We are no fans of Amazon here at The Rumpus. When we link to books we review, we link to small publisher websites or spdbooks.org or Powell’s. We’ve written about the online behemoth’s desire to avoid collecting sales taxes in California multiple times. The Daily Show’s John Oliver recently did a piece on how the California initiative process makes it harder for the state government to deal with fiscal crises and how Amazon is currently exploiting that process in an attempt to stop the state from forcing them to collect sales tax.
I want to emphasize that for a second–this isn’t a tax on Amazon. This is sales tax, which you would pay if you went into any store in California and purchased something. Amazon doesn’t want to collect it because it would lessen the competitive advantage they currently hold over local retailers.
But Amazon isn’t satisfied with that. Nope, they want to run local stores completely out of business, it seems. They have announced that they “will pay customers $5 to go into a local store, scan an item, walk out, and buy the same item on Amazon.” Gawker responds with “By all means use Amazon – they have amazing selection! – but there’s no need to be a tacky jerk to your neighborhood store in the process. Unless that store is a Wal Mart, Target, or American Apparel, in which case go to town (by which we mean, go out of town).” I don’t know. I get the sentiment–pit the big retailers against each other–but really, I don’t think I can bring myself to do it. Amazon can bite me.
22 responses
This is just so nasty, I wish they didn’t sell my book. Whoever thought up that marketing idea needs a hard dose of life. Screw those guys, I don’t intend to use them again.
UGH! Amen, Brian. Thank you – sharing this article wherever I can.
I use Amazon’s website just to keep an on-going wish list. I always order my books from Powell’s (hometown) or Park Road Books here in Charlotte.
Now I feel bad for even keeping a wish list with them. Jerks.
Not to play devil’s adovcate here, but how is this any different than the big box stores that tell you to get scans from competitors and give you discounts so they can have the lowest price?
The sales tax thing is done by as many companies as possible — not just Amazon.
But, however, this isn’t anything new. Electronic stores that want the lowest price do it all the time. You’ve heard the ads… lowest price, guaranteed, just show us proof we aren’t the lowest. And yes, they give deductions for those who prove they aren’t the lowest.
Same thing. Why is it fine for those companies to do it and not Amazon? Perhaps you should go rant at the stores that started the trends as well, just sayin’. This concept has been around longer than Amazon has existed.
Amazon lost my patronage when they announced their scheme of scanning product bar-codes in local stores to find it cheaper on Amazon. I know they will claim they are trying to save people money but that is some sneaky-ass back door customer snatching bullshit. It even made it to the official dick move page about a month ago. http://dkmvs.com/posts/353 Vote for it so that more people become aware of the dickishness of Amazon these days!
But RJ, in the scenario where two brick and mortar stores are competing for prices they are at least on a level playing field. Online vs. brick and mortar gives a severe advantage to the online competitor. They don’t have to pay for the infrastructure, personnel, etc. AND they don’t have to pay state sales tax! So who’s going to win 100% of the time in a price war? I have no problem with amazon as an online store, but telling it’s customers to go have a hands on feel of the products at local stores and then save a few bucks by buying it through Amazon is backhanded in my opinion.
I agree on some level with your view, but I also agree with RJ and feel that Amazon isn’t really competing with local shops so much as big box stores. And I would so much rather see Walmart and BestBuy go down than Amazon.
At least in my area, the small, local shops all carry unique merchandise that Amazon doesn’t carry.
The fact is that in the long run, online shopping for commodities is going to be the norm. It may take 30 years, or 10, but that’s the direction things are moving.
You’re right, RJ, it’s not very different. I do my best to avoid big box stores, as well. Sure, monopolies, paperless books, all-online purchasing and lack of actual human contact may be the way of the future, but that doesn’t mean I have to give in and contribute. If anything, I’d like to postpone such a dystopia. 🙂
It’s fair to criticize Amazon for fighting sales tax. Unfortunately the article overlooks that they quietly rolled out a taxing system in October for Marketplace sellers (the ones who don’t charge it still pay it out of pocket). It’s fair to criticize, but at least present it fairly. The article doesn’t mention that this isn’t ongoing competition, it’s a limited one-day promotion (like so many companies do this season) that only covers 5 specific categories, for a somewhat negligible amount. “The one-day promotion Dec. 10 will offer 5 percent, or up to $5”
It also doesn’t pay people to walk out without buying, they just have to physically be at a location on one day. How many people make a special trip just to save 5%, compared to ones already out looking to spend and browse. Who can say they won’t make alternative choices to buy unique items in store. Stuff sold online isn’t always available or cheap, and the best attraction stores have is a selection of things you can’t so easily browse online. Power to small stores, the article is just not well written. 🙂
If promoting an app is bad, maybe they should also be blamed for undermining physical books with ebooks- well, maybe, maybe not. Personally I spent 6 figures on physical books this year, and I’m not too worried about the technology making them worthless. I sell via Amazon, but I don’t work for them.
Hi again, folks…
I’m just going to go into a little bit of tax law here, or at least, tax law as it existed a few years ago when I worked for a web-based company in marketing.
How it used to work then is this: Sales Tax is only charged to people of the location _where the company is based_.
Amazon is not based in California. When I was in the business, sales tax was not charged to customers outside of the state where the company is based. So, if it follows this law, customers from Washington State would have to pay sales tax when shopping at Amazon, where customers from other states don’t have to pay sales tax. That is also why you’ll see notices stating customers in certain states have to pay sales tax.
California is one of the States that has extra harsh tax laws in regards to this seeing as they manage to run out of money in their budget, so they try to acquire taxes whenever possible.
Essentially, the rules were in place — to my understanding — to protect the consumer. Why, for example, should a customer from California have to pay Washington sales tax? The company is responsible for their federal taxes and their state taxes.
Once upon a time, if you hopped border of states and shopped in an area where sales tax was _higher_, you could return to your state, request a refund of the sales tax with proof of residency. You would then be required to pay your state their sales tax rate in exchange. I do not know if this general law still exists, however.
So, who is the bigger crook — Amazon, for protecting customers from paying state sales taxes to states they aren’t required to pay sales tax to… or California, for trying to get as much tax money as absolutely possible?
Just some food for thought. When I shop at online stores in Canada, I pay my federal tax. If the store is in my province, I pay my provincial tax. If it is not, I do not.
If Amazon were operating solely from a location in Washington, that law would apply. However, Amazon, while headquartered in WA, does business from a variety of owned fulfillment centers and subsidiaries located in a number of states. These include A2Z Development, located in Palo Alto, CA, Alexa, a web info service, in San Francisco, and Lab126, a Cupertino-based sector which created the Kindle. Amazon seems perfectly happy to be viewed as a California business when it comes to benefitting from state business & tech industry incentives but doesn’t want to be considered a CA business when it comes to taxes.
I’d have to look into it more, but I don’t quite understand the “out of state customers not paying sales tax.” Is this an exclusively online deal, or does it also apply to mail-order? I know that if you physically shop in another state, you pay their sales tax– which is why people from Massachusetts will drive a few hours to New Hampshire for tax-free shopping. If Amazon charged sales tax, would the tax dollars go to Amazon’s headquarters state, or to the state of purchaser’s origin?
Also, on a physical store note: I’m the child of small business owners. Nothing gets small business owners’ goat more than people coming in to test out products… and then buying them online. I know this is really more of Amazon vs. Wal-Mart, but the point stands.
Patrick, unfortunately, the only thing that matters is where the _credit card processing_ portion of the company is at. If the company accepting the funds isn’t in California… a lot of companies take advantage of this. Almost every big international shipper/seller tries to make sure that their billing portion of their corporation is in the most advantageous place possible.
I’m not disagreeing that their business tactics aren’t necessarily fair, but that is how corporate law is written in the United States. If you want to point fingers, point fingers at the individuals who created those laws in the first place. If anything, Amazon showcases just how corporate America managed to get to be as it has been.
I’m not saying whether or not it is right, but that is just how the cookie crumbles. Development labs are not the seller vendor portions of the company. And knowing a little bit about how companies can structure themselves, I’m completely not surprised that Amazon has done this, and entirely legally to boot.
Amazon is just demonstrating why tax shelter corporate law is bad. You got it right; it isn’t fair that they can avoid the taxes. However, _every company that wants to do this thing is 100% allowed to by the very laws made in America_.
Point fingers at Amazon, but they cater to the customer. Do you think customers want to pay extra taxes when they already feel they are over-taxed and their taxes are going to bail out corporations that have become foundation points for America?
I think not.
RJ – you are absolutely, emphatically 100% wrong about the sales tax issue.
I am a sales tax accountant, and virtually EVERY jurisdiction has rules that allow it to collect taxes on sales sent to their jurisdiction by a seller that is physically out of province or state. In both Ontario & BC, for example, if goods are sold to residents, shipped into those provinces, and the services are marketed directly to residents, tax must be charged.
Most provinces & states have similar provisions.
The idea is to create a more even playing field in that sales taxes, or rather tax avoidance, should not be a factor in choosing a vendor. Large companies like Dell or IBM are registered in all jurisdictions and charge tax as a matter of course – why shouldn’t Amazon?
(any errors are the fault of my smartphone, damnit!)
Public companies are beholden to no one except shareholders. That’s Capitalism 101. What behavior do you expect anyway from the world’s biggest mall? Consumers make choices every day. If book buyers are actually doing this, then they’re the ones to blame. Nobody’s forcing this behavior. Bottom line: most people only care about themselves. Sad but… just sad.
I’m not a huge fan of Amazon’s practices myself, but I do have to say that I think the Gawker article cited here as primary source material for this post is entirely biased and unfair, and resulted in this secondary post here at The Rumpus being subsequently biased and unfair.
I’d like to echo the above commenter, Pat’s, points:
“It’s fair to criticize, but at least present it fairly. The article doesn’t mention that this isn’t ongoing competition, it’s a limited one-day promotion (like so many companies do this season) that only covers 5 specific categories, for a somewhat negligible amount. “The one-day promotion Dec. 10 will offer 5 percent, or up to $5″
It also doesn’t pay people to walk out without buying, they just have to physically be at a location on one day. How many people make a special trip just to save 5%, compared to ones already out looking to spend and browse. Who can say they won’t make alternative choices to buy unique items in store.”
The way this issue has been presented here and elsewhere kind of smacks of people already predisposed to hating Amazon spinning this to try to convince others to hate Amazon.
Just sayin’.
Heididdle: I have yet to be charged sales tax for purchases done on online goods with a few exceptions — being places that are located in my province. I’ve paid _federal_ taxes in Canadian purchases, but unless every business in Canada is screwing it up, Quebec isn’t one of those provinces. (But then again, we get taxed enough, we’d probably mutiny.)
The business I worked for also was founded in Quebec. Now, admittedly, Quebec plays under totally different rules than BC or Ontario… and all for the wrong reasons, so I won’t argue with you on that regard. My experiences have been in Quebec, and as I said in the post, that was several years ago.
I think the point boils down to this; we pay taxes on the funds we make, (Over 50% in my household.) then we pay taxes again on the things we buy using money we’ve already been taxed for earning.
Do you really, really blame people for wanting to make the most of the money they do have left?
Personally, I think this entire argument is moot. As a recent college graduate who currently has a limited income, I buy my books from whomever will sell them to me at the best price. Period. I’d be happy to support my local merchants, and I do when possible, but my purpose in life is not to keep them in business. My purpose in life is to support myself and my family and to provide us with the best quality of life possible, and if the prices at local businesses limit me to the purchase of one book when I can instead buy that book AND MORE for the same amount of money at Amazon, then Amazon gets my business. And by the way, beating out your competitors is part of what Capitalism is all about, so if you live in the Capitalistic Western hemisphere and aren’t petitioning your government reps to change your economic system, you really have no legitimate beef with Amazon.
As for the tax laws governing online purchases, RJ is totally wrong. I am currently a resident of Idaho, so I don’t live in the same state where Amazon has its headquarters. When I buy things from Amazon (or, for that matter, from any other online retailer) and have them shipped to Idaho, I generally don’t pay sales tax. But my daughter lives in Kansas, and when I buy things at Amazon (or from some other online retailers) and ask to have them shipped to her, I get charged sales tax at the rate my daughter generally pays when she buys things locally. So clearly some tax laws require sales tax to be collected based on where the product purchased will ultimately end up, not based on the residency of the individual who purchases the items.
Now, if the folks who run California can’t find a way to legally force Amazon to collect sales tax, that’s California’s problem, not Amazon’s. As I indicated above, I know from personal experience that Amazon can’t sidestep Kansas’ tax laws. So Californians apparently aren’t as smart as Kansans, and that being the case, why shouldn’t Amazon take advantage of California’s ineptitude? That’s another thing that Capitalism is all about: getting as much business and raking in as much profit as the market and the law will ALLOW. If exploiting the loopholes or weaknesses in California tax laws means Amazon is likely to attract more business, it would be stupid and un-Capitalist for them NOT to exploit them. If Californians don’t like it, they have two choices: strengthen the tax laws, or tolerate the current situation. If they choose the latter, they should stop whining about it.
Being a San Diego press, if the sales tax law passes, we’d have to kick a bit up to the government, but that’s nothing compared to the cut Amazon would take from us if we sold our books on their site.
While I can respect the point of view that it’s best to save a few bucks at every turn, Amazon isn’t kind to the small press, and as a supporter of a Poetry Community, it’s only right to make sure you’re taking care of the people/presses that are taking care of the art form you love. But books from small presses directly, or from the authors themselves! If you do that, we can cover the taxes.
To my small press publisher friends: use paypal and site like BigCartel.com, and you can make a store that looks just as good as any Amazon site, without all the distractions.
You know, as someone who has posted a number of comments on a variety of websites critical of amazon.com, I’m amazed at how regularly they receive pro-amazon replies, usually very thoughtful and very length. It makes a fella wonder: how many trolls is amazon.com employing?
You automatically assume that people who don’t take the critical of Amazon stance are trolls hired by Amazon? Way to have a well thought out position.
I don’t think anyone can effectively argue that it doesn’t give Amazon (or anyone else) an unfair advantage to not have to charge state sales tax. But at the same time who says there is anything fair about the state taxes that California imposes? I try my best to support local bookstores, but $20-$25 for a new hardcover with 10% state sales tax tacked on is no less obscene than me trying to save money using a site like Amazon. If publishers and brick and mortar stores want us to avoid Amazon the impetus is on them to make it reasonably financially beneficial to do so.
I’ve purposefully limited this to books because, as far a California goes, there really isn’t another product that Amazon sells that has a small business counterpart. California is the land of big box stores that have already pushed those businesses out.
I haven’t spent a dime at Amazon since 2008, and don’t plan to ever again. The battle to have the lowest prices, as Michael is advocating above, has already proven to have its victims not only in the demise of local merchants AND big box stores (such as Border’s), but in the sweatshops and deadly factories that exist all over the world to bring us the “cheapest” products. Consumers have just as much obligation to think ethically about their purchases as the manufacturer’s do. For people who are interested in fighting the conglomeration of wealth in America, purchasing anywhere but Amazon is a great place to start.
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