Saturday, July 02, 2011

On Amazon.com and California and Taxes

If you've been paying attention, by now you know that Amazon.com has dropped California Affiliates over California's new law that would claim (falsely in my opinion) that because Amazon.com has affiliates based in California, that constitutes a physical presence (nexus) in the state and compels them to collect sales tax.

So, here's my opinion, for what little it's worth. Sales taxes are stupid. They ought to be completely abolished on all levels: local, state, and federal. They punish people for buying. Purchasing is the root of an economy, so sales taxes are anti-economy. Taxes should be taken on income, not outgo. I'm totally for reasonable income taxes (people should be taxed on their change in net worth from one year to the next), but I'd love to see all sales taxes abolished by constitutional amendment. I also recognize that my opinion is not widely shared.

As a result, I'm completely with Amazon.com on this one. If California wants to stretch the definition of nexus to include people who put links on their websites, then they can suffer the consequences of that action. Amazon.com doesn't have to allow affiliates. So California loses the income from affiliates who were paying income tax on their Amazon earnings, and gains... nothing. I certainly don't blame Amazon.com for refusing to deal with yet another sales tax code in another state (or rather, set of confusing and conflicting sales tax codes, as California taxes aren't even based on zip code, but actual locations, making it very difficult indeed).

I suppose it might seem strange for a person born and raised in Washington state where we have no income tax, only an insane patchwork of sales taxes, to have these opinions. I have no objection to a state income tax, but first all sales taxes have to be abolished. I think it ought to be one or the other, and preferably the income tax. I think states that have both are double-taxing their citizens. And, because governments get greedy if they aren't held firmly in check, I think it should be in every state constitution and in the federal constitution: Sales tax or Income tax, but never both.

In the meantime, I'll keep continuing to pay sales tax and grumble about it. Secure in the knowledge that, because Amazon.com is based in Washington State, I will always have to pay sales tax when ordering through Amazon.com and my own affiliate status isn't in danger from stupid legislation... yet. I'm sure there exists a legislator stupid enough to screw up even this.

3 comments:

Nick McNerderson said...

Amazon dumped Arkansas too, and trying to pick up programs to replace them is near impossible as many other companies don't want to deal with it.

Roger Owen Green said...

sales tax is regressive; I'm against it. Well, maybe on luxury items, such as yachts...

Nick McNerderson said...

I am particularly happy with sales taxes, but only because a Sales tax can be engineered to tax people for the particular services that they are using. For instance, the Gas tax is brilliant in that it pays for roads. Thus the users of the roads pay for them.