September 8, 2011 archive

Sep 08 2011

Saving Face on the Amazon Internet Sales Tax Flap

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Not so much.

Just 48 hours ago, the online retailer Amazon was doing battle against California to save the new economy from the tyranny of taxation. They were spending millions on a referendum to block a piece of the budget. They were fighting off a supposed legislative dirty trick to prevent such a referendum. And they were arguing that high principle and jobs were at stake.

Now, well, in the words of the 20-year-old Nirvana album: Never mind.

Amazon’s deal to end its referendum – in exchange for a one-year delay before it begins paying sales taxes – was designed to save face. But this was a deal in the same way that the deal the Japanese signed on the U.S.S. Missouri was a deal. It was a surrender, by an utterly vanquished company.

Has any company so bungled relations with a state?

I never did understand the referendum gambit and felt that Amazon.com would be more successful in federal court.

But, then again, I did not know about the 7/11 store distribution plan either. In the end, it was simply about money and not principle.

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Sep 08 2011

California State Senate Passes Prison Cell Phone Bill

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This is long overdue and Governor Arnold Schwarzenegger should not have vetoed last year’s cell phone legislation.

State lawmakers Wednesday moved to outlaw cellphones for state prisoners and advanced a measure to award special treatment to a proposed football stadium in Los Angeles.

Contraband cellphones have proliferated inside California lockups in recent years as inmates have paid up to $1,000 for the devices to communicate with the outside world.

“We know they’ve been used to organize street gangs, traffic drugs and intimidate witnesses,” said state Sen. Alex Padilla (D-Pacoima), author of the bill, which the Assembly approved 74 to 0.

Smuggling of cellphones into prisons would be punishable by up to six months in jail and a $5,000 fine.

The state Senate has already approved the measure, SB 26. After technical amendments in that house, it is expected to go to Gov. Jerry Brown, who as attorney general was outspoken about the dangers posed by inmates with phones.

As I understand, the feds have banned the use of blocking cell phone signal equipment. This, would, of course, be the most expedient way to keep prisoners isolated from the outside world.

But, blocking cell phone signals makes too much sense and so prison guards will continue to waste their time and taxpayer money searching the cells of the inmates.

I wonder if California prison officials have been successful in deleting those Facebook pages of their convict inmates?

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Sep 08 2011

Dilbert September 8, 2011 – Communicate

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Dilbert.com

Dilbert by Scott Adams

No doubt…..
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Sep 08 2011

Update: Amazon.com Makes a Deal to Delay Collection of California Internet Sales Taxes

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+++++Update+++++

Just a few additional thoughts on the Amazon.com deal. There is this piece.

An agreement would essentially mean that California would lose out on more than a year of revenues but have the certainty of taxes thereafter.

“It’s a good deal,” said one source who was involved in the talks. “All those uncertainties are gone. A referendum, whether they’d win a referendum, whether we could get the votes, whether we’d have to get involved in a big fight. No worries about litigation.”

All sides planned to get together to finalize details Thursday, one source said.

I am just wondering if this business venture between Amazon.com and 7/11 stores would create a California nexus anyway and of course, there is the issue of the Kindle Warehouse.

California Democrat Legislators will have to find a replacement for this year’s $ 200 Million they budgeted from the collection of these taxes, but next year they will get their hooks into California taxpayers.

In what looks like a sell out to Californians who will end up paying these taxes, Amazon.com has cut a deal to avoid a costly referendum election and federal litigation over the issue of tax nexus.

In a deal with state lawmakers and brick-and-mortar stores, Amazon tentatively agreed Wednesday to stop fighting a requirement that internet retailers collect sales tax on California purchases.

Under the handshake deal, Amazon won a delay until at least September 2012 but will eventually collect state sales taxes.

The arrangement could lay the groundwork for a national online sales tax law. Amazon and major brick-and-mortar retailers like Wal-Mart and Barnes & Noble agreed to lobby Washington over the next 11 months for an internet sales tax law that applies across 50 states.

“Basically, Amazon will get a safe harbor to lobby Congress and the retailers will go hand-in-hand with them to adopt a law that will apply to all of the states,” said Assemblyman Charles Calderon, D-Whittier, who worked on the compromise.

If no federal deal emerges by July 31, 2012, Amazon would have to begin collecting California sales taxes starting on Sept. 15, 2012. State lawmakers intend to pass a new bill in the next two days that would delay implementation of the online sales tax law until that date, according to Calderon and several sources.

If Congress strikes a deal by July 31, 2012, online retailers would begin collecting taxes starting on Jan. 1, 2013 under whatever federal requirements are approved.

Good luck with federal legislation to raise/collect taxes in the Congress in a Presidential election year. So, I am wondering if this is a stall game for Amazon.com and whether they have been planning to develop a tax nexus in California anyway.

I cannot see how this will “deal” will benefit Californians who will now seek out and buy from internet sites that do not collect sales taxes at point of sale. Of course, California taxpayers are supposed to pay “use tax” on those purchases, but who will police that?

As a business strategy, maybe Amazon.com has earned a monetary advantage over other retailers for a year or so. For Californians, it means more money out of their pockets to be delivered to the “money pit” of Sacramento politics.

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Sep 08 2011

Amazon.com Makes a Deal to Delay Collection of California Internet Sales Taxes

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California Democrat Legislators will have to find a replacement for this year’s $ 200 Million they budgeted from the collection of these taxes, but next year they will get their hooks into California taxpayers.

In what looks like a sell out to Californians who will end up paying these taxes, Amazon.com has cut a deal to avoid a costly referendum election and federal litigation over the issue of tax nexus.

In a deal with state lawmakers and brick-and-mortar stores, Amazon tentatively agreed Wednesday to stop fighting a requirement that internet retailers collect sales tax on California purchases.

Under the handshake deal, Amazon won a delay until at least September 2012 but will eventually collect state sales taxes.

The arrangement could lay the groundwork for a national online sales tax law. Amazon and major brick-and-mortar retailers like Wal-Mart and Barnes & Noble agreed to lobby Washington over the next 11 months for an internet sales tax law that applies across 50 states.

“Basically, Amazon will get a safe harbor to lobby Congress and the retailers will go hand-in-hand with them to adopt a law that will apply to all of the states,” said Assemblyman Charles Calderon, D-Whittier, who worked on the compromise.

If no federal deal emerges by July 31, 2012, Amazon would have to begin collecting California sales taxes starting on Sept. 15, 2012. State lawmakers intend to pass a new bill in the next two days that would delay implementation of the online sales tax law until that date, according to Calderon and several sources.

If Congress strikes a deal by July 31, 2012, online retailers would begin collecting taxes starting on Jan. 1, 2013 under whatever federal requirements are approved.

Good luck with federal legislation to raise/collect taxes in the Congress in a Presidential election year. So, I am wondering if this is a stall game for Amazon.com and whether they have been planning to develop a tax nexus in California anyway.

I cannot see how this will “deal” will benefit Californians who will now seek out and buy from internet sites that do not collect sales taxes at point of sale. Of course, California taxpayers are supposed to pay “use tax” on those purchases, but who will police that?

As a business strategy, maybe Amazon.com has earned a monetary advantage over other retailers for a year or so. For Californians, it means more money out of their pockets to be delivered to the “money pit” of Sacramento politics.

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