Amazon threatens to shut down California Affiliates program

[Phogg]

Originally Posted by outlander78

Would it not be easier to have one federal tax than one tax per state? A standard, wide-spread tax shared with the states would be easy to implement, wouldn't hurt business, and would avoid the lunacy of states competing with each other.

It would be better still to stop spending money you don't have, and promising benefits you can't afford. Eventually the regulation and tax burden reaches a point where it causes societal collapse.

[jersysman]

Originally Posted by HarryT

Surely you have to pay use tax on your purchases if you consume them in your own state, don't you?

Harry, a lot of states (not sure if all) have this "use" tax. But, it is hardly ever paid and the government does not go after those who don't pay it.

[HarryT]

Originally Posted by jersysman

Harry, a lot of states (not sure if all) have this "use" tax. But, it is hardly ever paid and the government does not go after those who don't pay it.

Perhaps if tax evasion were not so widespread, state finances would be in a better shape?

[DiapDealer]

Originally Posted by HarryT

Perhaps if tax evasion were not so widespread, state finances would be in a better shape?

But tax evasion is the American Way. It's in the Bill of Rights.

[OtterBooks]

Originally Posted by DiapDealer

But tax evasion is the American Way. It's in the Bill of Rights.

"Only the little people pay taxes." -Leona Helmsley, billionaire hotel mogul/convict.

[Phogg]

Originally Posted by HarryT

Perhaps if tax evasion were not so widespread, state finances would be in a better shape?

The problem in California was never a shortage of taxes until recently when they got so high that businesses begin to close under the weight, the problem there has always been spending.

When Texas built its windpower infrastructure we specifically built it connected with only a local grid - not connected to the national grid. Californians want Green power but they are bad about not paying for it, or trying to get the federal judiciary to help them get it below cost. Texas has made out better by keeping this resourse in state rather than selling it primarily because of the bad past behavior of California.

It might help you to think of California as Greece.

[Elfwreck]

Originally Posted by HarryT

Surely you have to pay use tax on your purchases if you consume them in your own state, don't you?

Technically, yes, but there's no method for tracking those purchases. It's up to the individual to report them on their state income tax forms--and even for very honest individuals, trying to remember every purchase made throughout the year that wasn't taxed can be difficult.

Also, consumers have no easy way of knowing which purchases are supposed to have sales tax--foods aren't taxed; services aren't taxed; ebooks are... who knows? My Fictionwise purchases don't have sales tax attached. Neither do my Smashwords purchases. Smashwords is located in my home state; FW is in New Jersey.

For something like Baen or the former Fictionwise setup, with a standing micropay account, when does the need for taxes kick in? When I bought "micropay points," or when I spend those points on specific ebooks? If a store sells a recommendation service (say, $5/month for a list of 20 ebooks they think are good), does that have a tax cost? If it includes a "free" ebook from the 20, does that change the tax setup? (If the book's retail value is $6, how much are the taxes?)

Businesses are supposed to collect sales tax in part so the state doesn't have to educate every individual buyer about the ins & outs of tax laws.

People who buy cars & houses out-of-state get hit for use tax; people who buy holiday gifts by mail-order don't get noticed--until recently, when a notable percentage of all purchases have switched to online. But there's still no mechanism for tracking those sales, and none for informing consumers which purchases they're supposed to pay how much tax on.

[Greg Anos]

Originally Posted by HarryT

Perhaps if tax evasion were not so widespread, state finances would be in a better shape?

Probably not. When you typical state/national tax take reaches 25% (or 50% in the UK) you reach the point of diminishing returns. The more you tax the more people evade...

[DianNC]

Originally Posted by Phogg

It might help you to think of California as Greece.

They really hate paying taxes!

[taustin]

Originally Posted by outlander78

Would it not be easier to have one federal tax than one tax per state?

If it's a federal tax, the federal government collects it. And the states don't get any of it. This does not help the states.

[Andrew H.]

Originally Posted by taustin

If it's a federal tax, the federal government collects it. And the states don't get any of it. This does not help the states.

You don't need a federal tax; you just need a federal law requiring out-of-state businesses to collect sales taxes on products sold in other states. A bill like this has been floating around in congress for ten years of so, but it never gets much traction.

[soondai]

My wife made a 90 dollar Amazon order on June 28 (we live in California), and we were charged 39 cents of sales tax. So somehow we paid tax on one item.

[Dulin's Books]

Originally Posted by Elfwreck

Amazon got market dominance by being ubiquitous; the tactic of "if we have to pay taxes, we won't do business in your state" will make them less universal. B&N or Powell's may jump in with an affiliate program that does pay taxes, and Amazon would lose a lot of its traffic.

Powell's won't. They're here in Oregon where there is no state sales tax. They hardly want to pay it to California

[Greg Anos]

Originally Posted by Andrew H.

You don't need a federal tax; you just need a federal law requiring out-of-state businesses to collect sales taxes on products sold in other states. A bill like this has been floating around in congress for ten years of so, but it never gets much traction.

Some states don't have a sales tax. They'd end up being a tax collector for other states, at no pay...

[Dulin's Books]

and there is the argument about where the sale is taking place.

is it taking place in the state where the company is located, where the customer is physically located or where the server that hosts the site is physically located?

it makes the most sense to me to have that be where the business is located. my business is in Oregon. We have no sales tax. Customers come to my store and dont get charged a sales tax. just as if they came to my physical store in a local mall.

If we change that and say the transaction takes place where the customer is physically then I, the small business owner with very little margin and nearly 0 profit, would have to know the tax law in every state AND country( and perhaps provinces or states in those) my customer's are from. that's too costly a burden. it would kill small business because only large businesses would be able to afford to keep track of it all.

if you want to change it to where the servers are located I will set up a server farm tomorrow and business's will flock to it because there is no sales tax here. Oregon will benefit from the increased revenue of my profit making and states with sales taxes will lose revenue. that would be ok with me