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News & ArtsTuesday, June 30, 2009
Books / Retail Amazon's Tea Party
Posted by Paul Constant on Tue, Jun 30, 2009 at 1:27 PM
MobyLives says that due to a new law in North Carolina that would require sales tax to be collected on click-through referrals, Amazon will no longer partner with vendors from North Carolina.
[L]awmakers are feeling pressure from brick and mortar retailers who have to collect taxes and claim online retailers therefore have an unfair advantage...“North Carolina expects to collect an additional $13.2 million in the coming fiscal year,” says the AP report.
At this point, it looks like this is going to become fodder for a weird pool: How many states do you think Amazon can boycott before it becomes more financially worthwhile for them to collect taxes? I'm betting ten.
1
I'm with the states on this one. It's outrageous that you can avoid sales tax just by going online. You know you're supposed to pay an equivalent "use tax" every time you buy something with no tax, but no one ever does. Hurts the state, hurts local businesses.
2
It depends on which states, doesn't it, dummy?
All the wyomings and alaskas and whatever won't add up to a single california.
God you a just fucking stupid on legs, are you?
All the wyomings and alaskas and whatever won't add up to a single california.
God you a just fucking stupid on legs, are you?
3
They pulled the plug on Rhode Island yesterday also - for the same reason.
And Fnarf, this isn't going to increase sales tax revenues in the affected states. All it's going to do is shift business (and jobs) to states that don't have these laws.
And Fnarf, this isn't going to increase sales tax revenues in the affected states. All it's going to do is shift business (and jobs) to states that don't have these laws.
4
What? Then why the hell does Amazon charge me sales tax every time I buy something from them? I guess it's hard for them to boycott their home state, but if they're willing to collect those taxes here, why not everywhere?
5
Don't be ridiculous. One of Amazon's core business advantages is that it doesn't have to pay sales tax in most of the country. That, combined with a model that allows them to eat shipping charges in a lot of cases makes them an almost unbeatable value proposition for buyers. Amazon will hold onto that status tooth and nail.
6
@4 They have to collect taxes in any state where they have a physical presence, be it an office or a distribution center. Anywhere else it's interstate commerce which may not be taxed by states according to the Constitution. That's also why BestBuy.com and other online retailers that are tied to B&M stores have to collect taxes.
7
Let me see ... Hawaii, Cali ... at this rate they'll put themselves out of business.
The states would be well advised to arrest and hold any employees of this tax-avoiding firm when they travel in their states and only release them upon full payment of taxes owed.
I recommend the use of cattle prods in the capture.
The states would be well advised to arrest and hold any employees of this tax-avoiding firm when they travel in their states and only release them upon full payment of taxes owed.
I recommend the use of cattle prods in the capture.
8
Pretty much every major online retailer charges CA residents sales tax. Probably for reasons #6 noted.
A little off topic, but I think they're vendor network has gotten to big without much quality controls IMO. Odering from Amazon is almost as much as a crapshoot as eBay, Bookfinder, or Gemm these days.
A little off topic, but I think they're vendor network has gotten to big without much quality controls IMO. Odering from Amazon is almost as much as a crapshoot as eBay, Bookfinder, or Gemm these days.
11
@4: The first reason has already been detailed by other commenters: Amazon is based here. The second is that this story is about buying through Amazon's vendor network, not directly from Amazon.
12
Hello?
#5, #7? You realize this is about Amazon's affiliate program, right? Amazon isn't going to stop selling in these states, they're just not going to offer their affiliate program there.
#1, #5? You realize this isn't special to Amazon, but is rooted in the overused interstate commerce clause of the constitution, whereby no state can levy a tax on goods imported from another state (hence the silly "use tax" stuff). It's true for online, phone orders, and mail order.
Me, I don't see why Amazon (or other out-of-state resellers) should pay taxes to a state for the privilege of shipping goods to that state. But to the extent that's going to happen, calling affiliate program participants "physical presence" for companies is going to have all sorts of unintended consequences.
#5, #7? You realize this is about Amazon's affiliate program, right? Amazon isn't going to stop selling in these states, they're just not going to offer their affiliate program there.
#1, #5? You realize this isn't special to Amazon, but is rooted in the overused interstate commerce clause of the constitution, whereby no state can levy a tax on goods imported from another state (hence the silly "use tax" stuff). It's true for online, phone orders, and mail order.
Me, I don't see why Amazon (or other out-of-state resellers) should pay taxes to a state for the privilege of shipping goods to that state. But to the extent that's going to happen, calling affiliate program participants "physical presence" for companies is going to have all sorts of unintended consequences.
13
Here's a little list that might help this conversation:
Amazon has cut affiliate ties to:
Rhode Island
Hawaii
North Carolina
(and sent a threatening letter to California)
Blue Nile has cut ties to:
North Carolina
Rhode Island
(This comment cribbed from a PSBJ article.)
Amazon has cut affiliate ties to:
Rhode Island
Hawaii
North Carolina
(and sent a threatening letter to California)
Blue Nile has cut ties to:
North Carolina
Rhode Island
(This comment cribbed from a PSBJ article.)
15
@1: Amazon has repeatedly stated that its objection is to a patchwork tax system, and supports a nationwide consistent mechanism to withhold taxes for the states (such as the Main Street Fairness Act). They're not alone in this; there are 20-some states on board.
I'm sure that Amazon has a pretty good grasp on the financial impact of cutting off its' affiliates program on a given state. It may very well be that case that they have decided that the affiliates program brings in less profit than the necessary tax systems will cost to develop or acquire and operate.
@11
This is indeed about buying directly from Amazon. Affiliates are people who link to Amazon products. They're getting paid for the referral. Sellers (people who sell products through Amazon) are a different issue.
I'm sure that Amazon has a pretty good grasp on the financial impact of cutting off its' affiliates program on a given state. It may very well be that case that they have decided that the affiliates program brings in less profit than the necessary tax systems will cost to develop or acquire and operate.
@11
This is indeed about buying directly from Amazon. Affiliates are people who link to Amazon products. They're getting paid for the referral. Sellers (people who sell products through Amazon) are a different issue.
16
Depends on how many states enact internet taxes. It seems like a lucrative option on paper, but NC just ran into the obvious hurdle: Major internet retailers can just pull the plug on doing business with them, and then their economy is out that potential revenue as businesses lose that e-business and the state then loses the taxes they would've gained at year's end from the business for that revenue... pronouncing the economic downtown (and loss in business tax revenue) every state's battling with.
Like a lot of good ideas, it looks good on paper... not so much in practice.
This never minds enforcing the law, which is a whole other can of worms.
Like a lot of good ideas, it looks good on paper... not so much in practice.
This never minds enforcing the law, which is a whole other can of worms.
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