I was wrong. You were right.

In doing a bit of further research on this, I've changed my mind in light of the Supreme Court's 1992 opinion in Quill Corp. v. North Dakota, 504 US 289 (1992). Looks like those of you arguing in favor of Amazon have a much stronger case than I gave you credit for.

I still do think we'll eventually see e-tailers lawfully compelled to collect sales tax, but I now think Congress will have to be "the decider."

I was wondering when Quill Corp. v. North Dakota would enter the discussion. I always thought that was what Amazon was using as the basis of their argument.

Keep in mind that even were Amazon to "win" and not have to physically collect taxes, the likelihood that they would have to provide the purchase data still looms heavily in the background. Most states that have sales tax statutes (I spot checked it) seem to have provisions for their residents to pay regardless of an out of state company collecting it for you. Truth be told, I'd rather they be collected up front than face state sanctions that come up later.

I also believe that the multitude of states (22?) that Amazon is supposedly working with to have some legal authority in requiring the company to jump through a few hoops but all of this was predicted before the internet became so popular. I'm not advocating any of this but my experience with the state regarding taxes is that sooner or later it/they find a way to get what they consider their due. Since the debate has now switched to "but Amazon can fight this in court" also begets the question regarding their desire to spend an awful lot of money fighting all of those aggressive states from what they generally have some lawful "standing" to claim. There are so many legal avenues for the states to attack with that the hassle is probably not worth fighting over though from a public policy angle, both sides of the discussion have plenty of points in their favor.

Maybe the compromise could be that internet retailers charge the amount of sales tax for the area they're in and ship that amount to the customers city/state. Otherwise, besides the nightmare of keeping up with every community's sales tax, I would imagine prices would have to rise to pay for the extra bookkeeping effort.

The U.S. Congress has been considering this issue, and each time they decide to leave it alone.
I guess that NYS's coming after Amazon because of all their e-sellers, affiliates, etc.
Here's an up to date excerpt:

"Then in 2008 New York became the first state to extend its definition of nexus to cover some web-only retailers, including Amazon.com. The legislature passed a bill, accompanying its budget, that said that web retailers have nexus in New York and must collect sales taxes if they have sales affiliates in the state who generate a combined total $10,000 a year or more in revenue for the retailer. (Sales affiliates are individuals or organizations that are paid commission for linking to the online retailer's web site. Amazon.com has thousands of sales affiliates nationwide.)"

Link to full report

Of particular interest to this discussion is that Congress has laid off on charging federal sales taxes on internet purchases by statute for a long time now thanks to that unpopular guy in office. When he moves on, the chances are the controlling party in Congress will again consider such taxes as a means of "helping the economy" and "lowering the deficit". With all the anti-IRS types out there begging for a "national sales tax", the idea grows stronger each day (albeit an easier sell for some than others). The possibility that they facilitate collection of state/local sales taxes first is almost a given too.

Who cares if they do - the state does not have the manpower nor would there be a cost / benefit to collecting such revenue.

You show me a politician that wants to go after a mother for sales tax on the handful of DVD's and Video Games she bought her kids for Christmas.

NY will loose! There is no question about it - and the feds will stay out of this - they do not want to promote a "patchwork" of laws / rules between states - that is why we are the "United States"

Well, you can believe that if you want to but more and more states are signing onto that cooperative agreement and passing legislation in support of it so I find your analysis questionable. The whole idea behind the cooperative is to provide some degree of uniformity in sales tax collection and suggesting that they won't "go after" particular groups of people due to unpopularity seems to fly in the face of so many other state actions that it hardly seems worth discussing it with you.

Let's see, most states have income taxes so that would be a pretty slick target, others could target licenses (including driving licenses, occupational licenses, car registrations, etc), still others could limit access to state services until the debts are paid. As far as applying cost/benefit analysis to the equation, how tough do you think it is for an automated system to link up and flag someone who has not paid up?

Historically speaking, there were those that said similar comments during the passing of the federal income tax ("they won't bother with the small fries") yet every year, scores of people are audited in a system that employs a great deal of bureaucrats with a vested interest in "catching you". How long will it be before they use the credit card companies to provide information on purchases? (guess what, they already do!) Suggesting any politician will run for cover on a potential revenue stream is akin to saying you can swim in shark filled waters because sharks don't like your particular blood type; believe it if you will but most of us seem to have differing experiences contrary to yours.

In any case, Amazon can't lose if they cooperate with established principles of the state codes; I doubt there are any states where they do not have a physical presence of one sort or another, though the trend is to consider anyone they have a contract with to be part of that "physical presence". I'm not advocating in favor of more taxes though, only pointing out that in times of diminishing resources and increased demands, politicians seem all too willing to justify their actions one way or another. In this case, it looks like Amazon is going to comply with the law rather than waste precious resources fighting endless legal battles so it's a moot point.

I'm not going to get into a pissing match - on this issue, because there is no ruling yet.

The state can send out all the automated letters they want - but how are they going to enforce it? They could put speed cameras on every road and send out tickets - but how are they going to enforce it? Are they going to hire thousands of sheriff deputies to serve people and enforce judgements, judges to hear cases and garnish wages, build court houses to hear all of these cases for $170 in tax revenue, and what if people don't pay - should we let that crack dealer out of jail - so we could lock up a wage earning individual for 3 days?

Some people are passive and just accept that government will do what they do, others are more aggressive and won't accept government walking all over them. I hope that there are more of the latter or else our Country is doomed to fail over time.

Except for the fact that the amount of income tax we pay as individuals is far more than we would pay in sales tax if we lived in Washington...

I wasn't referring to automated letters, I was referring to a variety of means the state (collectively) can enforce its will. I remember when the Selective Service started back up decades ago, I was notified by my commanding officer that I had not registered; both of us laughing about it in our BDU's. He told me that I should send in a card since I expected to one day use a college educational benefit, a benefit that could have been denied me had I not done so. Would I have been able to gallantly fight for my rights? Sure, at great expense without hope of recovering expenses and delaying by years how long it would take to get the benefits. It's not about sending people to jail but to suggest this is all over $170 in taxes or jail time is to ignore far too many precedents established (including ruining your credit, limiting what kinds of loans you can get, and a host of other means by which they can ultimately influence your behavior).

Exactly why you are equating this with personal freedom since it is highly likely that any such tax is one you are already legally required to pay on your own makes me curious though. Do you think you can avoid all civic duties without penalty? Didn't Wesley "I'm in jail" Snipes cop a similar attitude? If you don't like Amazon's voluntary compliance with the program, shop elsewhere starting 6/1 but the writing is on the wall about states getting their due.

True - they could put this on your credit report or something else - but they don't do that with delinquent taxes or parking tickets.

Amazon has to comply - but they are taking NY to court, which is the reasonable thing to do.

I do not think that I could avoid civic duties - but there is only so far you can push people. My share of taxes could support a couple of good sized families or a small 3rd world country - but there is only so far that the people (or myself) will let the government continue to spend $ like they have a blank check.

Yes - I agree that I may not shop with Amazon until the case is settled - time will tell. - I may change my address and start sending "gifts" to myself

Some states already do this.

I know a few people who were buying cigarettes over the internet from Indian tribes in order to skirt paying the state taxes on the cigarettes.

They ended up getting bills from their state for several hundred (and in some cases, several thousand) dollars in back taxes.

Again, I'm not advocating that a particular state take an enforcement action against those who seek to avoid paying their sales tax but I've seen so many cases where politicians/bureaucrats/community activists took the attitude that "if we just had more money for...". Look at the thread in Politics that links to a game where you play the budget king as an example. According to the numbers of people posting (and on the website itself), a LOT of people spend more money on pet projects. Almost everyone I've ever discussed how to spend tax money with has had distinctive ideas of how to spend other people's money, always needing more to shape the world the way they want it to be (some favoring more educational gifts, others wanting to enhance the environment, still others thinking certain groups should get better tax breaks, etc.).

Heck, impacting credit reports would suck big time (having an 800+ score helped me get a great interest rate that would not have been possible if I had issues on the reports that were checked) or withholding my ability to get a driver's license (I need one to get to work), put leans on my home, or any one of a hundred other means at their disposal. They have what amounts to a moral high ground too since our own states enact these measures where sales tax is owed regardless of who collects it. There has long been pressure from local retailers to even the playing field too, my area adding 8.25% tax on top of all the additional costs a B&M store incurs.

One of the problems with such discussions is that all of us have differing ideas as to what is the right amount of taxes, what we want for our money, and all the other concepts bandied about. I'm interested in the subject as a matter of public policy; generally thinking we pay too much in total taxes but understanding that people want rebates, services they didn't pay for, and all the trimmings on the cheap. I wish Congress would take a stance (one way or the other) but I haven't seen a lot of long term fiscal responsibility from either political party so I'm not holding breath for sanity out of nowhere...

I was in a resteraunt a month or two ago and a table near mine was discussing how you were supposed to report and pay taxes on on-line purchases and all of the 4 people sitting there said they have never done this.

I really dont understand why it would be so hard for etailers to charge the sales tax for each state. Walmart, Best Buy, Amazon and other on-line places do where they have to. Could it really be that hard to do? They have tax preparing software that I guess can do every state, I have never used one though.

I kind of hate with what could happen, like a state passing a law requiring etailers to turn over back records for purchases made since the internet's began and the courts that be agreeing.

I agree. no one wants to be the bad guy in Congress and tell the kids they can't have that.

The problem is that it's not just every state. I happen to have a job where I have a copy of the NYS Sales Tax "cheat sheet"- there are 82 different sales tax rates based on county or city, and they change all the time.

Looks like Newegg fell for this law and is now charging tax.
Lost me as a customer.

What are they supposed to do? Ignore it?

They are not a business in NY. They are not bound by NY laws, including tax laws.
NY can charge me the tax, because I live here, but not anyone outside the state where the transaction takes place outside the state.
All newegg has to do, is have a disclaimer sayign you have do declaire this purchase on your NY State tax return. That's all they have to do... and they are fools for doing otherwise. NY state can't even collect taxes on Indian reservations that it passes laws saying they have to pay.... I doubt they have any inclination to pursue it outside of the state.

Amazon is doing the same thing, so I don't see why you expect a much smaller company with more to lose to do what Amazon won't.

Fight this Amazon, fight it.

He never said he did it.

Does anybody do it? I mean, what form would you even use?

In NYS it's right there on the regular income tax form you're required to file every year. They're getting aggressive about it.

FYI-
Newegg was sued by NYS along with Amazon and only 1-2 other e-tailers. The AG's office looked at some numbers and targeted the largest merchants who weren't collecting taxes from NYS buyers. Newegg didn't unilaterally decide to change their position, they were sued.