Not true! Amazon already has all of that obscenely complex logic coded up!
Amazon allows third party vendors to sell through Amazon. Amazon knows for each vendor of what states they are resident in, and properly collects sales tax in that company's behalf where that is required.
And for a select few of those vendors, they do have sales tax modules. For another quantity of people, they just bake sales tax into the cost of the item:
And yet somehow companies like WalMart and Target manage this terrific feat.
It'd be better if there were a unified system of national sales tax. But for a company Amazon's size, it's a laughable idea that it's somehow impossible to do this magnificent feat of implementing a lookup table.* The hard part is keeping things up to date, but a good faith effort to do the previous would get Amazon pretty far.
*I worked for a company that is a thousandth Amazon's size in revenues, but it managed to do it for the whole state of California. It genuinely can get complicated--zip codes can cross county lines, for instance--but again, far from impossible, and when this becomes widespread third party solutions will pop up a lot more.
I have no idea why you were downvoted. If the dudes running walmart.com can write code to figure out the appropriate sales tax for each item, the dudes at amazon.com should be able to as well.
Naturally, lots of people are pissed off at this turn of events. For good reason, too--everyone's losing here, including the State, Amazon, consumers, and various developers and start ups. Even the shadowy backers of the legislation (WalMart, Target, etc.) don't win an even playing field, because Amazon still isn't going to pay sales tax.
Since many people's livelihoods are very threatened by this frack-up, it's not too surprising that there'll be some itchy fingers.
More than 50 since many counties and cities impose their own sales taxes, on top of whatever the state levy is.
There's also the complication of what items are taxable where. Clothing, for example, has seen a recent trend of exemption from sales tax in some jurisdictions. There's also sales tax holidays, where a state or county suspends its sales tax on some categories for a week or whatever to spur consumer spending. Finally, there will be weird corner cases like what happens if an item is bought, then returned at a later date after a change in the sales tax levy?
It all becomes very complicated to track and implement for an online system. An entity the scale of Amazon could certainly do it if they want, but it may not be cost-effective.
actually there are far more than 50, as many counties and municipalities have their own sales tax rates on top of their state's rate. not only that, but it is far more complex than just one fixnum per jurisdiction as each is able to establish rules on what is taxed and what is not. the prime example is food, where the local laws on what counts as non-taxed food always seem a bit byzantine.
They have local managers for every region and sub-region. Amazon doesn't have a manager assigned to Sonoma County to make sure that everything's on the up and up regarding Sonoma County tax laws. Amazon's actually much better equipped to handle the problem because of their size. It would be a real nightmare for a small site that can't afford even a single full time accountant.
Hundreds of them. Anyone can set up a copy of iDevAffiliate (and many do), and thousands of small businesses have programs run through networks like ShareASale, Clixgalore and CJ. You can start a professionally managed 3rd party affiliate program on a network for $75-350.
There are hundreds of thousands of products with affiliate programs on ClickBank. Most of them are info products and software being sold by an individual with no employees.
Note that brick and mortar retailers only have to know the taxes which apply to each of their locations. While this is a lot of different locations for a big chain, it's far less than knowing the taxes for the location of every single customer.
To put it more concretely, Best Buy has to manage sales tax for ~1000 stores, but Amazon has to manage sales tax for ~100 million customers.
Both national retailers and Amazon probably have the capabilities to do this, but equal protection clause states that you can't single out a single entity with a law. Would you have computing this be a barrier to entry for anyone who wants to sell over the internet? Especially as services and digital goods might also be considered taxable under certain jurisdictions.
I see your point that this could be a problem, but it's also a problem that brick-and-mortar shops have to pay tax while Amazon doesn't, no? Equal protection (or competitiveness) goes both ways.
Neither have to pay the tax, it's just a question of who the state can compel to collect the tax on behalf of customers. The real tax evaders here are the customers, who are required to pay a use tax for out of state purchases. Of course, clamping down on this is political suicide so it doesn't happen.
I think the classical argument as to why the brick and mortars have to collect is because they actually see a benefit from the local government in the form of police, fire protection and transportation in a way that Amazon does not (at least not directly).
The real tax evaders here are the customers, who are required to pay a use tax for out of state purchases. Of course, clamping down on this is political suicide so it doesn't happen.
Actually North Carolina tried to do exactly that. They did a tax audit of Amazon, and tried to get Amazon to turn over records as a part of that which would let them go after state residents for owed sales tax. The case went to court and was settled last February in Amazon's favor. Amazon wound up giving North Carolina detailed records of every item shipped to a North Carolina address, but with all personal identifying information stripped so that North Carolina could not figure out who had purchased what.
Chicago has local sales taxes in addition to the state-wide sales taxes. Sales tax is a complicated mess and that's why Amazon doesn't want to get involved. A consistent sales tax across all states (something Amazon is in favor of) would go a long way to make everyone happy (except maybe consumers).
