[wheels]

Amazon's competitors in France also pay tax. That's the difference.

The issue here is that the law is such that out of state vendors don't have to pay tax; Illinois is just trying to jigger a way to make Amazon have to pay anyway, because Amazon sells lots of stuff and they'd like the tax revenue. But that effectively gives their competitors a 10% pricing advantage, not to mention making accounting much more expensive.

[tsycho]

Well, to be fair to the physical retailers, all online retailers should pay sales tax since you are giving them a 10% pricing advantage otherwise.

Amazon (and others) are exploiting a tax loophole, and the state governments are trying to stop that. They should, however, make such rules for all retailers, and not target Amazon specifically (I am not sure if they are doing so, but the parent comment makes it seem like that).

[CWuestefeld]

You're making a big assumption, that it's Amazon that's exploiting a loophole, rather than the the State being exploitative. You're assuming that the State has some inherent right to grab whatever money it can get its hands on. Can you explain why a retailer that's not in the state ought to be on the hook for these taxes?

In other words, rather than simply assuming that states have essentially unlimited authority to tax (subject to their courts and legislatures), is there a point where the authority to tax ends? At one extreme, I would submit that they can't tax me, sitting here in NJ. (However, I once had the State of Connecticut contact me, forcing me to prove to them that I didn't need to pay them income tax, so it appears to me that States do believe that their power is unlimited). On the other hand, few would argue that, say, a local shop ought to be exempt. Where do we draw the line?

[sharth]

Technically, it's the customer who is cheating the state. If I was to buy a product on amazon and not pay sales tax on it, I am supposed to pay a use tax on it at the end of the year.

[isleyaardvark]

How so? If I go to New Jersey/France/Mars and buy a candy bar, my home state has no business adding a sales tax. If I write a letter ordering a candy bar delivered from New Jersey/France/Mars, they have no business adding a sales tax. So why tax an order made online from out-of-state? The state is overreaching it's bounds, and that's why Amazon's letter says it is unconstitutional.

[shareme]

No, read the damn paper..Illinois is bankrupt they are asking for sales taxes to get them out of debt..

[dpatru]

Illinois should cut its spending.

[logicalmind]

Even if that spending is money they are contractually obligated to pay based on contracts they made years ago?

[ultrasaurus]

Taxpayers aren't prisoners, so there is some maximum rate you can get out of people before they start leaving. I doubt it's the case, but there is a non-zero chance that paying all their obligations are actually impossible.

It's interesting enforcing contracts when my local government can sign a contract that we'll pay pensions for the next 40 years in exchange for a service now (say education), but I can move away after consuming it (or simply never become productive and pay taxes).

[logicalmind]

Yes, the taxpayers can leave. But on the other side are the people providing the service with whom the government has made these contracts.

Some people took these positions based on the deferred compensation. If that goes away, there will need to be upfront compensation. If neither of those happen you won't find many qualified people willing to take those jobs. Both sides will get screwed.