On 3/16/2014 12:13 PM, Nathan Wajsman wrote:
> Similar issues had to be ironed out within the EU. If I buy something from an
> online shop in, say, Denmark, should I pay the VAT at the Spanish rate (21%)
> or the Danish one (25%)? The way it got solved within the EU is that you pay
> the VAT rate of the country where the shop is located (so 25% in the example
> above). This way the complications you describe below disappear.
You make it sound simple. But it isn't always so. Part of Amazon's business
model, which make it a giant, was location
in states with no sales tax. For many years, they had a huge
warehouse/distribution center near Reno, just over the
border from Norcal. One or two day delivery here, even on ordinary shipping,
and 9+% of purchase price saving on tax.
Legally, you were supposed to voluntarily pay a 'use' tax, equal to the sales
tax, but that was unenforceable.
Their strategy was similar everywhere, ship from low/no tax places into higher
tax locales. Over the years, they got
into protracted legal battles with various states. In many cases, the issue of
contention was the small vendors
physically located in the state in question and selling through Amazon, which
the states argued gave Amazon a physical
presence, and made them subject to collecting tax on all their sales.
Amazon cut loose their local affiliates in some small states, thus hurting a
lot of small/individual businesses. But
they eventually came to terms with some states with huge populations, and thus
sales. With Calif., they reached an
agreement that the state wouldn't require them to collect tax for another year
or so. This gave them the opportunity to
establish in-state logistics for their 'free' two day Prime shipping, as a new
For tech stuff, one may still avoid taxes by buying from the big NY places ,
such as B&H, but their free shipping is
8-10 business days, vs. 2 from Amazon (1 to 3, in practice, where I am.)
Their other strategy is the 'Fulfilled by Amazon' program. I'm seriously
considering buying an iPad mini. If I buy it
from Amazon themselves, NewEgg, or from a seller physically located in CA and
selling through Amazon, I pay over $50 in
sales tax. But there are sellers outside the state, selling through Amazon,
whose inventory Amazon warehouses and ships,
as a fulfillment house, and for which taxes are not collected.
In the EU, I don't believe you have any countries with no VAT? So the
differences are relatively small. And do you have
any EU wide giants like Amazon, large enough to fight the country/EU in court?
It's the Wild West out here! :-)
Buffalo Will Moose
What if the Hokey Pokey *IS* what it's all about?
Themed Olympus Photo Exhibition: http://www.tope.nl/