Amazon Caves to Sales Tax Collectors

Mandeville, LA – Exclusive Transcript – There are seven or eight states that they are talking to to cut sales tax deals with, where Amazon will collect the sales tax. If I have to pay the sales tax of California when I shop in Louisiana, and one of the principle advantages I have at Amazon is that I don’t pay the sales tax, why would I shop there?  I’ll just go down to the local store and get it.  With Amazon caving in on the sales tax, this just paves the way for every other big company, including little companies like mine, for leviathan to come in and say, “Here’s what we’ll do, we’ll have a one-size-fits-all national sales tax, collected at the point of sale and then remitted to the federal government by retailers.”  Oh, that’s exactly what we need, yet one more accounting responsibility that we have to go through every day, every week, every month and every year. Check out today’s transcript for more…

Begin Mike Church Show Transcript

Mike:  Here’s the headline: “Amazon cuts sales tax deals.”  Amazon.com has been fighting state after state after state and telling them, “We’re not collecting sales taxes for you.  Screw you.”  Then when a state tries to pass a sales tax on Amazon, Amazon disassociates from any customers in that state.  Well, it is now decided that it must either be at the table or it’s on the menu, as the old saying goes, and it’s now playing ball.  The end of internet freedom is nigh.  Amazon has mailed it in.  They’ve cut the deals now with — if you go to the Politico story, I think there are eight states they’ve cut deals with so far.  There are seven or eight other states that they are talking to to cut sales tax deals with, where Amazon will collect the sales tax.If I have to pay the sales tax of California when I shop in Louisiana, and one of the principle advantages I have at Amazon is that I don’t pay the sales tax, why would I shop there?  I’ll just go down to the local store and get it.  With Amazon caving in on the sales tax, this just paves the way for every other big company, including little companies like mine, because now I’m going to have to do it, I would assume, or I’m going to start receiving letters from attorneys general in other states.  That will then pave the way for leviathan to come in and say, [mocking] “Here’s what we’ll do, we’ll have a one-size-fits-all national sales tax, collected at the point of sale and then remitted to the federal government by retailers.”  Oh, that’s exactly what we need, yet one more accounting responsibility that we have to go through every day, every week, every month and every year.

Eric White:  Mike, I liked what you said in the first hour also, of freedom of internet.  We could go all day about saying how they’ll use it, how they’ll regulate speech on the internet now.  The only way small businesses are really able to even compete with bigger companies is through online purchasing and being able to have websites.  You were saying how it’s going to cost and be a lot more of a headache to get a website up and going if things like this continue.

Mike:  Not only is it going to be a headache to get it going; it’s going to be a headache to stay legal.  If the general government doesn’t come in and impose a federal sales tax, you’re going to have to have 50, or whatever states decide to do this, 50 separate forms.  If a state were smart, for the businesses that are located inside the state, they’d say, “Sales tax holiday.  We want you to sell all kinds of stuff and not collect the sales tax.  We’re willing to have the actual physical capital come into our state.”  Of course, states being filled with politicians, politicians being greedy as they always shall be, good luck with that pipedream.  This is just bad news.  This is not good.  I’m surprised.  Amazon must have gotten wind that some hammer was getting ready to drop on them.  Jason in North Carolina, hello.  You’re on the Mike Church Show.  How you doing?

Caller Jason:  Hey, Mike, it’s great to talk to you.  I’d just like to comment on your Amazon discussion and how it just seems better to [unintelligible] to the law on small business.  My family and I run a small business here in the mountains in Western NC.  Amazon can afford all the computer technology and regulations to pay those sales taxes, while these small business owners like yourself that do a lot of business with all 50 states will incur huge amounts of money to comply with these new regulations. {sidebar id=56}

Mike:  What Amazon has done is surrender everyone below them to the tax man in the states that they’ve surrendered to, meaning it was a very shrewd move for them.  Once again, you see that government is going to be used to jerry-rig the market in favor of one online retailer and at the expense of others.  Amazon and its $12 billion in revenue, I would imagine, could afford all manner of accountants, bookkeepers, tax collectors, taxpayers, tax auditors and what have you.  Can you?

Caller Jason:  No.  Luckily, we’re just a local small business and we’re a service-based industry.  Personally, just in that industry, we pay a large amount of taxes and the regulations, workers’ compensation, we pay for two years of it, and we have the workers not there to actually do work but we’re still paying for that worker.  The reason prices are so high these days is because we have to pass that cost along to our customers.  If we didn’t, we wouldn’t be in business.

Mike:  Well, not only do you have to pass the cost onto your — I don’t know that you can, though, pass the cost onto your customer.  That’s what’s so tragic about this.  What I’m talking about is the news story today, here’s the headline from the Politico.com: “Amazon cuts sales tax deals.”

[reading]
Amazon may have just upended Congress — to the chagrin of those pushing for a federal online sales tax bill.  The online retail company last week inked deals with Texas and Nevada to begin collecting sales taxes on purchases.  The company has brokered seven such agreements in recent months while bills to standardize . . .
[end reading]

Mike:  It goes on to say there are eight other deals.  That would bring the total to 15.  The reason that I bemoan this is because states have been going after and lusting after online sales tax revenue, anything they can do to get more money so that they can spend it.  It’s only a matter of time, if Texas is now colleting rom Amazon, that Texas comes banging on my door and says, “You sold Spirit of ’76 DVDs to Dwayne Stovall of Houston, Texas and Stovall didn’t pay a sales tax when he should have.  Now we’re coming to collect it from you.”  That’s one of the other things, turning the records over of past sales so that, after the fact, sales taxes can be assessed.  This is awful.  If you’re a small-business man and you’re doing business online, this is awful for you.
To be fair, Apple Computer has always collected the sales tax.  They did it voluntarily because they seem to be rather friendly with Big Brother, with leviathan.  I know because I buy a lot of stuff from the Apple Store.  They’ll always ask you what city you’re in.  [mocking] “You inside or outside the parish lines of St. Tammy?”  “I’m inside.”  “Well, you gotta render to the Sheriff of Nottingham that which is his.”  This just turns into an absolutely unbearable accounting nightmare for the small business.  This is awful, awful news.

I bet many people are going, [mocking] “Come on, man, you’re blowing this out of proportion.”  You think it won’t happen?  Of course then, if you don’t collect the tax, you run the risk of being discovered as not collecting it, and then being responsible because a law in another state may say we have warrants out for people who didn’t collect the sales taxes and here are the businesses.  Whether or not we get extradited — it’s just a mess.  In this instance, we may be begging the federal government to say implement a national sales tax on all online sales and we’ll collect it.  Now the competitive advantage of shopping online and not paying sales taxes evaporates.
End Mike Church Show Transcript