf. Nobody pays use tax.
My “cheapest is not always best” comment was a little premature, which is why I followed up with my comment at #3.
Here’s my real beef – Where I work, folks come in, fondle the goods and suck our time for two hours, then leave empty handed to buy on Amazon. They are confident of their online purchase because they’ve leaned on the expertise and inventory of a local store. A local store that, along with jobs it provides, won’t be around much longer if we don’t start making it a little bit harder for small businesses to be hosed by the likes of Amazon.
The “price advantage” argument is a strawman. If online retailers automatically have such an advantage over physical stores, why don’t local stores open an e-store on Amazon and take a part of the pie? Because it’s not actually the case.
The problem is more akin to online stores being a virtual Wal Mart that blankets the US, forcing smaller retailers to compete with a business that’s much larger and more efficient.
They can’t compete on price, so they have to find other ways to “compete”, like trying to force online retailers to keep track of the patchwork of taxes in the US when it’s really supposed to be the consumer that pays by declaring it when they pay their taxes every year.
Local retailers who can’t compete with online stores should adapt or die; go into a segment that can’t be commoditized (there will never be an online fresh produce store) or make the difference up with service. If price is your only differentiator, you’re doomed anyway.
As for the impact on state budgets; online retailers who have a presence in the state they’re selling in do charge taxes on the goods they sell. States hurting for revenue should enforce existing sales tax laws for the population of their state instead of trying to force a company that has no presence to comply with laws created by governments that don’t represent them.
Should have stated: (there will never be an online INTERSTATE fresh produce store). PeaPod, etc. already charge taxes.
it’s not just online stuff…. the company I work for is local and, because of it’s corporate status, will be subject to the sales tax, but it’s big national brand competitors won’t…. I’m all for an income tax that will get more for the rich, but not at the price of mid level companies being put at a disadvantage to big mega corps…..
@11 uhhhhh- not that I disagree with anything ELSE you wrote, but there already IS a “Fresh Produce” online retailer. FreshDirect. I used it in college when I was too busy/lazy to walk the block and a half to the Associated down the street. And the produce was always just as good, if not better, than the local grocery store.
Shhh, just saw your correction- though that is also somewhat false. Hell- most of the produce at my local grocery is from out of state. Though I get what you are coming from- I can’t remember if I was ever taxed for it but it does seem likely.
You’re not serious about support local retail unless you’re serious about removing that absurd sales tax loophole for e-tailers. Simple as that…
@11 “Local retailers who can’t compete with online stores should adapt or die; go into a segment that can’t be commoditized (there will never be an online fresh produce store) or make the difference up with service. If price is your only differentiator, you’re doomed anyway. “
you obviously are not a local retailer.
is it that simple to “go into a different segment”? did you read that somewhere?
and “make it up with service”? that gets back to what @10 said: our “service” has turned into becoming a showroom for people to confirm fit and feel.
the truth is that shopping, for many people in the US, has changed. the qualities that a past generation appreciated in their local pharmacist, shoe salesman, bookseller – you name it – are not sought after by the current pool of buyers. and less so every year.
the tax issue is certainly worth talking about, but it’s a smaller issue than the very nature of retailing.
I would imagine that WA State doesn’t pursue this to make Amazon.com happy and keep them in the state. Amazon PAYS sales tax in WA State, the only state where it does because it’s HQed here, so the state gets that money and in return, WA State keeps quiet about clamoring for a net sales tax…also, Microsoft wouldn’t like it either.