Amazon threatens to shut down California Affiliates program

[tomsem]

KQED (SF NPR station) interviewed one of the CA Tax Commissioners yesterday. She was of the opinion (apparently shared by the sponsors of the law) that the new law required online retailers to collect taxes, regardless of whether affiliates program exists here. She said she 'hoped they would' (don't think she was under any illusions about this). Amazon has offices and employees in CA, though they are not storefronts.

Of course whether or not out of state retailers are legally required to collect the tax, CA residents are legally obligated to pay them. Amazon is certainly not the only online retailer that doesn't collect sales taxes, I would be hard pressed to name one that does (when they don't have CA B&M stores).

[Daithi]

Originally Posted by Andrew H.

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.

Eventually I fear they will get around to it though.

Places like Amazon and Overstock are affecting the "revenue" of states like California and New York, so it won't be too long before these states' representatives in Congress pass a federal "Sales Tax Fairness and Simplification Act." Maybe they will limit it to businesses with over a million dollars in out of state sales so that it won't effect smaller businesses, but either way I bet it's coming.

[jersysman]

Originally Posted by Daithi

Eventually I fear they will get around to it though.

Places like Amazon and Overstock are affecting the "revenue" of states like California and New York, so it won't be too long before these states' representatives in Congress pass a federal "Sales Tax Fairness and Simplification Act." Maybe they will limit it to businesses with over a million dollars in out of state sales so that it won't effect smaller businesses, but either way I bet it's coming.

If it does come to that (I still have doubts) then they will effectively shut down sites such as ebay and the like (yeah, I know ebay is not the site it was where people would sell their wares. Now it's been taken over by mainly bigger businesses). Could you imagine everyone selling things on the internet having to go through all kinds of documents just to know how much sales tax to collect? I agree with a post further up in this thread that mentioned it is time to stop with this taxing everything under the sun to give these states more revenue. They should run their states better, cut spending, cut subsides, heck just stop playing politics and we all will be much better off.

[Daithi]

Originally Posted by tomsem

KQED (SF NPR station) interviewed one of the CA Tax Commissioners yesterday. She was of the opinion (apparently shared by the sponsors of the law) that the new law required online retailers to collect taxes, regardless of whether affiliates program exists here. She said she 'hoped they would' (don't think she was under any illusions about this). Amazon has offices and employees in CA, though they are not storefronts.

Of course whether or not out of state retailers are legally required to collect the tax, CA residents are legally obligated to pay them. Amazon is certainly not the only online retailer that doesn't collect sales taxes, I would be hard pressed to name one that does (when they don't have CA B&N stores).

Amazon has two subsidiaries, A9 and Lab126 both in the Silicon Valley, that work on developing Amazon's current and future technology. However, these are completely seperate businesses that are seperate from the retail business of Amazon (essentially Amazon just works as a venture capitalist). Other states have tried to link these types of subsidiaries with corporate parents so as to force the parent company to collect and pay sales tax, but they have all failed. California has even tried this in the past and lost.

If California suceeded this time around it would be truly catastrophic for them. A9 and Lab126 would leave California and so would hundreds of other tech firms that are started by venture capital from firms that don't want to collect sales tax -- not to mention all the tech firms that don't get funded in the first place. If Amazon funding tech firms like A9 and Lab126 is deemed to provide a nexus then California could expect to see VC dry up overnight. Not too smart.

[jocampo]

Originally Posted by HarryT

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

I don't believe state finances are bad because they are not taxing enough people. But because they are wasting too much people's money in things we don't need.

I just saw the other day that some cities in Louisiana, spent thousand of dollars from BP money on buying some iPads! Yeah, the money that should be for cleaning up the beaches from oil spill. And I am not saying the oil disaster was good, but I do not believe USA or State government is reinvesting any tax or private sector money, in a proper way.

So now we do have a company that is very successful and is making millions because a great business model. Why instead of forcing taxes to Amazon and similar companies, we don't stimulate those kind of business providing exemptions to local warehouses; those places still need people to operate, that will generate state's revenue and employment.

I'm disgusted with all the tax stuff! Regardless of the political party. I see no improvement at all.

[sadievan]

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.

Illinois did this too.

Carol

[Andrew H.]

Originally Posted by jersysman

I agree with a post further up in this thread that mentioned it is time to stop with this taxing everything under the sun to give these states more revenue. They should run their states better, cut spending, cut subsides, heck just stop playing politics and we all will be much better off.

I do feel bad for the local people who want to start their own business and find that their sale prices are higher than Amazon's because they have to pay 7-9% tax if they sell, say, bicycle equipment...but customers who buy from Amazon do not have the pay this tax. This does hurt local businesses, and I don't think we want to do that.

However, the problem would be a lot less severe if sales taxes weren't so high - when I was a kid, most sales taxes were in the 3-5% range, with the exception of states that did not have income taxes. Now my state's sales tax is 7%, but in some cities or parts of cities, it's 8% - and it's 9 or just a little over in parts of Chicago. Those kinds of sales taxes start to feel illegitimate, and I think that's part of why there is so much resistance to a national sales tax equalization law.

[Elfwreck]

Originally Posted by Mel

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

...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.

You don't have to prove a negative fact; you can just say "I know the exact amount of Maine use tax I owe: $0."

You don't have to prove a lack of income, either; tax forms don't say "we assume you made a million dollars last year; please provide proof of how much less than a million you made."

[JayB]

I know this wont be a very popular opinion but here it is.

All NEW things bought on the internet should be taxed according to the state taxes they are shipped to. There is billions of dollars of commerce moving through this country that is not getting taxed.

Its getting pretty bad out there. People are always buying online to save money this is definitely hurting local economies. Especially in the retail sectors. Then people ask where did all the jobs go. Not everyone wants to work for UPS or Fedex.

I'm also sick of people trying to say the government is wasting my money so I should not have to pay. In case you havent noticed government employees are taking huge paycuts or getting laid off. Government is basically going to start balancing their budgets on the backs of their employees. So basically these employees are paying your taxes through the loss of their jobs.

Is it really so terrible to pay 6-10% tax on luxury items to help the city or state you live in?

No disrespect to anybody on this forum this is just the way I feel about it.

[Skydog]

Originally Posted by outlander78

No one likes to pay tax, especially new or higher tax, but without it, the country falls apart. In this case, I thought the US had a law banning tax on cross-state commerce?

NO -- countries "fall apart" because they spend too much of what doesn't belong to them in the first place!!

[Andrew H.]

Originally Posted by Skydog

NO -- countries "fall apart" because they spend too much of what doesn't belong to them in the first place!!

Sweden hasn't fallen apart. Somalia has fallen apart. Which one has higher taxes?

[HansTWN]

Originally Posted by Andrew H.

Sweden hasn't fallen apart. Somalia has fallen apart. Which one has higher taxes?

Not exactly a valid argument, Liechtenstein, Monaco, Luxembourg, Switzerland, Singapore, HK were all doing quite well, last I checked.

[HansTWN]

Originally Posted by Andrew H.

Sweden hasn't fallen apart. Somalia has fallen apart. Which one has higher taxes?

Not exactly a valid argument, Liechtenstein, Monaco, Luxembourg, Switzerland, Singapore, HK were all doing quite well, last time I checked --- a lot better than Sweden.

[DianNC]

Originally Posted by JayB

I'm also sick of people trying to say the government is wasting my money so I should not have to pay

But the bozos do waste it. You can pick up a newspaper on a daily basis in almost any part of the country and read about how they're wasting it.

It's not their money, though, so what do they care?

[BooksForABuck]

I was an Amazon affliate until yesterday (when they canceled me for being in California). Nobody likes taxes, but it seems to me that we should have a level playing field... if you sell to California residents, you pay sales taxes. I like Amazon and think they're a well-run company with a lot going for them. That said, I think they built themselves largely on the affliate program and it's a shame that, now that they're dominant in the eCommerce arena, they are abandoning their affliates.