Amazon threatens to shut down California Affiliates program

[DianNC]

The state sets a tax rate, but it can vary from county to county, depending upon added additional city and transit taxes. My state starts with a base rate of 6.25%, but actual sales tax for my county is 8.25%. Then again, I could drive two or three counties over and pay a rate of 7.25%...or lower, I suppose, but I'm assuming Amazon would tax me at the rate of the county in which I reside.

If I travel to, say, San Diego, California, though...where sales tax is 7.25%...stores there don't insist I pay my home/county sales tax of 8.25%.

[TallMomof2]

All I know that if I have to start collecting sales tax from out of state customers I will close my business. For small businesses collecting sales tax for all states is onerous.

[Dulin's Books]

exactly. i would to.

[Dulin's Books]

Originally Posted by Andrew H.

but if you buy the exact same item from Amazon, you *don't* have to pay sales tax. Requiring someone to pay the sales tax of a different state makes things more confusing, but it doesn't really help fix the issue.

but they would under my idea. Amazon would have to collect sales tax for the place they do business from. So if they're "sales force" is physically in Cali then every sale they make no matter what they would have to collect Cali sales tax just as if they had a physical store and the customer came in through the door.

if they didn't like that then they could move their sales force to somewhere else- say Oregon- and then they wouldnt have to collect a sales tax.

[DianNC]

Amazon (headquartered out of Seattle) has already notified 25,000 Cali affiliates to move to another state or shut down. Overstock (out of Salt Lake City) has done the same.

Big box stores are probably celebrating, though. (Can ya hear me, Wal-Mart???)

[Ditchleyportrait]

meh even with tax amazon is super convenient and cheap. they'll never be able to compete with amazon's prices.

[AnemicOak]

Originally Posted by DianNC

The state sets a tax rate, but it can vary from county to county, depending upon added additional city and transit taxes. My state starts with a base rate of 6.25%, but actual sales tax for my county is 8.25%. Then again, I could drive two or three counties over and pay a rate of 7.25%...or lower, I suppose, but I'm assuming Amazon would tax me at the rate of the county in which I reside.

If I travel to, say, San Diego, California, though...where sales tax is 7.25%...stores there don't insist I pay my home/county sales tax of 8.25%.

And with the various county and city add-ons there are over 10,000 separate tax districts in the US. This makes it rather crazy to expect out of state businesses to collect sales tax (and know what's taxed in each jurusdiction and what's not), because if it starts with the states, it's sure to expand to counties and cities as well. Possibly doable for someplace like Amazon (but expensive), but for someone like Dulin's I'm sure it's pretty much impossible.

[Mel]

I'd have to go back and check last year's tax form but I have a half-formed memory that my state gave us a use tax table based on income. If you make this amount we're assuming you bought this much online so we're charging you this much for lost sales tax. I guess if you're a backwoods state that no store wants to set up a physical presence in the government can make an assumption that everyone is buying everything via the internet.

[Daithi]

Originally Posted by Mel

I'd have to go back and check last year's tax form but I have a half-formed memory that my state gave us a use tax table based on income. If you make this amount we're assuming you bought this much online so we're charging you this much for lost sales tax. I guess if you're a backwoods state that no store wants to set up a physical presence in the government can make an assumption that everyone is buying everything via the internet.

OK, that sucks!

I know that this same practice has been done to waitstaff for years. The government has all kinds of onerous reporting rules, and even then they still have the nefarious "aggregate estimation method" used to determine a business's tax obligations. <irony>So nice to see that this "estimate" of taxes is now being applied to every day citizens as well.</irony>

[RainingLemur]

Originally Posted by Mel

I'd have to go back and check last year's tax form but I have a half-formed memory that my state gave us a use tax table based on income. If you make this amount we're assuming you bought this much online so we're charging you this much for lost sales tax. I guess if you're a backwoods state that no store wants to set up a physical presence in the government can make an assumption that everyone is buying everything via the internet.

...Wow. I don't remember that on my tax forms. But, if it was, that's...something else.

[Mel]

I did remember it correctly, we have an income-based table to pick our use tax. The actual wording is:

If you purchased items for use in Maine from retailers
who did not collect the Maine sales tax (such as businesses in
other states and many mail order and internet sellers), you may
owe Maine use tax on those items. The rate of tax for purchases
in 2010 is 5%. If you paid another state’s sales or use tax on any
purchase, that amount may be credited against the Maine use
tax due on that purchase. If you do not know the exact amount of
Maine use tax that you owe, either multiply your Maine adjusted
gross income from line 15 by .08% (.0008) or use the table below.

So, unless you can somehow prove the negative fact that you never crossed the state line and never ordered anything from a catalog or the internet you pay.

[Dulin's Books]

ahh well there's the legal out "for use in Maine". maybe you bought it for use somewhere else(vacation in Fiji) and the use in Maine is just incidental.

[Doctor Vapor]

I found a great article explaining all this in today's Forbes magazine site;
http://blogs.forbes.com/robertwood/2...ine-sales-tax/


How long will Americans put up with over taxation? Amazon isn't being taxed, we are. Amazon does not pay taxes, we do. Amazon will simply collect them from us and pass them on to the states. California, New York, and the hand full of other states that unconstitutionally collect taxes on interstate commerce should look more at cutting spending than new ways of stealing money from their constituencies.

[Andrew H.]

Originally Posted by taustin

That's because such laws were ruled unconstitutional decades ago, when mail order (and that's what buying physical products off the internet is) was big business. There's nothing new, legally, to explore there.

Read the Quill opinion again. It is unconstitutional for *a state* to require a business located in *another state* to collect taxes owed in the first state. It is perfectly constitutional for *congress*, using its power to regulate interstate commerce, to do so. For about the last decade there has been a bill similar to the "Sales Tax Fairness and Simplification Act" floating around congress that would do just that - but Congress hasn't seemed too eager to pass it, for obvious reasons.

[OtterBooks]

Good thing them states can't collect taxes from my affiliate membership here in my self-declared sovereign nation, Otterstan, from whence I sells my radiation-proof venison jerky.