So he’s actually playing it for laughs then this year is he?

Amazon has apparently patented a floating warehouse system to be located in what are effectively airships floating at 45,000 feet above high density delivery areas. The warehouses are to be replenished with stock by associated ballon or airship systems and staff working at 45,000 feet would arrive and depart in these same way.

I suspect that technically the system has a long way to go before it might work, but let me assume Amazon has reason for thinking this way. Suppose, just for a moment, that the airship warehouse was replenished with stock from another warehouse anchored in international waters. There, is surely, no reason why this is not my possible? Where then is tax paid on the transaction? Might this be the reason for Amazon’s interest? And if so what is the appropriate tax response?

Amazon’s released a bit of PR flummery and he wants to know what the tax implications are?

I am, in general, deeply cynical of destination based sales taxes. Does such a situation require it though, maybe as an exceptional charging basis?

Can’t see why VAT, a destination based sales tax, wouldn’t be charged in the normal manner.

Let alone the fact that any company using such a system might be wholly avoiding the contribution retailers with stores make to the societies in which they work through the local taxes that they pay that Amazon will claim are, quite literally, beneath them?

Local taxation being based upon the use of land, something they’re not using.

I am not saying Amazon cannot develop their ideas. But I do think we need to presume their goal is to subvert tax systems to secure competitive advantage when doing so and make sure we are ready to counter that.

No, their goal is to get every idiot to plaster “Amazon” across their pages.

28 comments on “So he’s actually playing it for laughs then this year is he?

  1. Does he think countries don’t claim their airspace?

    On that logic Russian jets can zoom over Britain any time they like.

    The air above the UK is no more outside UK’s scope than territorial waters, and a floating warehouse is well within modern possibilities.

  2. No reason that a country could not charge fees for its airspace the same way they do for ships parking up in their waters.
    Just as no one is using a flying warehouse yet the various governments haven’t got around to working out what they are going to charge for flying warehouses.

  3. “their goal is to get every idiot to plaster “Amazon” across their pages”

    And it’s worked (OK, Murphy isn’t “every idiot”, but he is the perfect idiot)

  4. You have to be clinically insane to think, like Spud, that any activity undertaken by a company is done with the ultimate object of evading tax. How does a professor of economics get away wihtout thinking of things such as cost reductions, or efficiency savings…? I hope City Uni thinks it is getting its money’s worth with this idiot in post.

  5. There may be more to this than PR, even if that’s an important part of it. Amazon is experimenting with drones. It’s not clear how widely they will actually be used but the potential of drones to provide a cheap automated delivery service is too obvious for the company to ignore. Once you start looking into that, it also becomes obvious to consider the possibilities of using an airship as a mobile drone base to extend their range or reduce the number of trips back to base to collect more stuff. So, I suspect that this is primarily a defensive patent. Amazon may never use this concept, but as long as there’s any possibility that it might ever do so it’s only prudent to get the patent before anybody else does. That way the company doesn’t have to worry about somebody else being able to stop them using this idea in future.

  6. Diogenes
    I know quite a few morons and none obsesses about tax avoidance and evil Amazon. So identifying him simply as a moron ( which he is) has little explanatory power.

  7. Suddenly those large out of town warehouses and stores aren’t the hideous face of capitalism nd consumerism, but are valuable tax-paying entities.

    Funny how the Left flits between opinions, depending on the tactical needs of the moment.

  8. I have suggested that an opera might be made out of this, perhaps “Der Fleigender Retailer”? I’ll hum the tune, you can do the singing.

  9. He thought that the only reason why Apple applied for 3D trademarks for their distinctive store layouts was for royalty-shifting and hence tax-avoidance purposes. Not to, you know, actually have a decent lever to use against cleverly-designed fake apple stores…

    It’s really quite amazing how he manages to stick a tax angle on the most banal things.

    Anyway, my two-pennorth on the patent. It’s indeed granted (and they pushed it through super-fast), it’s US only, and the granted claims made me chuckle somewhat. I’m not surprised they only applied in the US, where business method type patents are legit (thanks, Slick Willie!). My take on the “why” of it is twofold.

    a) publicity, indeed.
    b) if it works technically (which I strongly doubt), tie any potential competitor up in expensive litigation so as to discourage them from doing the same thing. In the US both parties have to pay their own fees except in cases of abuse, so the punishment is in the process.

  10. Saud Arabia bans alcohol.

    I understand international aircraft departing Saudi don’t break out the booze til they hit international airspace…

  11. Good heavens.

    Some company boffins decide to dick around with the idea of using a zeppelin to bomb you with your Christmas presents, and the first thing that hits his mind is how to tax it?

  12. Wouldn’t tax be charged at importation? ie, when the stuff entered national airspace? Customs requiring that it be landed at an inspection port for, you know, *inspection and tariff assessments*?

    Otherwise, what is being described here is bog standard smuggling. Goods being shipped across a border without paying the demanded fees. That its to an airship and from a warehouse ‘in international waters’ doesn’t change the base scenario.

    You’re really not going to get away with flying stuff in from out of the country and not paying unless you have fast drones and they run straight to the destinations.

    And then you better base your whole company outside of existing national territories and spend a whole hell of a lot on military hardware to defend yourself for when the tax collectors come calling.

  13. Smuggling would be shipping undeclared stuff. Its already in country so declared – an airship can operate quite far from base – the trouble is having the stock on board. Though could be say a couple of dozen airships above a large city each one with its own assigned airspace and each with a portion of common items.
    Bit like the Prime Now warehouses but up in the air.

    At the moment its a pipe dream, however engineering and economics would suggest that it could one day be cost effective.
    Rather than the reception of a company or a hotel being on the ground floor, being partway up or on the roof.

  14. Abacab: unless the rules have changed since I worked in patents, you have a year from first filing to file for all following patents in other countries. (To avoid the significant issues trying to file everywhere simultaneously.)

    So they may yet file elsewhere. If they don’t they will be able to block all similar patents, but won’t be able to stop people using the process.

  15. Martin
    January 1, 2017 at 11:41 pm

    Smuggling would be shipping undeclared stuff. Its already in country so declared – an airship can operate quite far from base – the trouble is having the stock on board.

    That’s what I’m saying – either they’ve declared what they’re importing (in which case they and the government have a suitable arrangement to ensure that they don’t falsify their import claims) and so will have received their import bill.

    Or they won’t declare, in which case they’re smuggling. Smuggling doesn’t necessarily mean sneaking across a border, it just means deliberately taking actions to avoid declaration requirements.

    Neither situation is novel, and there are well-established procedures and precedents to deal with either.

    If Amazon were picking up stuff from offshore, running the border, and then dropping it off with a customer while ignoring the legal niceties – they’re doing nothing different from any other smuggling cartel.

  16. @Chester, they’d have published already – the US filing was december 2014, so the publications would have been mid-2016 (18 months from priority date).

  17. “I suspect that technically the system has a long way to go before it might work,”

    Lando Calorissan did not return calls for comment.

  18. “Some company boffins decide to dick around with the idea of using a zeppelin to bomb you with your Christmas presents, and the first thing that hits his mind is how to tax it”

    You have to look at this from the perspective of the Leftist mind.

    My fundamental principle when working out why Leftists do and say what they so is to regard their fundamental aim as control. The people like Murphy who imagine themselves at the top of the socialist tree issuing order to the masses below are fundamentally dictatorial control freaks. Politics is the obvious place for such people to migrate to, as it allows greater scope for ordering other people around, with the cover of democracy for their predilection, and socialism offers the greatest amount of control over individuals, so thats pretty much where they end up (some used to end up in the hanging and flogging end of the socially illiberal Right, but nowadays that’s pretty much withered away, the Right having moved more towards social liberalism to go with its economic liberalism).

    But as pure socialism has been somewhat tainted by the collapse of Communism and its blatant failure to provide ‘stuff’ for the masses in the way capitalism has, the control freakery has shifted its focus. Its no longer on pure socialism, now its aim is to control people within a market economy, hence the intense concentration by the Left on a) taxation and b) control of social mores by invoking morality (theirs of course).

    So the automatic reaction of a Murphy to anything new is not ‘ Will it work? Will it help people? Does it add to the sum of human happiness?’, its ‘How to I control this new thing?’. And the first tool at hand is tax. If it were a new type of social behaviour, then morality would be invoked in some way.

    If you look at Leftist action and statement from the perspective that control underpins all, then it all falls into place.

  19. I read this. My reaction was along the lines of FO. There is no way that you build an airship with current tech to hold the many hundreds of tons of product that would have to have to be held to satisfy any sort of demand. Total rubbish. But for the publicity it has generated.

  20. Daedalus – but can you have a few dozen in one area carrying the required amount of stuff?

    Perhaps the Prime Now range rather than the full range.

  21. I found it telling that although his first thought was “how do we tax this?”, his second was “I can’t see how we would”.

    Anyone who actually does international VAT work would immediately see that the answers are already there, and ditto for direct tax.

    His lack of familiarity with the current rules is why I keep trying to educate him 🙂

  22. Andrew (Pellinor)

    You are highly unusual in that I think even his dimmest of brains has realised that you are substantially better informed than he is and although he does get angry with you you are usually allowed to comment. this may be by dint of your professional background. Almost all Others on here have been banned although various comic posts seem to make it through from time to time!

  23. Oh, I’ve been banned too – many times 🙂

    But back when he was banning me, he did it by saying “You are banned”, rather than actually taking any action, and so it was trivial to circumvent the ban – in order to post a comment, all I had to do was, er, post a comment… 🙂

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