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Now amazon is charging sales tax on Prime membership!!!!


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Initial post: Nov 9, 2012 5:20:40 AM PST
This is a SERVICE, not a PRODUCT! How can they get away with this?!

In reply to an earlier post on Nov 9, 2012 8:00:00 AM PST
Your service versus product concept is *not* how the California tax code is written.

If a company passes-through a common carrier's charges for shipping/delivery, those pass-through charges would constitute non-taxable shipping charges. But that's not what Amazon does, and that certainly isn't what Prime is.

Prime *is* taxable in California.

In reply to an earlier post on Nov 11, 2012 12:11:47 AM PST
Mike S. says:
To expand on your point, it's always been taxable. It's just that Amazon is collecting it for the state now, instead of the state expecting you to pay it yourself.

Posted on Nov 12, 2012 12:36:01 PM PST
Greg M. says:
Just to be completely clear, Amazon is not charging you a sales tax on a service. Your elected government is charging you a sales tax on a service. If you believe that services should not be subject to a revenue-based tax I would encourage you to contact the governor and your legislators in both the Senate and Assembly and ask them exactly and precisely the question you asked here.

Posted on Nov 19, 2012 6:14:29 PM PST
I wish amazon would just collect the sales tax! - here in TN amazon isn't collecting the sales tax until 2014 - BUT amazon is sending out a "you may owe useage tax"' and provides a "you spent xxxx dollars on amazon in xx xyear. "

Problem is this - currently I have to take all amazon orders and separate them into
A) non food not digital
b) non food digital
c) food

I then have to take each of the categories above and then calculate the tax on each and this gets so bad that for example --- I live inside the city limits of the city -- the local tax on digital items is broken down by county - inside the city there are 2 counties so you have to figure out the state tax - then determine which tax rate for the local tax and then add both together

Then repeat the above for group B and group C

Posted on Nov 19, 2012 6:22:49 PM PST
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In reply to an earlier post on Nov 21, 2012 9:48:02 AM PST
>>>>
Lynne, I wouldn't bother. Just ignore it and see what, if anything, happens.
<<<<

Some people prefer to follow a moral code of doing the right thing, acting ethically, and following the law, and just because it's easy to not do so, and not get caught isn't sufficient incentive for them to violate their personal morals and ethics. That's called good character. It should be applauded.

Not doing the right thing, and waiting to see if anyone catches you is a character flaw. And that these character flaws are becoming socially acceptable is a big reason why so many things are going wrong in our society.

In reply to an earlier post on Nov 21, 2012 11:52:40 AM PST
FlyingAce says:
This is more out of curiosity than anything else, as I don't reside in TN, but how do you classify Prime then? It is clearly non food, but it is neither completely digital or completely non digital.

In reply to an earlier post on Nov 24, 2012 12:49:06 PM PST
edfan says:
Weiss, different states have different sales tax rules. California has written or rewritten rules to make more money off people doing business there. Other states just plain charge for services.

Posted on Jan 15, 2013 8:43:12 PM PST
[Deleted by the author on Aug 18, 2013 10:43:00 PM PDT]

In reply to an earlier post on Jan 15, 2013 9:46:40 PM PST
For "shipping" to be non-taxable in California, the charge must represent a pass-through charge from the carrier. So even when Amazon itemized a discounted "shipping" charge, it is taxable.

Why? Because it is not a pass-through charge from the carrier.

Even non-Prime "shipping" on Amazon is taxable for the same reason. It represents a charge for the handling and shipping, and may be marked-up, or marked-down, but it is NEVER simply a pass-through of the carrier's charge.

There may be things that you get with Prime that if you bought separately might be non-taxable, but because they are not broken-out in any way, the whole charge is taxable.

As for it being a "membership", calling it a "membership" for marketing purposes is NOT the same as meeting the legal requirement for what a non-taxable membership is. Amazon Prime doesn't even come close to meeting the definition of a membership under the laws and regulations of the State of California.

There are other states in which Prime is not taxable, but California is not one of those states.

In reply to an earlier post on Jan 16, 2013 5:39:45 AM PST
edfan says:
California ruled on this long ago. This is old news. Amazon charges sales tax because it must. Call it extortion, that would be closer to the truth.

In reply to an earlier post on Jan 16, 2013 9:00:09 PM PST
[Deleted by the author on Aug 18, 2013 10:43:16 PM PDT]

In reply to an earlier post on Jul 28, 2013 10:27:21 AM PDT
J. Lopes says:
Here's a problem: If you purchased Amazon Prime for the sole use of Digital Content, then the tax on the $79 is in error. Since when is a tax charged based on future UNKNOWN charges. That has to be illegal and favors the State. There are far too many unknowns for the tax on the 1 yr. $79 membership. To my surprise, I was just charged $86.11 for signing up for the $79 membership for the first time. California tax varies by County, but let's just pick a 9% tax rate.
$89.11-$79=$7.11 simple math shows that $79x.09=$7.11
I just paid 100% tax for the Amazon Prime Membership. I have not and will never receive any tangible Amazon Prime Membership product. There is no such thing. Perhaps the $7.11 9% tax will pay off for ALL shipping and handling fees offered within the regular membership benefits. If no other tax is collected for the 365 day membership duration, the membership subscriber benefits.

So here's a few problems;
By updating my credit card number, exp date and name on the card, which is currently already my default credit card for my regular Amazon purchases, I was instantly charged $86.11. No screens authorizing payment, it just charged.

I was not shown an itemized statement showing charges membership + 9% tax. I expected to see a $79 charge on my credit card.

I received notice:
Hello from Amazon.com,
Due to a problem with your card, we have been unable to charge your account $79 for your next year of Amazon Prime and your benefits have been suspended.
If you don't update your card information in the next 30 days, your Amazon Prime membership will be canceled. To update your payment information, please follow these steps:

1. Go to http://www.amazon.com.
2. Click on Your Account at the top of any page.
3. Click "Manage Prime Membership" under "Settings".
4. Sign in with your e-mail address and password.
5. Click the Edit button next to "Preferred renewal payment method".
6. Follow the on-screen instructions to update your card or choose a different one.

A charge can be declined for a variety of reasons. For more information on why the charge was declined, please contact the bank that issued your card.

Thank you for being a member of Amazon Prime and shopping at Amazon.com.

Best regards,
Amazon.com Customer Service

http://www.amazon.com
This message was sent to the following e-mail address:

In reply to an earlier post on Jul 28, 2013 5:38:40 PM PDT
>>>>
Here's a problem: If you purchased Amazon Prime for the sole use of Digital Content, then the tax on the $79 is in error.
<<<<

So if you buy edible underwear for the sole purpose of eating it, it would be considered food for sales tax purposes?

Of course not.

How YOU intend to use an item has no bearing on whether it is classified taxable or not. The intended purpose of the item is what counts in the classification. And Prime is intended to be more than just a way to get digital content.

Prime is taxable in California whether you like it or not. Deal with it.

Posted on Aug 8, 2013 9:02:37 PM PDT
Grandmaster says:
What has this world come to?

Let's meditate, mediate, and maybe these crooks will grow a conscience. Or maybe not.

In reply to an earlier post on Aug 9, 2013 6:22:31 PM PDT
Huh? Mediate what with whom how?
And which crooks exactly are you talking about?

In reply to an earlier post on Aug 16, 2013 12:39:20 PM PDT
Why would this be different then Barnes and Noble membership.

In reply to an earlier post on Aug 16, 2013 1:22:36 PM PDT
I don't know what a Barnes and Noble "membership" entails.

But perhaps we should start by saying that although we, and Amazon, call Prime a "membership" for marketing purposes, it does not meet the criteria of what the State of California calls a "membership" for legal and tax purposes.

Perhaps the Barnes and Noble membership does meet those requirements. Or perhaps Barnes and Noble will one day be hit with a huge bill for not forwarding taxes collected to the state. I don't know. I don't care. I just know that Amazon Prime *IS* taxable under the laws of California (but might not be under the laws of other states.)

In reply to an earlier post on Aug 16, 2013 1:30:42 PM PDT
>>>>
Amazon Prime is a BUNDLED transaction of intangible items. The BOE has previously stated that, in bundled transactions, that the items must be UNBUNDLED to determine California Use Tax.
<<<<

Actually, the law doesn't say that the charges have to be unbundled. They *can* be unbundled, but that's not a requirement.

If it were, the purchase price of anything that includes "free shipping" would have to be unbundled, and thus there would be no longer anything that could be called "free shipping" because it is itemized as a shipping charge.

But Amazon Prime is not just one thing. It is shipping, handling, reduced (free) prices on some streaming, and all kinds of other inducements that have been included at times. It would be impossible to unbundle that prior to the end of the contract term because each person makes use of different inducements, and to different levels.

In reply to an earlier post on Aug 16, 2013 3:11:19 PM PDT
[Deleted by the author on Aug 18, 2013 10:44:05 PM PDT]

In reply to an earlier post on Aug 18, 2013 8:16:13 PM PDT
King Al says:
He's certainly contributing more than you.

In reply to an earlier post on Aug 18, 2013 9:00:39 PM PDT
[Deleted by the author on Aug 18, 2013 10:43:47 PM PDT]

In reply to an earlier post on Aug 18, 2013 10:14:18 PM PDT
Last edited by the author on Aug 18, 2013 10:59:56 PM PDT
>>>>
BOE addressed the Amazon Prime tax issue specifically, saying that, "We cannot unbundle the service, so we will tax it all."
<<<<

After all your lengthy rants (yes, you beat me on quantity, not the other way around), you toss up a paraphrasing from the BOE that supports what I told you, albeit without any depth.

And that adds clarity?

Well, it's more accurate than all the ranting you did, but it doesn't clarify why your rants were off-base, which is something I attempted to do.

I would suggest that if you want to understand why the BOE responded to you as they did, you can go back and read some of my previous threads. They might add some clarity for you.

Edit: You were posting under an anonymous name. You really didn't have to go back, and delete all your posts -- especially since you can't erase what I quoted from them, Flavor Chemist.

Yeah... It really bugs me when people don't have the character to stand behind what they've said, and retroactively change entire threads by deleting their posts. It's the troll-ish trifecta: 1) Post outrageous rants, 2) Do it anonymously, and 3) Then erase all your words, too.

Talk about not contributing to a discussion!

In reply to an earlier post on Aug 18, 2013 10:50:50 PM PDT
Last edited by the author on Aug 18, 2013 10:55:24 PM PDT
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Participants:  19
Total posts:  53
Initial post:  Nov 9, 2012
Latest post:  Apr 25, 2014

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