Best Buy Downsizing.

[televisionarchives]

What you're seeing all around the country is some damage that the internet companies are doing to this country. Amazon and other online sellers do have a unfair advantage . Not only the sales tax but the overhead. At least your local business employees people. I notice Walmart being attacked and yet Amazon is not . I wonder how many businesses Amazon has effected. Some businesses have no choice. They have to have a store front. And they also have to pay sales tax, employees, insurance etc.

 

[jayn_j]

What you're seeing all around the country is some damage that the internet companies are doing to this country. Amazon and other online sellers do have a unfair advantage . Not only the sales tax but the overhead. At least your local business employees people. I notice Walmart being attacked and yet Amazon is not . I wonder how many businesses Amazon has effected. Some businesses have no choice. They have to have a store front. And they also have to pay sales tax, employees, insurance etc.

Amazon reported $34B in revenue in 2010. Taking some VERY rough and conservative numbers: $34B/50 states = $680M/state (average). Figure an average sales tax of 6% (low) = $40.8M lost income tax revenue.

Now look at a sampling of middle of the road states like Washington, Kansas, Wisconsin and see that the average budget deficit is around $100-150M. So the Amazon revenue could make a serious dent in that amount.

Any conclusions I can make would move the thread to Sonic, but anyone can see the amount is significant to state budgets.

 

[diogen]

I believe this logic has the same faults as RIAA and BSA use when talking about P2P.
In this case it would be: every Amazon sale means lost B&M sale.

It isn't.

Diogen.

 

[dangue]

I believe this logic has the same faults as RIAA and BSA use when talking about P2P.
In this case it would be: every Amazon sale means lost B&M sale.

It isn't.

Diogen.

I have to agree. When shopping, amazon tends to price very aggressively on the things I purchase. Even if sales tax were collected, I'd still come out ahead. You also have to factor in not dealing with crowds at stores and other similar conveniences.

Extreme case in point: Shopping on Black Friday from home sure beats the madness of being in line at 3am.

Sent from my iPhone using SatelliteGuys

 

[jayn_j]

I believe this logic has the same faults as RIAA and BSA use when talking about P2P.
In this case it would be: every Amazon sale means lost B&M sale.

It isn't.

Diogen.

No, not what I meant. It is an argument about the fight Amazon is having about collecting sales tax for all transactions. These sales are occurring. I'm not saying that they need to be B&M, just that perhaps Amazon purchases need to be treated the same way and close the loophole that gives them an immediate 6% advantage.

 

[diogen]

Both ways of selling stuff has pros and cons.
Dell was online ONLY for over a decade and then started appearing in B&M. Hence, there are some advantages...

Leveling the playing field is a good idea but killing the golden eggs goose isn't...

Diogen.

 

[dangue]

No, not what I meant. It is an argument about the fight Amazon is having about collecting sales tax for all transactions. These sales are occurring. I'm not saying that they need to be B&M, just that perhaps Amazon purchases need to be treated the same way and close the loophole that gives them an immediate 6% advantage.

I honestly think that any such Internet sales tax should be imposed at federal government level. One tax rate for online companies to deal with rather than tens of thousands of different rates across different states, counties and cities. Rates that are subject to change frequently with the expiration and or addition of temporary local sales taxes. Proceeds should still be remitted to the local governments just as regular sales tax is. My apologies if this turns the thread into Sonic appropriate material.

Sent from my iPhone using SatelliteGuys

 

[mike123abc]

Sales tax rates are very difficult for a company like Amazon.

One might say for example Dish collects sales taxes where required nation wide. But, they essentially have one product and can figure out how it is taxed.

Amazon has a completely different and rather huge problem Not only are there approximately 3000 different taxing entities in the US, but there are also complex and varying rules on what is taxed. In some places food is not taxed unless it is a snack food and the definition of snack food varies. Basic clothing is not taxed in some areas, but other types of clothing are taxed. Some machines are taxed but not others.

Then you have location issues. In some areas one side of the street is taxed differently than across the street. Address boundries of all the taxing zones would need to be known. A store knows where they are located and charges customers on the tax rate at that location because the customer comes to the store and makes the purchase. Amazon would have to know the tax at each of its customer's delivery address.

Amazon's big problem is that they would have to know how each of their products would be taxed in each jurisdiction. Amazon sells virtually everything and there would be a huge need for a constantly updated database.

If congress wants to do the sales tax on mail order they would have to force locals to probably come up with statewide rules on what can be taxed and limit tax rate changes to like once a year published 6 months in advance.

 

[televisionarchives]

Sales tax rates are very difficult for a company like Amazon.



Walmart Does it. Target does. If you order online from them they charge you sales tax. Amazon is already making a huge profit and it's easy to see why they make that money when they don't have the overhead that other companies have.

 

[Steve Mehs]

As my mentor Dave Ramsey proves, there is no such thing as "same as cash". One way to prove that to yourself is to walk into the M&P with cash in hand and make your best deal on the same item that's offered at BB on the SAC deal. You very well may beat that BB offer (which in all likelihood is not negotiable) when you wave real cash in front of the owner...!

I’m taking this a little off direction for a sec, but I couldn’t let this go.

Personally I think Dave Ramsey is a buffoon. He’s making money telling you how not to spend yours. I didn’t get my TV from Best Buy, I bought it from Tiger. At the time Best Buy wanted $2800 for my TV, then they dropped the price down to $2200 about a month ago, local mom and pop shop wanted and still wants, retail, $3500, I bought it on Tiger for $1800, no tax, no shipping. Now not only did I get half off the TV, paid no tax, but I also gained 1800 reward points on my Bank of America Visa Signature. Why the hell would I want to buy something with an outdated medium of payment, aka cash aka physical money, when I can put it on credit and gain points that accumulate to give me cash back? I’ve had my current credit cards for two years (previous ones only offered hotel rewards which I never used) and I’m about two months away from getting my second $500 check cut to me. That’s $1,000 for spending money I would have normally spent anyhow but putting it on plastic. Two years ago this month I went 100% cash free (not a single cash purchase in 2 years) and have never been happier and have an extra grand to my name to show for it and as a whole my finances are better off. Tell Ramsey to shove that in his pipe and smoke it!

I also bought my speaker set up from Tiger at the same time. Saved over $200 in taxes between the two purchases by buying online. And there is times where Amazon is cheaper, I paid $270 for my Sony 3D Starter kit, no tax, but I did have to pay something like $10 for shipping. Most places want $400 for the starter kit. Here's some math. The retail value for my new set up (not including cabling and stand) was $6,750 + $590 in taxes for a total $7,340. I paid $4,480 + $162 in tax that’s a total of $4,642 or a savings of two ticks below $2,700 by not buying locally.

And if you don't mind me asking, which Sony ES receiver did you get and is it current generation? If so is it the 3600, 4600 or 5600 and how much did you pay?

 

[bhelms]

My ES is 3 gens back, the 5300. Was in the package at a bit north of $1,100 if memory serves, retailed for $1,600 IIRC. Has served me well for almost 3 years, but I'm a Sony fanboy so factor that in.

Sorry for the OT diatribe: As far as Ramsey goes, don't knock it if you haven't tried it! I did a LOT of what you described, put well over $200K on plastic (CCs) over 4+ years (everything I possibly could including my son's tuition) in order to reap the "rewards" on 3 programs, and never paid a penny of interest or fees. (I'm still using my "Subaru Bucks" for maintenance, earned almost $3,000 total in that program plus a similar amount in cash and other rewards in the other programs.) Ramsey's position is simple. Even if we don't incur interest or fees, use of plastic still costs us extra in several forms. Foremost, the "convenience" of plastic (credit cards, not necessarily debit cards) will cause us to impluse spend more, to the tune of 15-20% of our total discretionary spending, and is a major reason folks "go overbudget". He has statistics to back that. I'll use my own experience instead. Since the first of this year I went to a cash-only basis. At the end of the year I'll let you know how I make out. Another adder is the (not so) hidden cost of credit reflected in the prices of what we buy. Some places are again beginning to give some discounts for cash, and that's most likely to happen when you can deal directly with the owner/decision maker. Again - I'll let you know how I make out there, with no recent big purchases to my credit. My last "impulse" buy (on CC) was my iPad in Nov. Since then it's increasingly hard for me to part with "Uncle Benjamin" when I have to hand him over in person...! If this works according to plan I should save a whole lot more than I gain in "rewards".

It's all a process based on a change in habit, one that can lead to greater wealth down the road. I'm too old for it to make a huge difference, but I'm glad my kids now have the benefit of this same information. If I knew then what I know now, I'd be completely independent, living on an island somewhere...that I OWN...

Now back to your regularly-scheduled thread...

 

[Hall]

Walmart Does it. Target does. If you order online from them they charge you sales tax.

Walmart, Target, etc all charge sales tax because of the simple rule of if you the company has a physical presence in the state, they must. What states is Walmart NOT in ? I'd venture to say they're in all 50. I don't know about Target (we have them here) but do they have stores in all 50 states ? Of course, when you say those two stores do it, that doesn't mean anything.... That just means those two have stores in YOUR state.

 

[Hall]

Secnd, At the same time, it is true that mom and pops have to charge more, they do not buy in bulk...

The mom-and-pop stores might charge more for a lot, but in many cases, Sony, for example, isn't it true that Sony doesn't allow the retailer much leeway in the price to the customer ? They do this to "help" or protect the smaller stores.

Also, it's my understanding that the mark-up on consumer electronics is HUGE so the price on the sticker at the mom-and-pop store may be higher, or a lot higher, than at Best Buy, but pull out cash and make an offer. You can be sure that they know that you know you can probably get it at BB cheaper so instead of making 50% mark-up, they'll settle for 20% or even 10% .... cause they're both more than 0% !!

 

[Frank Jr.]

The big box stores and internet shopping have wiped out most of the small electronic mom & pop stores in my area. We do have stores that cater to the people who have bad credit/low incomes. Saw one yesterday in a strip mall while I was getting gas that was advertising a large screen Panasonic for 50 bucks a week, no money down, no credit check. The closest mall to me looks like a ghost town inside. We also have a large active and retired military population that does most of their shopping at the Post Exchange at Ft. Jackson.

 

[bhelms]

...so the price on the sticker at the mom-and-pop store may be higher, or a lot higher, than at Best Buy, but pull out cash and make an offer. You can be sure that they know that you know you can probably get it at BB cheaper so instead of making 50% mark-up, they'll settle for 20% or even 10% .... cause they're both more than 0% !!

Add to that, if you wave the cash and then walk when they won't meet your price, don't be surprised if they meet you at the door with another offer! If they have inventory on the shelf that they have to move, and you have cash in hand (meaning no additional sales risks or expenses for the retailer), that's a powerful combination in your favor, and a proverbial "bird in hand..." for the retailer! And nothing makes him feel better than taking another sale from the BB outlet...!

 

[mperdue]

Walmart, Target, etc all charge sales tax because of the simple rule of if you the company has a physical presence in the state, they must. What states is Walmart NOT in ? I'd venture to say they're in all 50. I don't know about Target (we have them here) but do they have stores in all 50 states ? Of course, when you say those two stores do it, that doesn't mean anything.... That just means those two have stores in YOUR state.

Well, if you are going to follow the rules, states require you to pay use tax on things that you mail order or purchase off the internet. The use tax is equal to the sales tax and is supposed to be paid when you file your taxes in April. So technically, sales tax is a wash - if you're being honest...

 

[lakebum431]

Well, if you are going to follow the rules, states require you to pay use tax on things that you mail order or purchase off the internet. The use tax is equal to the sales tax and is supposed to be paid when you file your taxes in April. So technically, sales tax is a wash - if you're being honest...

Ah, but therein lies the issue. Most states don't actually have a mechanism for someone to pay this. The majority of states do not have this as a separate line on the state income tax form. Other states (such as Tennessee, Florida, Texas and others) do not have a state income tax at all so there is no way to pay it even if you want to since you don't file anything with the state on a yearly basis.

 

[TheForce]

Lakebum-

In Florida we have a Tangible Personal Property tax. Most people don't file it since the state doesn't enforce it on average wage earners but they could as there is nothing in the law that says individuals are exempt. But there is a mechanism on the books to pay out of state sales tax. Several years ago I got audited by the FL Dept of Revenue and was discovered of having bought a significant amount of electronics by out of state mail order purchase ( mostly from B&H). The state Dept of revenue made me pay the taxes on it. Now every year I have to file the Form. It is due on April 1. There is a line item where you list the sales tax paid that year, either in Florida or in another state for that item. It gets figured in the assessment. You pay the tax in November after they assess the total amount you owe. The Tangible tax also assesses a market value for the stuff you have on hand at the end of the previous year and assesses each year a tax on that in addition to new purchases. Many people believe it is double taxation but in reality, it is just another tax.

Normally, an individual will never get audited for this but if you are self employed and have a license for a profession, you eventually will get audited. When they do they will assess the sales tax and charge you a 10% penalty and make the audit retroactive for 3 years. I have a professional engineers license. My wife has a state insurance license. Those licenses made us a target. Florida doesn't have a state income tax but that doesn't mean we don't pay taxes. We also have an Intangible Personal Property tax. If you are a lender of money, say you loan a family member money to buy a house. If you charge them interest on the loan it has to be declared as an intangible property and is subject to tax.

 

[lakebum431]

Fair point. There is a mechanism to do it in every state. But not an easy one and not one that anyone I going to flow until they run into something like you did. Just curious, how did thy figure out you bought a bunch of stuff online?

 

[TheForce]

Just curious, how did thy figure out you bought a bunch of stuff online?

That year, every independent Video Production company got nailed by the newly elected Property Appraiser who is in charge of that aspect of the taxes. Before he got elected, he was a sales rep for several video production businesses. So after election his first order of business was to target all companies he knew from his days in that profession. The guy knows how the TV production business works.

The way the audit works is you are on an honor system to complete the back tax forms, one for each year. You shouldn't lie on it as that would be perjury. Then after you send the forms in with your declared inventory of tangible property, they send out an auditor to inspect the equipment you listed and will nose around to see if you missed anything. The guy I had used to be a salesman for TV broadcast as well. You don't know when they will be knocking on your door. That only happens on the first filing. After that it's pretty much an honor system, but they could pop a surprise audit at any time.