Stuffed Suits - "Amazon.CON"

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"Amazon.CON"

Posted by Contributor | 16 May 2011

From:The Azar Newsletter

Texas Bucks Amazon! (5-14-2011)

http://www.statesman.com/news/texas-politics/legislature-bucks-perry-on-amazon-sales-tax-as-1474211.html

So poor old Amazon is pulling out of Texas," closing its Irving distribution center, eliminating 119 jobs". Big Texas has a distribution center, and it only has 119 employees? And Texas is far bigger than SC? So how many REAL jobs will Amazon actually have in SC?

This is what should happen, states nationwide demanding fair taxes from Amazon and all others, or give them the boot. Some other states are suing Amazon as well. Eventually, all states will find giving the farm to Amazon, and then the farmhouse and car too, is going to cost more than it brings. In part, that is because Amazon pulls out of a state as soon as the incentives are threatened or expire, leaving the remnants for the state and taxpayers to suffer. They play state against state, and at any controversy, threaten to leave and to terminate any associates in that state. they are like the kid that takes his ball and goes home, except that more states are now telling Amazon to go home, they are no longer going to allow unfair advantage in their state. ( Read the notes about other states in Wikipedia: http://en.wikipedia.org/wiki/Amazon.com )

Amazon has a bad record and bad attitude. We in SC should band together with all the other states and force Amazon's hand, creating a fair marketplace for ALL businesses. To roll over and take it does nothing to advance SC as we will face 1249 employees looking for unemployment in 5 years when Amazon finds another state to give them new incentives. Considering they have roughly 20 distribution centers in the US, and their 2010 sales $34.2 billion, that means the average sales from each warehouse was $1.7 billion. If only a 5% sales tax was collected on all of Amazon's sales, $1.71 billion would have gone to local and state governments to help fund services. As it now stands, all of us subsidize anyone who purchases from Amazon, as the shortfall must be made up somewhere, and that is usually in some sorts of higher taxes. Anyone buying from Amazon is not only subsidizing other Amazon buyers, but also increasing her taxes as she must also make up for the lost tax, a double whammy.

And, at $1.7 billion extra each year, why wouldn't Amazon leave all states that don't buckle under to excessive incentives? That amount could build 20 new warehouses in one year and leave $6.8 billion left for Amazon to rake in for 4 more years if they only got a measly 5 years of incentives. Not bad for strong arming weak legislators!

Instead of begging and groveling at a merciless Amazon, we should a) band with other states in refusal, b) demand our state sue them as are others, and c) push our DC congressmen to initiate a law creating sales tax to be paid at the point of shipment nationwide. Then we can have a fairer system where small business has a fighting chance against a person that makes $1.7 million a year and owns 20% of Amazon's stock (Jeff Bezos, Amazon's CEO)

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Legislature bucks Perry on Amazon sales tax as Senate joins House in tightening rules

By Barry Harrell

AMERICAN-STATESMAN STAFF

Published: 9:37 p.m. Friday, May 13, 2011

In February, as the State of Texas and online retail giant Amazon.com Inc. were squaring off over sales tax collection, Gov. Rick Perry said he hoped state lawmakers would step in and do something to prevent Amazon from pulling up stakes in Texas.

Turns out, the Legislature has decided to go a different route.

The Senate on Friday overwhelmingly passed a measure aimed at tightening the state's rules on when online businesses like Amazon must collect sales tax.

It spells out what constitutes a physical presence in the state the key factor that determines whether a retailer can be required to collect sales taxes, legal experts say.

Senators voted 30-1 to pass House Bill 2403, a measure that originated with Rep. John Otto, R-Dayton . The bill was sponsored in the Senate by Sen. Royce West, D-Dallas.

With its vote, the Senate joined the House in siding with state Comptroller Susan Combs in her push to force Amazon.com and other online retailers to collect taxes on sales made to Texans.

The bill now goes to Perry, who could sign it into law, let it become law without his signature or veto it.

Amazon has consistently opposed collecting tax on its online sales, which has angered state governments and traditional retailers. Combs has said Texas loses $600 million a year in uncollected tax revenue on online sales.

"We consider this to be the retail job creation act of the 2011 session. A level playing field, with no advantages for out-of-state companies, means more jobs for Texans," said Eric Bearse, spokesman for the Alliance for Main Street Fairness, an industry group that represents brick-and-mortar retailers. "This is also an issue of fundamental fairness. Texas relies on the sales tax for most of its state revenue; therefore, everyone needs to collect it."

Amazon officials did not respond Friday to a message left seeking comment.

Lucy Nashed, a spokeswoman for Perry, declined to comment specifically about the bill or what action Perry might take on it.

"He'll thoughtfully review the bill when it makes it to his desk, as with any legislation," Nashed said.

The online sales tax issue has been a political hot button in Texas since Combs' office sent Amazon a notice last year that it owes $269 million in uncollected sales taxes, saying the company had failed to collect tax on Texas-related online sales from 2005 to 2009. Combs' office said Amazon's distribution center in Irving constituted a physical presence in the state.

Under a 1992 U.S. Supreme Court decision, retailers with a physical presence in a state can be required to collect sales taxes, legal experts say.

After Combs sent Amazon the $269 million assessment, the company announced that it was closing its Irving distribution center, eliminating 119 jobs. It also accused Texas of having "an unfavorable regulatory climate . . . "

Please read the rest of the article by clicking here: http://www.statesman.com

Comments

0 #1 John C 2011-05-16 14:40

Since when is 5% of $1.7 billion equal to $1.7 billion? And, dividing the total sales by the number of warehouses has absolutely nothing to do with estimating taxable sales to SC customers. Under current law, without any arm twisting at all, sales made from a SC warehouse to customers in another state are not subject to SC sales tax. If you are trying to quantify the tax exemption, then the SC sales volume is the relevant number here.

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