Overstock's Patrick Byrne battles New York Sith Lord

Unwilling to collect the Empire State's new "Amazon Tax," Patrick Byrne and Overstock.com have jettisoned their New York-based affiliate marketers. Late last month, New York Governor David Patterson rubber stamped a $122bn state budget that attempts to collect an additional $50m in sales taxes from various online retailers. …

[Anonymous Coward]

In the EU similar problems are solved easily

For instance, Hungary puts up taxes on companies, so quite a few companies close Hungarian offices and open similar in Slovakia (it has a far more favourable tax regime).

Perhaps Amazon and others should not argue the decision and merely (with business efficiency) observe it. Any consequential losses to New York State will in all probability be swiftly followed through by a repeal of sorts. If, as in th UK, local authorities see revenue streams as compromised r nullified into non-existence than they usually act swiftly. Then there are also the sooth-sayers planning budgets on expected/predicted insomes that no longer exist = (usually) an improper and usually illegal state budget.

[Jay]

Wait a minute...

without "The Big O", New York would be toppled. Who would visit New Yrk?

[Alan Donaly]

I can see Patricks' point of view.

The business case is one reason, but the fact the state is losing money from failing financial services makes it loathsome to replace it. I think he views Wall Street as nest of vipers and New York is a place very friendly to vipers. I do think as more business is done online that taxes are going to have to be collected however this might be especially hard to take from NY.

[Damien Jorgensen]

RE: In the EU similar problems are solved easily

That is not the same thing, as an EU based retailer you need to charge VAT to everyone in the EU that isnt VAT registered. And where people find a loop hole they just change the law to ensure you cant do it any more. i.e. the channel islands and online purchases

[Anonymous Coward]

@Jay

I certainly wuldn't.

[Frank]

@Damien re. VAT

In the UK, all companies that are VAT registered have to charge VAT (at 17.5% usually) to *everyone* they sell goods and services to. If you are registered for VAT then you can claim it back from the Government as a separate and later action. Hence at the end of the chain it's the ordinary member of the public who pays VAT on their retail purchases.

As for the Channel Islands, I bought goods via mail order from a Channel Islands based company and they made a point that they didn't charge VAT since they are based in the channel islands. Has this situation changed?

[Mark]

It's easier for a company to move than its employees

So can I move from the UK to slovakia? No, I need visa and passport and I'll be treated as a resident alien.

Companies? Welcomed with open arms.

Oddly enough, that's because the companies are supposed to be brining in tax revenue and so on (so why are the complaining?).

[Jeff Deacon]

Re: @Damien re. VAT

Frank wrote: "As for the Channel Islands, I bought goods via mail order from a Channel Islands based company and they made a point that they didn't charge VAT since they are based in the channel islands. Has this situation changed?"

Its quite a while since you bought anything from the Channel Islands! Yes, there is now a special scheme, whereby they collect VAT on everything they sell to the UK, and then pass it to the UK Exchequer. And as someone else has pointed out, you cannot buy software on line from the main selling agents without paying the VAT (which is apparently even due on all imports).

VAT is an EU wide tax, run by the people who have not had their financial books approved by the auditors for 14 consecutive years.

[Anonymous Coward]

Baby Killers!

Not paying tax=killing 5.6 million children in developing countries.

Doesn't Amazon and OverStock realise that any attempt to avoid paying tax puts them in the same bracket as Hitler, Stalin, Paul Pot and King Leopold II of Belgium??!!!

http://www.independent.co.uk/news/uk/home-news/tax-evasion-costs-lives-of-56m-children-826252.html

Skull and Bones for obvious reasons...

(oh, and no - I don't buy the Christian Aid line either...)

[Jack Harrer]

Re: Re: @Damien re. VAT

You don't need to pay VAT as long as purchase price is less than £17.

Go to picstop.co.uk and check their explanation. They have their warehouse in Isle of Jersey, from where you can buy tax free. I believe that restriction doesn't apply to rest of EU, although I'm not sure.

[Peyton]

@Baby killing AC

Amazon and Overstock don't *pay* the taxes - they *charge* them. In the US, when you purchase something online tax-free, you are supposed to declare this on your yearly tax filing and pay then. I didn't bother reading your posted link, but if anyone is killing babies, it's the tax-dodging consumer, not the etailer.

[Anonymous Coward]

Overstock wrong, Amazon right.

Amazon have realised they have to fight this case now, because if it isn't overturned in New York, other states will follow suit. Patrick Byrne is probably being pragmatic, but his "official" stance is misguided; pulling affiliates from NY is one thing, but how will he feel when he has pull affiliates in 20 states, or 40?

Personally I think the whole "no sales tax on online transactions" thing is ridiculous, but Americans are touchy about that whole "no taxation without representation" thing. Maybe they should make online sales tax a federal tax, you know , to pay for ill-advised middle-east adventures and stuff.

Mine's the one with tea in the pockets.

[Anonymous Coward]

taxation without representation

Well, that one went out the window a long time ago. Years ago I worked in Cincinnati (Ohio) area with some folks who lived in Kentucky and they had to pay city AND state taxes for where they lived AND where they worked and certainly didn't get to vote on BOTH of those issues. Even now, where I live, I have no city tax, but have to pay a city tax where I work (and where I don't get to vote). Yes, it's wrong; and no, it's not bloody likely to change any time soon as most of the loonies here aren't ready to make the proper radical change in government like they did a couple of hundred years ago.

[Kosta]

economic slowdown

With the economy slowing and inflation rising Americans are turning to wholesalers etailers and discounters. It's been noted that people are also avoiding driving to stores and purchasing online to avoid rising fuel costs in addition to sales tax.

Right or wrong with regard to not paying sales tax on mail or online purchased goods, in the end what makes and breaks Amazon are their low prices and razor thin margins. NYS sales tax will make them less competitive with regard to other etailers: for example right now they may have similar prices with newegg on computer gear, but post sales tax they may not.

NY is a pretty huge market and I am sure Amazon doesn't want to get pushed out of it through the "Amzaon Tax." Especially just as the economic contraction and inflation make the prospect of purchasing from online etailers more attractive than ever before.

[David Patch]

Dumbazz Analysis

"Byrne estimates that Overstock's New York affiliates account for less than 1 per cent of the company's total sales - and maybe as little as a half of one per cent. So that's what the company's giving up while Amazon goes to court."

Cade, are you for real? Overstock.com does not "give up 1%" of their sales by eliminating NY Affiliates, they lose the advertisements from these affiliates. Have you thought of how many NY'ers will not shop at Amazon because of the added tax and who will shop around and find that Overstock may carry the same item for significantly less? Have you thought of how many of the affiliate sales are repeat buyers through these affiliates and they did not suddenly fall into memory loss because teh overstock link is no longer on the affiliate site.

It is clear by this article that your intention was less about presenting logic as it was to simply smear Overstock. While Amazon spends capital in the courts and while Amazon taxes their NY buyers Overstock gets a free ride on the lawsuit and the opportunity to pull in new buyers through non-taxable items comperable to Amazon. Do you pay 10% more than you have to for the same items?