David Clark’s comment not just dumb, also wrong
This morning’s post about slapping GST on Amazon covered on David “rising star” Clarkson’s dumb comment that:
“It seems it would be pretty simple to speak with Amazon and other suppliers to ask them to collect GST since they collect, as I understand it, sales taxes for individual states in the US. If that’s true, then it’s obviously an ideological decision from the Government not to collect it.”
Looks like the comment was not only dumb, it was wrong. Amazon is refusing to collect state sales taxes, even taking New York State to the Supreme Court. The Taxpayers’ Union has blogged:
How Mr Clark thinks that the New Zealand Government has any tax jurisdiction over companies operating in and domicile in the United States is unclear. Is he meaning that as Minister he would seek agreement from the large online retailers like Amazon to charge just New Zealanders more, and pass the money on to the government? If so, he is being optimistic. Amazon for example is challenging New York State’s attempt to force it to collect its sales tax. Why would Amazon (and it’s competitors) take any different view to New Zealand?
If Mr Clark thinks that some sort of cross-border legal obligation exists, he is wrong. Tax treaties seldom cover sales taxes.
In reality any further GST levied would be the responsibility of Customs at the border. The screening process is imprecise and carries high administration costs (both reasons for the existing threshold). For the consumer it means parcels/goods are held at the border until GST (and any applicable duty) is paid. We’re not yet convinced that retailers have made the case for an iPhone cover ordered from a US website to be stopped at the border in order for a few dollars of GST to be collected.
David Clark is supposed to be a rising star in the Labour Party. How a spokesperson for such an important portfolio could say something so stupid should be a big wakeup call for Labour.
What will be next, a coalition partner promising to print money? These people are not fit for government.