Paul Rafelson talks Sales Tax, Paul is from a Law firm focused on Amazon Sellers and a founder of the On-line Merchants Guild trade organisation focusing on advocacy and eCommerce Sellers.
Big Companies and Sales Tax
The big companies are not wanting federal government anywhere near it
2019 is the year of the marketplace as States all go marketplace for tax.
Every couple of weeks we hear of more and more states going Marketplace legislation.
Amazon – read the book by Brad Stone that talks about how Amazon flips States to being on-side with Amazon.
Amazon said in an article that they would collect Sales Tax if the Governor of California told them to.
When she (Head of Sales Tax for the State) went to the Governor of California and asked him to ask him to get Amazon to collect the tax.
This is a big money area.
Legal Action in Motion around Sales Tax
Has an action in motion currently and doing an analysis of the constitutional law problems and a plan going well, then Amazon announced that they would give all the Seller information to California
Only two states have aggressively gone after sellers for back-tax, California and Washington
If you hire a lawyer before filling in the questionnaires you get advice and avoid silly mistakes
Washington seems to be reluctant to chase ‘new’ Sellers as they are feasting on the current sellers that have fallen in the net
California is not the same and is actively going after new Sellers too
Maybe wouldn’t advise a client to bother with any amnesty on back-tax for sales tax
Action Against California on Sales Tax
Decided to go for California and decided to bring a Government Waste Action that says if the State doesn’t enforce the tax laws then the Government is wasting tax dollars
and so we’ll get the court to tell the California Tax Division to tell Amazon to collect this tax
If we could get a court to rule in weeks that the State of California is losing $1m / day it doesn’t collect Sales tax and that it would have to go after Amazon or Sellers to get it back and this has been going on for years we would make progress
We shared the letter with the California Tax Division CDTFA (and not with Amazon) and Amazon was then told about the letter and our law firm was disqualified and our lawyers had to step down – incredible how influential Amazon is
All of a sudden California adopted Marketplace Sales Tax – why would they do that? Timing was interesting
Amazon are liable to collect the Sales Tax and Sellers are operating as Suppliers to Amazon
Amazon has possession of property, they claim it is owned by you, Amazon can transfer title to a 3rd Party (the Consumer) on your behalf and they exercise that power as a retailer
The bit that people miss is that Sellers are ‘constantly’ reminded that the consumers are Amazon’s customers