Legal Issues

by Mike Masnick


Filed Under:
taxes, texas

Companies:
amazon



While Texas Politicians Claim $600 Million 'Lost' In Uncollected Online Sales Tax... It Means $600 Million Texans Saved

from the that-money-doesn't-disappear dept

We've already covered the ongoing dispute between Amazon and the state of Texas over uncollected sales tax for residents there. Apparently, a state politician complained about how the state loses $600 million a year because out-of-state online retailers don't have to collect sales tax. However, as Jim Harper correctly points out, shouldn't people be pointing out that this actually means that Texans saved $600 million per year because of the government's inability to tax them on it?
What happens with the $600 million depends on what you mean by "Texas." If you mean the government of the state of Texas in Austin, why, yes, the government appears not to collect that amount, which it wants to. If by "Texas" you mean the people who live, work, and raise their families throughout the state--Texans--they actually save $600 million a year. They get to do what they want with it. After all, it's their money.

The Texas tax collector is complaining because the last thing state taxing agents want to do is collect money on in the form of use taxes, which means something like going door to door to collect money from voters based on what they bought from out-of-state. Revenuers intensely prefer to hide the process, collecting their residents' money from out-of-state companies.
A good thing to remember in these discussions.

Reader Comments

Subscribe: RSS

View by: Time | Thread


  1. identicon
    Thwacht, 15 Feb 2011 @ 7:54am

    Re:

    I'm not sure that would work. Texas has 6.25% state sales tax, and California has 8.25%, but Alaska, Montana, New Hampshire, and Delaware have no state sales tax at all.

    Under your plan, Amazon/New Egg/etc could just set up a small "shipping office" in Delaware and charge the local sales tax from there -- which is nothing.

    According to the story, that's how much the State of Texas is getting paid already. If this is the problem, I don't think you've solved it.

    Texas doesn't get the $600M it thinks it's owed, and Delaware doesn't really gain anything either, except for whatever small, indirect boost there might be from having that single, skeleton-staffed shipping office operate in the state.

    As the story points out, no tax can be charged the retailer for moving its own merchandise from state to state, so Amazon/New Egg/etc can claim to ship from anyplace they have a brick-and-mortar office, can't they?

Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Use markdown for basic formatting. HTML is no longer supported.
  Save me a cookie
Follow Techdirt
Techdirt Gear
Shop Now: Techdirt Logo Gear
Advertisement
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Advertisement
Report this ad  |  Hide Techdirt ads
Recent Stories
Advertisement
Report this ad  |  Hide Techdirt ads

Close

Email This

This feature is only available to registered users. Register or sign in to use it.