Archive for the ‘Sales Tax’ Category

April 1st: equal collection across the nation

March 30, 2017

April 1st: equal collection across the nation

I’ve written quite a bit about sales taxes and Amazon in this blog…I even have a category for it. 🙂

Sales Tax

It’s been a tumultuous topic, with lawsuits and threats and compromises and back-and-forths.

The basic issue has to do with when you buy items from Amazon: do you pay sales tax at that point or not? If you don’t, would you have paid sales tax if you’d bought the same item in a local brick-and-mortar store?

As I say, it’s complicated. 🙂

States can compel organizations (like Amazon) which have a physical presence in their states (it’s called a “nexus”…it might be a building, but a sales force counts, too) to collect sales tax at the point of sale.

The way it’s been done has been very irregular in different states.

So, there were repeated attempts at the Federal level to standardize internet sales tax collection…which Amazon favored, so they weren’t dealing with thousands of different tax jurisdictions (in some places, like Alaska, it gets to the municipal level).

Well, due to a couple of things, as of April 1st 2017 (about a month from now), Amazon will be collecting sales tax in every applicable state in the USA. I say “applicable” because not every state has a statewide sales tax (Delaware, Montana, New Hampshire and Oregon don’t, and Alaska has that municipal tax instead).

One of the biggest things which has pushed this is that Amazon has been getting a physical presence in more places, and is probably looking to expand. Some of that is “fulfillment centers” (warehouses, although they are more than storage), and some of it is actual brick-and-mortars stores (including pop up stores).

I also think it seemed less likely that the Federal government was going to pass a major new regulation on commerce.

Does this mean you’ll suddenly start paying tax on Kindle books on April 1st?

Probably not.

Generally, states don’t collect sales tax on e-book sales (mine, California, doesn’t), which are seen as more of a contract than an item being sold. It does mean that if you buy a physical item from them you might, if its taxable. Kindle EBRs, like the Kindle Paperwhite (at AmazonSmile*) (which is $30 off for Prime members in the USA at time of writing) would usually be taxed.

Now, I do think this is a good thing for consumers. I’ve seen this really misreported, saying that consumers are going to start paying sales tax. I was very happy when Amazon started to collecting sales tax in California. Before that, I had to spend quite some time calculating what I owed for Amazon taxes on my state income tax each year.

In most cases, you probably (check with a tax attorney if you aren’t sure) owe something like a “use tax” if you don’t pay a sales tax at time of purchase.

Hypothetically, it wasn’t how much you paid…it was when.

Many people, of course, just didn’t pay that use tax on their income taxes…which potentially risked legal consequences, even though being caught was probably unlikely.

I’m happy to see this behind us, at least for now (things could always change).

What do you think? Are you surprised it happened without Federal action? Do you think this will encourage states to start taxing e-books? Will make this make a difference about where you shop? Feel free to tell me and my readers what you think by commenting on this post.

Just a quick comment on Samsung introducing the Galaxy S8 today: yowza! 😉 They’ve been having a tough PR (Public Relations) time lately, with an exploding device last year, and a scandal in the Executive office…but they still are way ahead of Apple in the iPhone marketshare. They’ll have to do a lot to recover…and this phone does a lot. There is a Kindle presence on the Samsung, so at least there’s a tie-in…but if it all works the way it’s supposed to work, it’s going to be significant new phone. If you want to read more, there’s a lot of information on the official site.

April Hamilton’s Love My Echo also has some interesting information about why this might be a bad time to buy an Echo… Love My Echo blog.

Join thousands of readers and try the free ILMK magazine at Flipboard!

All aboard our new The Measured Circle’s Geek Time Trip at The History Project!

* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get. :) Shop ’til you help! :) 

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.


Round up #276: PRH on subsers, Boehner blocks

November 15, 2014

Round up #276: PRH on subsers, Boehner blocks

The ILMK Round ups are short pieces which may or may not be expanded later.

No Active Content for the Voyage?

This question had come up before, but according to this

post in The Digital Reader by Nate Hoffelder

Amazon is not planning to add Active Content for the

Kindle Voyage (at AmazonSmile: benefit a non-profit of your choice by shopping*)

their flagship model.

Hoffelder reports having been told by Amazon that their “…focus is on building the best purpose-built reading devices.”

I suppose I can understand as a goal, but Active Content is one of those really non-intrusive things. If you don’t want to use it, you don’t. Games have been on the Kindles since the very first one in 2007 (although the games on that one were hidden…I played Minesweeper on mine, though). It’s an interesting decision.

There are over 1,500 customer reviews for

Every Word (at AmazonSmile: benefit a non-profit of your choice by shopping*)

in the USA Kindle store, with an average rating of 4.3 stars (out of 5). There have been ten reviews at time of writing in November 2014…and almost all of them were five stars.

It’s currently ranked #2,397 free in the Kindle store…out of 64,497, making it in the top 4% of sellers.

My guess is that this really has more to do with associated expenses (adapting the Amazon published ones for new models, customer service) than it really has to do with what customers say. However, I have had e-mail exchanges with the person listed by Hoffelder, and that person has always seemed nice and knowledgeable to me…so I’m sure there is some evidence for what the rep says.

$80 worth of apps free through Saturday 11/15

While I probably do more reading on my

Kindle Fire HDX (at AmazonSmile*)

than I do anything else (counting text-to-speech as reading…which I do), it certainly isn’t a “purpose-built reading device”.

I’m sure some people would argue that Amazon is turning away from Active Content to encourage people to buy Fires…but I think they’d be happiest if people had both. 😉

For those of you who do use a Fire and want apps, Amazon has a promotion going on through today (Saturday) with $80 worth of apps being given away. They are calling it an

App Toolbox (at AmazonSmile*)

Note that not all of these will work on a Fire tablet (the ones that don’t may work on the Fire Phone, if you are one of the rarities like me who owns one). 😉

Titles include:

  • Office Calculator Pro: 4.4 stars, 172 reviews
  • MathsApp Graphing Calculator: 4.4 stars, 63 reviews
  • EasyTether: 4.3 stars, 861 reviews
  • Open Document Reader: 5.0 stars, 3 reviews
  • Oxford Dictionary of English: 3.5 stars, 8 reviews…normally $24.99

and twelve more.

Amazon and others advocate for Equal Collection Legislation

It’s been a while since I’ve written about this issue, but it’s back in the news.

Congress is considering a bill which would mean that sales tax would be collected on online purchases in a way similar to how it is collected now in brick and mortar stores.

Amazon and Barnes & Noble both support the current legislation, along with many other entities.


National Retail Federation

has sent a letter to Speaker of the House John Boehner, urging passage. Unfortunately, every link on their website to that letter is failing for me…they may be overwhelmed because of the coverage.

Why does this matter now?

If the current bill isn’t passed before the new Congress takes over in January of 2015, it’s dead…and they have to start all over (again).

It might surprise you that Amazon and B&N are on the same side on this.

Amazon has argued for it before. They don’t want there to be lots of different rules about how this happens all over the country: they want one clear sales tax collection policy (not rate, policy) at the national level.

This (and previous bills) bill is not about people owing more taxes, but it would certainly mean that many people pay more.

Check the sales tax category (linked at the end of this post) for more information, but essentially, what happens now is that many people are supposed to pay tax on things they buy on the internet…and they don’t. Every year, my family adds more when we pay our State taxes for those uncollected taxes…it would be far easier if they just collected them at the time of purchase.

Can you imagine what it would be like if you had to track your in-store purchases yourself to figure out what sales tax you owed?

Amazon has repeatedly said that when they are in situations where sales tax is collected on their purchases, it doesn’t hurt their market share.

I believe that. Oh, that’s not to say that some people might buy very expensive items from Amazon to avoid having sales tax collected. Of course, they might be quite surprised if they ever get audited…not having paid that will not get you invited to the IRS offices for tea. 😉 It might get you invited somewhere else less pleasant, though…

According to this

The Hill article by Bernie Becker

Speaker Boehner is blocking the bill, despite some significant bipartisan support.

It’s worth noting that not every state would collect sales tax on e-books anyway (California doesn’t, when they are delivered electronically…at least, that’s how it was last time I looked), but this still could affect Kindleers.

PRH C.E.O. doesn’t like subsers

Generally, I’ve found Random House to be pretty forward thinking…but this

The Bookseller article by Benedicte Page

makes me question that.

C.E.O. (Chief Executive Officer) Tom Weldon of Penguin Random House makes several statements.

One of them has to do with keeping e-book royalty rates the same, but the headline item is really about not believing in subsers (subscription services), like Amazon’s

Kindle Unlimited (at AmazonSmile: benefit a non-profit of your choice by shopping*)

In this short excerpt, Weldon is quoted as saying:

“We are not convinced it is what readers want. ‘Eat everything you can’ isn’t a reader’s mindset. In music or film you might want 10,000 songs or films, but I don’t think you want 10,000 books.”

Well, as someone with something like 10,000 paperbooks on my shelves, I beg to differ. 😉

Certainly, it usually takes longer to read a book than it does to listen to a song or watch a movie, so you might think you need access to fewer…but you still need to make the choices as to which ones to consume.

While I think there is a lot future in curation (people, and perhaps software, picking books that you are likely to like), having a variety is important now.

Let’s say you like 1% of the books that are published each year. 10,000 gives you one to enjoy every three days. That’s a pretty good pace.

I think subsers are a big part (but not the only part) of the book market in the next few years, and I suspect Random House may come on board with it. Weldon didn’t rule it out, although the CEO thought they were more likely to succeed in emerging markets. If they did there, that might encourage them to join in more developed markets.

I recommend the article: see what Weldon has to say about PRH selling directly to consumers…I think what’s said there is wise.

Join hundreds of readers and try the free ILMK magazine at Flipboard!

* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get. :) Shop ’til you help! :) By the way, it’s been interesting lately to see Amazon remind me to “start at AmazonSmile” if I check a link on the original Amazon site. I do buy from AmazonSmile, but I have a lot of stored links I use to check for things.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.


Round up #224: 12 Days of Deals, $20 donations

December 3, 2013

Round up #224: 12 Days of Deals, $20 donations

The ILMK Round ups are short pieces which may or may not be expanded later.

Buy a Kindle Fire HDX 7″ on AmazonSmile and Amazon will donate $20 to a non-profit of your choice

My readers have embraced AmazonSmile, a new program which allows you to benefit the non-profit of your choice by shopping at a special Amazon mirror site. It doesn’t cost you anything, and it feels just like shopping at Amazon (you’ll use the same account).

Amazon donates half a percent of the purchase price of eligible items, and you can change your non-profit whenever you want.

Half a percent isn’t much, of course…spend $100, and your non-profit gets fifty cents. However, every small bit can help (I was formerly on the Board of a non-profit, and you’d be surprised how much difference $10 can make).

Today, Amazon announced a great promotion!

If you buy a

Kindle Fire HDX 7″, HDX Display, Wi-Fi, 16 GB – Includes Special Offers


Kindle Fire HDX 8.9″, HDX Display, Wi-Fi, 16 GB – Includes Special Offers

at AmazonSmile through Sunday, December 8th, Amazon will donate $20 to your designated non-profit! That’s in addition to the normal half a percent.

That could really make a difference. If five of these Fires are bought for your preferred organization, that’s more than $100 donated.

I would send this post or the

press release

to any non-profits you support, so they can publicize it with their supporters…I’m going to do that with some I know.

Thanks, Amazon!

Amazon “floats” a “pie in the sky” idea

This may be the most positive (or at least, not negative) publicity Amazon has ever gotten.

In a 60 Minutes


with Charlie Rose (Amazon’s best friend in the media), CEO (Chief Executive Officer) Jeff Bezos revealed PrimeAir, an “R&D” (Research and Development) stage idea to have small “octocopters” deliver Amazon packages to your door. This is how it might work:

concept ad

Every major news outlet seems to have carried the story, although I think they were sometimes a bit fuzzy on the reporting.

First, this is not going to happen on “your next order”, as I saw one headline say. It won’t happen before 2015 at the earliest (they need FAA…Federal Aviation Administration approval), and Bezos was indicating it could be years away.

Second, it’s worth being clear that these would not be remotely piloted. You would give them the coordinates (presumably, the small helicopter would read them off a label), and then it would make its own decisions about how to get there.

I have been most amused about people’s immediate concerns about them being shot down: I suspect using the term “drone” had something to do with that. That’s not to say it wouldn’t happen: people have been known to shine lasers at piloted helicopters, a very dangerous practice.

It’s just that other methods also have a risk of robbery.

Suppose, as was suggested, you could place an order online and have the PrimeAir delivery in half an hour (if you live in certain areas near a fulfillment center). I would guess that poses less of a risk of theft (since you’d be waiting for it) than the package being left on your doorstep for eight hours while you are at work. I think it may become fairly easy to catch people actually shooting at microaircraft, as they become more commercially necessary.

It won’t stop entirely: people shoot at UPS trucks, too.

Certainly, dogs would pose a risk, as might bird strikes (perhaps even intentional ones, in the case of a raptor), but I’m not convinced it would be inherently more risky.

It also obviously wouldn’t work with everything…you aren’t going to get a 25 pound bag of dog food that way, since the projected carry limit is five pounds.

The real question for me is why Amazon showed it on a national TV program now.

They usually won’t even tell us what they are releasing next week. For that matter, they sometimes don’t even tell us what is in an update after they’ve released it. 😉

It’s just not typical for them to tease something by years…they are a pretty secretive company.

The most likely thing to me is that it is to use public opinion to sway the FAA and other entities to approve the project. It may also be to force the package delivery companies to develop something similar. How much is Amazon’s business worth to UPS? If Amazon can do, oh, ten percent of its deliveries itself, that would really hurt Brown’s profitability, I would think.

Amazon threatening to disrupt your industry has got to make you seriously consider taking preemptive action.

That sort of move on Amazon and Jeff Bezos’ parts is why this

CNNMoney article by Adrian Covert

makes so much sense. Covert makes the great point that Jeff Bezos is not the “next Steve Jobs”. They are very, very different. Jobs masterminded great hardware, and yes, absolutely influenced how people see and use technology.

For Bezos, hardware is simply one more tool to use in reshaping commercial society.

Jeff Bezos is more like Henry Ford. Ford didn’t just make cars. Ford remade how people make cars…and so many other things. It’s important to note that Henry Ford didn’t invent the assembly line concept, but saw a practical use for it. Bezos didn’t invent autonomous microaircraft, or even  the use of them for product delivery. It’s figuring out how they can serve Amazon’s three tenets of Service, Selection, and Price that show the genius of Jeff.

“20 Things That Happen When You’re a Book Nerd”

This is a fun

post on BOOKRIOT by Rebecca Joines Schinsky

I agree with quite a few of them, and I’m sure many of you will, too. I really like that it isn’t limited just to p-books (paperbooks). In my experience, the more you love books, the more you love e-books. I mean, you’d read books on soap bubbles, if somebody could figure out a way to do that. 😉

Supreme Court declines to hear internet tax case

Amazon wants a national sales tax policy (not a national sales tax).

They’ve testified in favor of it.

What they don’t want is a bunch of different rules in a bunch of different places, and they don’t want states to simply act on their own, imposing whatever rules they want.

That’s why Amazon challenged New York’s “Amazon Law”. It got up to the doorstep of the Supreme Court, but they declined to hear it.

Bloomberg article by Greg Stohr

That should make a bigger push to get something through Congress.

I’ve written a lot about equal collection legislation before.

There are important constitutional issues here, but it could be resolved by Congress passing a law (it doesn’t require an amendment).

Believe it or not, that actually could happen. 😉

Amazon’s 12 Days of Deals for books

Today is the first day of the second annual 12 Days of Deals for books at Amazon:

These are limited time (and quantity) deals on new and popular books…there are three of them today, and they’ll change each day.

One thing this really drives home for me: how much cheaper Kindle store books can be than the hardback equivalents! The first deal (on as I write this…check the price before you click or tap the Buy button) is for

The Goldfinch
at AmazonSmile

It’s $2.99 as a Kindle book…$8.99 (just about three times as much) as a hardback. As I write this, 17% of the latter have been claimed, with about 3 1/2 hours left to go.

Certainly, they may sell out: many people prefer to give hardbacks as gifts, and (at least among traditionally published books), paper still sells more than digital if we look at all channels.

Still, if you just want to read it, there is a big economic argument to go with e-books.

* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get. :) Shop ’til you help! :)  

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

Round up #167: no DRM doesn’t increase piracy for Tor, Mothers’ Day specials

May 7, 2013

Round up #167: no DRM doesn’t increase piracy for Tor, Mothers’ Day specials

The ILMK Round ups are short pieces which may or may not be expanded later.

Mothers’ Day specials

Oh, how the pace of commerce has changed! Mothers’ Day is this Sunday in the USA, and you can still get deals on line and get the item in time. Whether you are buying for a Mom or not, I thought I’d mention a couple.

First, there’s the deal on the Kindle Fire HD 7″ models directly from Amazon (this doesn’t appear to apply to the 8.9″). You have to enter this code at checkout:


Note that entering it a checkout means you will not get the opportunity to enter it if you use 1-click. This deal is good through May 12th, and only for USA customers. Here is a link to the rest of the

Kindle Fire HD 7″ deal details

Second, DecalGirl has a deal on skins. Skins are really a way to personalize a device, including Kindles and Kindle Fires. It’s like a super duper sticker you put on it. You can even do customized ones by uploading a photo. They have a promotional code for 25% off through May 13th…I guess they even have the late folks covered…so to speak. 😉 Of course, you could also let Mom pick her skin.

You can shop here:

DecalGirl Mothers’ Day skins

At checkout, enter the code


I assume it’s okay to post this, since they sent me an e-mail they said I could forward to friends…you’re my friends, right? 😉

Senate passes equal collection legislation

I’ve written about this a lot before, and I’m happy to see it moving along (even though it isn’t law yet).

There’s nice coverage of the vote by the Senate to pass equal collection legislation in this article

Just to summarize, it would mean that large internet retailers would collect sales tax at the point of sale on online purchases, similar to what happens in a brick-and-mortar store.

This is key: it is not a new tax.

If people think of it as a new tax, it probably won’t pass the House of Representatives, despite the bipartisan support it has had.

Nobody will owe a penny more of sales tax if this passes…but the vast majority of people will pay more.

That’s because you are probably expected to pay sales/use tax in your state on your annual taxes when you buy things from out of state retailers…but most people just don’t. We do in my family, and it’s a bear…if this does pass, it will simplify things for me.

Can you imagine figuring out your own sales tax on your brick-and-mortar purchases, and then paying it as one lump sum once a year?

I’m not convinced it will pass the House, although there are certainly  motivations  to do so. Amazon and Wal-Mart both support it. More importantly, the Federal government might be able to send less money to the states if the states were able to collect the sales tax they were already owed. However we all know that “logic” isn’t spelled “lawgic” for a reason…the two don’t have a whole lot to do with each other. 😉

Tor going DRM-free has not increased piracy

There’s a fascinating post

that talks about how things are going after a year of being DRM (Digital Rights Mangement) free. Tor is a major publisher (part of Macmillan), and I reported on their decision.

DRM is code inserted into digital content by the publisher to control the use of that material.

When you download an e-book that is DRM-free, there is nothing it that technically stops you from copying it or altering it.

That doesn’t mean that you have the right to do anything you want: you could still do things (like distributing it freely over the internet without permission) which would be illegal infringement.

However, if you want to convert it from an e-book you can read on a Kindle to an e-book you can read on a NOOK, that is apparently okay.

Here’s the key line in a short excerpt:

“As it is, we’ve seen no discernible increase in piracy on any of our titles, despite them being DRM-free for nearly a year.”

That doesn’t mean there has been no piracy (there can even be piracy of DRM-protected files…it’s just harder), but that releasing without DRM hasn’t meant that there was any more or it (as far as they can tell).

As they note, their success doesn’t mean it would be equally successful for all books, but you can bet other tradpubs (traditional publishers) are looking at this carefully.

Taking a Kindle for a test drive…really

My Significant Other and I knew that it was getting to be time to buy a new car (I had a Scion XB with over 150,000 miles on it…it was still doing fine, but you start thinking about maintenance costs at that range).

For me, tech in the car is a big thing. I’ve been listening now to text-to-speech in the car for years.

In the Scion, that was with an FM transmitter, playing through the radio.

We wanted a hybrid. We’d been driving Toyotas (I did like the Scion a lot) and had pretty much settled on a Prius.

Then, we drove a Ford Fusion over the weekend…and bought it. 🙂

For us, the drive was just so much better…the feel of it, and especially the visibility.

The tech was fine: it’s practically like having gotten a new computer, which is a fun day for me. 😉 I’m not that big on driving, but I really enjoyed it today. I have a touchscreen in the car, but I can also talk to it. The Kindle Fire (and my phone and my Blackberry and my Significant Other’s phone) paired to the Bluetooth with no problem. I start the book on the Kindle (before I start driving), and tell it to play Bluetooth audio…and I’m off and running. It also has two USB charging ports, so I don’t need a car adapter with this one.

Unrelated to the Kindle, the back-up camera is crazy cool. I haven’t had a new car for about nine years, so this all new to me. I really like that it shows me two virtual reality lines for where the car is going to go…and if you turn the steering wheel (even before you start moving), it shows you the projected path. It’s going to take quite a while before it feels natural to look forward (at the screen) when backing up, but I can clearly see the advantages.

That “taking a while” thing happens, though. I had a funny one the other day. The clock in our bathroom died, and I’m often reading on my Kindle Fire in there while I exercise and brush my teeth (I take a long time doing the latter). However, I did have a paper magazine up on the towel rack where I normally put my Fire. I caught myself reaching up to push something on the paper magazine to see what time it was. 🙂 I didn’t get very far, but that’s clearly become a habit for me.

Some people ask why an RSK (Reflective Screen Kindle…anything but a Kindle Fire) doesn’t show a clock all the time. One reason why their batteries last so long is that they do very little when you are reading. They redraw the “page”, and that’s about it unless you tell it to do something. If there was a clock, they’d have to redraw the page at least every minute…that would eat up battery charge life.

What do you think? Will equal collection legislation pass the House? How will it affect Amazon if it does? Did you buy any more books from Tor because they went DRM-free? How do you use your Kindle in the car? Feel free to let me and my readers know by commenting on this post.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

Senate approves equal collection budget amendment

March 24, 2013

Senate approves equal collection budget amendment

I’ve written many times about equal collection legislation.

What that would be is federal legislation that would result in large internet retailers (like Amazon) collecting sales tax at the time of sale on purchases in states where they do not have a nexus (essentially, a physical presence, but a sales force counts in addition to buildings). That would make your purchase from an out-of-state retailer seem more similar to your purchase from a brick-and-mortar store: sales tax would be collected when you made your purchase.

It’s very important to realize that this is not a new tax. Generally, purchasers are supposed to pay those taxes (they may be a “use tax” at that point) on their annual state taxes, the same time they pay they income taxes.

We do that every year (I’m still working on our taxes for this year), and it’s been a bear in the past. We have to go through our internet purchases, figure out whether or not taxes were collected, then figure out which purchases are taxable in our state (not all purchases are…e-books delivered electronically, for example, are not subject to sales/use tax in California where I reside…but e-books on a CD would be), then pay one big lump sum.

I was quite happy when Amazon started collecting and then paying the sales tax for me on purchases. That makes it far easier than doing it myself.

However, it is likely that the vast majority of people do not pay those taxes. The states don’t (currently) have a way to know about those purchases, so it’s hard for them to enforce the payment. Oh, I assume they can sock it you for penalties and fees if they catch it on an audit, but that’s an expensive thing to do.

So, people have been introducing equal collection legislation for some time, which would compel the collection (although it’s a bit complex).

How do you think Amazon feels about that?

They are for it…big time.

In 2011, Amazon Vice-President Paul Misener testified before Congress in favor of it, and you don’t send a top executive to do that if you don’t mean it.

Why would Amazon support the company having to collect taxes, therefore raising the bottom line that the consumer pays at the time of purchase (but not the bottom line overall for that consumer, if they properly pay their use taxes later)? Isn’t it more expensive for them? Doesn’t it cut into a competitive advantage?

Yes and yes.

However, if it doesn”t happen federally, then states start passing all kinds of “Amazon laws”, that have different rules and different processes. That’s more expensive.

Amazon already collects sales taxes in a lot of places (the state of Washington, of course, but also a lot of places outside the USA), and has repeatedly said that it doesn’t significantly hurt them.

What they don’t want is to have to do it a whole bunch of different ways.

That suggests that equal collection is inevitable in some form or another, so Amazon is trying to get it into the best form for them.

Now, I need to say that this amendment doesn’t make it law. There is a law under consideration called the

Marketplace Fairness Act

and a vote will likely come on that fairly soon.

Will it pass?

Well, the amendment passed handily, 75 to 24…bilateral support.

It’s being sold by some groups as making a “level playing field” for brick and mortar stores and e-tailers, but of course it doesn’t. It’s still more convenient to shop online, for example, and it’s still possible to get something in a brick and mortar store more quickly (although not by much).

One of the reasons it has support?


Remember, this is money that taxpayers should already (according to the law) be paying. If they start paying it, that will put more money in state coffers, which in turn makes things easier on the feds.

For the Congresspeople who are staunchly against new taxes, this is not a new tax. No one will owe an additional penny in taxes, as I understand it…it’s just that (I would guess the vast majority of) taxpayers will pay more taxes.

It’s not going to save main street. As a former retailer (including having been a bookstore manager), I’ve written about that many times, too. 🙂 You have to make the buying experience such that your customers are willing to pay more money than they would online. You can not sell in a brick and mortar more cheaply than you can online and make a profit. You have literal overhead, and more payroll per sale, and shoplifting losses in a way quite different from an e-tailer. You have to appeal on other bases, and then you’ll survive…and thrive.

As you can imagine, there has been some coverage of this…although I think the issue has been going on for long  enough that the sharpness of any protests have dulled.

I think that this

Forbes article

gets it right, but this

cnet article

doesn’t make it clear. They say, for example, that “The U.S. Senate voted overwhelmingly today to endorse levying Internet sales taxes on American shoppers…” says in their definition (which I am briefly excerpting):

“verb (used with object)

5. to impose (a tax): to levy a duty on imports.”
They are not imposing a tax: they are changing the point in the cycle at which an existing tax is collected, and changing who has to do the collection and submission from the consumer to the seller.
If the MFA (Marketplace Fairness Act) passes, how will affect you?
It probably won’t affect you on e-books delivered electronically, unless your state already has a tax on those. Oh, it’s worth saying…why don’t they tax those? Remember that what you buy is a license to read the book, which is like a contract…you aren’t buying a physical object. Generally contracts are not subject to sales tax.
It might affect you when you purchased an EBR (E-Book Reader), tablet, or accessory from Amazon. Again, it wouldn’t add sales tax, but you would have the sales tax collected at the time of sale.
I think it’s probably pretty obvious here that I’d like to see this passed…it would simplify my life. 🙂 However, I would be interested to hear what you think about it, particularly if you think it should not be passed (and why). Feel free to let me and my readers know your thoughts by commenting on this post.
This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

The Guardian: Amazon overholding on VAT for UK publishers?

October 22, 2012

The Guardian: Amazon overholding on VAT for UK publishers?

I think this

Guardian article

will have a negative impact on Amazon’s perception by the public in the UK, even though the issue is a bit mathy and wonky.

In the USA, we have sales taxes and “use taxes”, when it comes to purchasing e-books from Amazon. The basic idea is that either there is a tax on the sale of an item, or, if you buy it from outside your state and then bring it in and use it there, the state may charge you a tax for using it.

It’s very inconsistent, with different states (and counties, and even cities in some cases), charging different rates…I’ve heard that there are over 8,000 tax jurisdictions.

Still, the idea is the same: the actual sale of the product within your state is taxed, or your use of it is.

Not all states tax e-books delivered electronically, though, sort of the same idea as not taxing a contract.

In Europe, Australia, and other places, there isn’t a sales tax…there is a Value Added Tax (VAT).

The idea there is that you are taxed when the value of something is increased. Just making up numbers, let’s say a tree is worth $100. You chop it down, turn it into lumber (let’s say ten boards), and it’s worth $250. You would be taxed on that $150 difference.  Now, one of those $25 boards is turned into a table that sells for $100. The company that did that would owe tax on the additional $75 value. That’s the basic idea.

I’m honestly not very familiar with the European implementation of that idea. I know when I visited Australia, the price on the menu or on the price tag was the price I paid: there was nothing visually added to what I paid in the form of a tax. That was quite some time ago, though, and I’m not sure it’s the same in Europe.

I do know, though, that there are different rates of VAT in different countries, and that VAT impacts the consumer prices of e-books paid by customers.

In the USA, the amount of sales tax collected at the time of sale depends on where the customer is located (based on the customer’s account). I’m in California, and we aren’t taxed on e-books delivered electronically, so the price I see is the price I pay. In other states, it might be 5%, 8%, and so on.

According to the Guardian article, the UK VAT rate is 20%…and the Luxembourg VAT rate is 3%.

Here’s the thing.

Again, according to that Guardian article, Amazon withholds 20% from the money it pays a UK publisher to cover that VAT. Let’s say that the list price of the e-book is $10. Maybe Amazon would normally pay them $5, but they only pay them $3 (so they have the other $2 to give to the government in the UK).

On the surface, that makes sense. In the USA, Amazon collects the money from the customer and sends it to the state, but again, that’s a sales tax, not VAT.


The article says that Amazon only pays the government the Luxembourg rate of 3%, because that’s where they are based.

If, and that’s a very big if to me, that’s the case…what happens to the other 17%?

Now, I don’t understand the mechanics of this enough. If a UK customer buys something from a Luxembourg seller over the internet, does the VAT happen in Luxembourg, or in the UK (the latter being what would happen in the USA traditionally)?

The article by Ian Griffiths and Dan Milmo (which I recommend) has a lot more to say about Amazon’s dominance in the market. It suggests that there are situations where UK publishers might get only 10% of the consumer purchase price on an e-book sold by Amazon.

Now, movie theatres in the USA can run into that same situation with blockbuster movies…you pay $8 at the box office, and the theatre gets eighty cents of that. However, they can make it up with that $5 box of popcorn. 😉

I don’t know how influential this article will be with the public, but regardless of  how the mechanics actually play out, it’s quite negative about Amazon.

If you have insight on how VAT works in Europe, I’d love it if you comment on this post for me and my readers. Would what Amazon is alleged to have done be unfair? Would Amazon actually pay that 20% to the UK, even though they are based in Luxembourg? Do you just have an opinion about this? Feel free to let me know.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

Amazon to start collecting sales tax in California on September 15

September 6, 2012

Amazon to start collecting sales tax in California on September 15

I’ve written pretty extensively about the issue of equal collection legislation, where out-of-state retailers (including internet) collect sales tax at the time of sale, the same way the brick and mortar stores do. Amazon will start doing that for California customers a week from Saturday on September 15, 2012.

L.A. Times article

I’m looking forward to it.

That will seem counter-intuitive to some people, but it’s important to note that we are not going to be charged any more tax…the question is how does it get paid.

In California, we are supposed to be paying a “use tax” (equivalent to a sales tax) on out-of-state purchases on our annual state taxes. We do that in our family, and it’s a bear. We have to figure out what we bought, whether or not we  already paid taxes, and whether or not it is a taxable item in California. Then, we pay a not inconsiderable lump sum. Can you imagine doing that with everything you bought from the local store?

The problem all along has been that many people don’t do that, and California doesn’t have the resources to go after them.

In this situation, no one will owe more taxes, but many people will pay more taxes.

This does add expense for Amazon, but they already collect sales tax on many sales, so they have a mechanism in place.

Will this hurt Amazon’s sales?

I don’t really think it will all that much. I know they’ve said that it hasn’t significantly hurt them in other markets where they collect the sales tax/VAT (Value Added Tax) for their customers.

In fact, there are a lot of sites encouraging people to buy a lot right now, to avoid the tax collection…presumably, that advice is for people who haven’t been meeting their tax obligations up to this point. 🙂

That bump may help Amazon in the short run.

What do you think?

Note: I believe we don’t pay sales tax on e-books delivered electronically in California, so this doesn’t impact Kindle book purchases.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

Chris Christie supports equal collection

July 17, 2012

Chris Christie supports equal collection

I’ve written before about the issue of equal collection legislation.

The basic idea is that many residents of states don’t pay the use tax that they usually owe when they purchase items from out of state sellers.

It’s different with in-state sellers (such as your chain brick-and-mortar stores, or “Mom and Pop” stores). Those stores can be compelled by the state to collect sales tax at the time of sale.

Most people, I think, perceive this as meaning that you don’t have to pay sales tax on out-of-state purchases from places like Amazon, even though that’s not what it means. Oh, I suppose you don’t “have” to pay it, but you owe it in the same way that you owe income tax.

Different states have tried different ways to redefine things with so-called “Amazon laws”.

Amazon itself supports a national sales tax policy (not a national sales tax). They want all internet retailers to have to collect the sales tax at the time of sale. Why would they want that, when it presumably gives them a competitive advantage not to have to do it?

For one thing, they don’t want to be singled out. If they collect sales tax, other online retailers should have to collect sales tax the same way.

This has also been perceived as something Republicans would support less than Democrats. It is additional regulation on businesses: it may be perceived (again incorrectly) as raising taxes (rather than as changing the collection method).

That’s why it’s big news that Chris Christie, a leading light Republican, has supported equal collection:

Wall Street Journal article

Christie doing it may lead to other Republican governors supporting it.

However, it’s important to note that this is a deal between New Jersey and Amazon…it isn’t Federal regulation.

I also want to point out that there are people who think that having equal collection policies (however they are achieved) will right a wrong and allow brick-and-mortars to compete more fairly with online retailers.

I’ve said before (as a former bookstore manager); brick-and-mortars can’t compete with the internet on selection. I don’t think they can compete with it on prices (even with sales tax collection). Online retailers can charge for shipping, but I do think it is more efficient to be an online retailer in many cases. One big issue? No shoplifting. Yes, you’ll still have employee theft, but shoplifting is a much bigger issue than you think.

It will “level the playing field” a bit, though.

I’ll go back to my basic principle: people will shop in a brick-and-mortar, paying higher prices, having the inconvenience and expense of driving there, and having the smaller selection…because they like the people who work in/own the store and want to support them.

That’s the trick. I know, I know…it’s easier said than done.

“Another romantic lunacy.  We assume that a personality problem can be liquidated merely through an understanding of it – as though a man could lift a mountain once he admitted it was heavy.  No: recognition is not synonymous with solution.  I fly toward freedom as a moth toward the candle, and nothing so insubstantial as Reason will turn me aside.”
–Dr. Charles “Doc Bedside” Bedecker
written by Piers Anthony

While this is a very tough time to get anything passed at the Federal level, I could see how, if all the states had already required equal collection, the Feds would then step in to unify it.

States have a significant motivation to make this happen (they need the money), and Amazon has a significant motivation to guide the process so the impact affects them and their competitors evenly.

Are the days of no tax collection on internet sales numbered? Not numbered, I think…but an end seems likely.

Oh, I should mention (despite that being a good exit line) 😉 that most of the proposals I’ve seen for this have minimum sales thresholds. If  you sold your old bicycle on eBay, you might not be required to collect sales tax (the buyer would still pay use tax, I think). If you sold a thousand old bicycles, that might be different. Think of it selling just a few items like having a garage sale, in terms of enforcement.

What do you think? Will there be a national policy mandating collection of applicable sales tax on out-of-state internet purchases? Would that violate the interstate commerce clause? Does it matter for this issue which party wins the Presidential election? Is the current situation unfair? Feel free to let me and my readers know by commenting on this post.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

E-books and your annual taxes

April 15, 2012

E-books and your annual taxes

April 15th* is traditionally the day when our annual income taxes are due to the federal government in the USA.

Many of us also pay state income taxes by that day.

One of my readers and regular commenters, Lady Galaxy, suggested that I do a post about how e-books play into that…so here it is. 🙂

I had helped Lady Galaxy with a question regarding them, which sparked this.

Let me start out by saying clearly: I am not a tax attorney or adviser or an accountant. If you have any questions about this, consult with a tax professional and/or your appropriate tax authority.

For those of you outside the USA, you may still find this interesting. 🙂 We don’t do VAT (Value Added Tax), for example.

Oh, and each state does things differently as well. 🙂 Even smaller jurisdictions (such as counties and cities) may be involved.

One other thing: I’m talking in this post about how your purchases of e-books may impact your annual taxes, not money you might have earned from them.

Okay, all of that said, let me start out by telling you a bit about what we did in my family.

We live in California.

California, like many states, has provisions for residents to pay “use tax” on items that they bought outside of California, but used in California.

The use tax rate is the same as the sales tax rate.

My process?

I go back through our internet purchases for the year. I have to look at each one, to see if we already paid sales tax (if we did, we don’t have to pay it again).

The tricky part is knowing whether an item is taxable or not.

Not everything you buy in California is subject to sales tax.

Honestly, I don’t always know…when in doubt, I pay it. I remember hearing once that more people overpay their taxes that underpay them, and that makes sense to me.

Now, you might be wondering at this point…how would California know I bought, oh, floss from Amazon?

They don’t.

If I don’t report it to them, it’s not like there’s a W-2 on it.

If I got audited, though (knock virtual wood), and they found I had purchases where I should have paid and didn’t, I could be in trouble.

Here’s a key thing, and this is what helped Lady Galaxy (even though I think she’s in a different state).

E-books delivered electronically are not subject to sales or use tax in California.

I don’t have to pay use tax on my Kindle book purchases.

The Board of Equalization says:

” Sales and use tax applies to the sale or use of tangible personal property in California. Section 6016 of the Revenue and Taxation Code defines tangible personal property as “personal property which may be seen, weighed, measured, felt, or touched, or which is in any other manner perceptible to the senses.”

Just to make sure, I specifically asked them about use tax on e-books…again, they confirmed that delivered electronically, they aren’t subject to use tax. If I bought e-books on a CD, those would be subject.

Stressing again, check with your state and/or a tax professional.

My guess is that you’ll find that many states don’t charge use tax for e-books delivered electronically.

By the way, we ended up paying over $200 in a lump sum.

I’ve written pretty extensively before about “Amazon laws”, which are trying to compel internet retailers to collect sales tax at the point of sale, just like brick-and-mortar stores do.

Amazon supports a national policy on that…and so do I.

It would certainly make me doing our taxes easier. 🙂

I wouldn’t be paying any more taxes than I do…I just wouldn’t be responsible for figuring out how much they are, and I would pay them as the year went along, rather than all at once.

I don’t know that anything can get through the US Congress right now…but maybe after the Presidential election.

It would be a tough sell, though…it would end up in many people paying more taxes, even though people wouldn’t owe more taxes.

Well, if you are already paying use tax, what I hope you get out of this post is that you check to see if owe it on e-books before paying it.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

Amazon’s Paul Misener testifies before Congress on Equal Collection Legislation

November 30, 2011

Amazon’s Paul Misener testifies before Congress on Equal Collection Legislation

I’ve written extensively before about sales tax and Amazon.

Briefly summing up, some states have passed laws redefining what constitutes a “nexus” in their states. By doing so, they can declare that Amazon is doing business in their states, and can therefore by compelled to collect sales tax at the time of sale, in the same way that a brick and mortar store can be compelled to do that.

These laws have varied from state to state, and Amazon has changed how they did business in some states to stay outside the new definition.

Amazon has also supported a federal sales tax policy…not, to be very clear, a Federal sales tax. A federal sales tax policy would define at a national level what constitutes a nexus. The result would be that internet retailers would collect tax at the time of sale. That’s tax that has already been owed to states…you are usually supposed to report it on your annual state taxes, and it is often called a “use tax” at that point.

Believe it or not, that’s the simple version. 😉

In a

press release 

today, Amazon gives us the text of a statement made by the retailer’s Vice-President Paul Misener in front of the House Judiciary Committee.

It’s fascinating stuff…I highly recommend you read it.

Two of the interesting points are: Misener arguing for a low exemption value; and Misener calling out eBay for their objection to Equal Collection legislation.

The first one is one of the tricky points. Should someone who only sells one ten dollar item on eBay have to collect sales tax?

Well, the answer seems to me to be…sure, if they can do it reasonably. The software is there, and Misener suggests that eBay could do it easily enough for their sellers…and that Amazon would do it for their Marketplace sellers.

I haven’t had a chance to view any testimony yet, and there should be a question and answer session as part of this.

Will Equal Collection legislation pass?

It’s hard to say that any legislation will pass right now.

However, it would greatly benefit states. I’m sure many states have millions of dollars owed to them that isn’t being collected.

Senators represent states…it helps them politically to help their states.

They are, of course, elected by individuals…individuals who may not like it when more sales tax is collected (even if no more sales tax is owed than was before).

I’ll keep my eye on it…

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

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