Second, as far as I can tell, if you wanted to find the real political story here (since this is a story with both tech and political overtones) is that the big box retailers are looking to put the squeeze on their competition, and using government to do so.
I think this is a fascinating issue for many reasons, but specifically for this one -- the fact of the matter is that big box retailers like Target are at a huge competitive disadvantage when competing against internet-only retailers like Amazon because of state sales tax laws, so it makes perfect sense that the big box retailers would say to the government: "Hey, this company found a loophole in your rules that I can't exploit!"
Also interesting is the fact that the case that Amazon always leans on, Quill v. North Dakota, took place in 1992 -- before the internet era even began. Yet another instance of the government not keeping up with this whole "internet" thing and changing laws to reflect that reality.
> Also interesting is the fact that the case that Amazon always leans on, Quill v. North Dakota, took place in 1992 -- before the internet era even began. Yet another instance of the government not keeping up with this whole "internet" thing and changing laws to reflect that reality.
What essential differences do you see between Quill (a mail order company with a physical catalog) and Amazon? Suppose that Quill had distributed its catalog via CD - would that make a difference?
The only thing different between the "mail order age" and the internet age is the relative amount of commerce occuring via the latter. That doesn't come into play wrt whether states can "ask" for help collecting taxes from their residents.
Which reminds me - states that have no sales tax often have stores next to their border with states that do have sales tax. Residents of the states with sales tax will cross those borders to buy things at said stores, thus avoiding the tax.
Should those stores be obligated to collect tax for the sales tax states? If not, why doesn't the same rule apply to mail order and the internet?
Feel free to assume that said stores will mail goods post-sale that weren't in stock at time of purchase.
Residents of the states with sales tax will cross those borders to buy things at said stores, thus avoiding the tax.
NY/NJ
Should those stores be obligated to collect tax for the sales tax states? If not, why doesn't the same rule apply to mail order and the internet?
In the case of NY, if you buy goods out of state you are expected to pay NY state sales tax on them.
Growing up in Washington Heights, a few blocks from the George Washington Bridge, people would regularly grab the bus over to one of the Jersey malls for various items on which there was either no state sales tax or a much lower tax. Clothing was a big item. Also gas was always cheaper, for the few I knew who had cars.
Many years later I learned that New York State expected its residents to duly report these purchase and pay NY State use tax on these out-of-state purchases.
I'm sure that happened a lot.
But it's an interesting point. If Amazon is not collecting sales tax based on the customers state of residence (a la NJ and NY) then the state should be going after the customer for the use tax (something Washington state has done for purchases made from Oregon-based stores).
The only thing different between the "mail order age" and the internet age is the relative amount of commerce occuring via the latter.
You're absolutely right that the main difference is the astronomical difference in scale, but you're ignoring the fact that internet sales are entirely on-demand, whereas mail order sales still require a physical catalog to order from. This may not sound like a significant difference, but the instant-on internet fundamentally altered the way the public buys the majority of its goods in a way that mail order businesses never could. This is what I meant when I said that the government didn't change its laws to reflect the reality of the internet, and it's why Quill v. North Dakota isn't a great example of today's reality.
Personally, I think the problem is a simple one to solve by doing what Illinois (where I live) did this past year with its tax form -- basically, you had two options: you could either a) calculate what you actually paid in sales taxes via receipts and whatnot, or b) divide your income by some small percentage, and choose the higher of either that number or $50. (Or something like that.) The kicker was this instruction -- Do not leave this blank. (The irony, of course, is that Illinois passed an "Amazon tax" law of its own earlier this year.) Since no one wants to be audited, I'm sure the rate of compliance was pretty high.
> You're absolutely right that the main difference is the astronomical difference in scale, but you're ignoring the fact that internet sales are entirely on-demand,
Huh? How is ordering something from a catalog not "on-demand"?
> whereas mail order sales still require a physical catalog to order from. This may not sound like a significant difference, but the instant-on internet fundamentally altered the way the public buys the majority of its goods in a way that mail order businesses never could.
I don't buy it. I grew up during the "catalog" days. Every house had several catalogs for various types of items, collectively covering pretty much everything that said household would buy.
During my time, almost all of these catalogs had 800 numbers so one could order instantly. That said, during earlier times, depending on where you lived, sending in an order form was no big deal because there often wasn't a local supplier.
Remote commerce is not all that new. Heck, folks even bought houses via mail-order.
In other news, boomers, hippies, yuppies, gen X etc did not invent any sex acts either.
The highest tax on there can't account for the huge markups I see in stores. The tax would be less than shipping on everything I've ordered. Ordering online is still cheaper if you add a 10% sales tax to the shipping cost.
I think this is a fascinating issue for many reasons, but specifically for this one -- the fact of the matter is that big box retailers like Target are at a huge competitive disadvantage when competing against internet-only retailers like Amazon because of state sales tax laws, so it makes perfect sense that the big box retailers would say to the government: "Hey, this company found a loophole in your rules that I can't exploit!"
Also interesting is the fact that the case that Amazon always leans on, Quill v. North Dakota, took place in 1992 -- before the internet era even began. Yet another instance of the government not keeping up with this whole "internet" thing and changing laws to reflect that reality.