Amazon threatens to shut down California Affiliates program

[murraypaul]

Originally Posted by BearMountainBooks

And remember, Amazon is not the loser in this. The people having to pay the tax--consumers--is the real loser.

The people are meant to pay the tax at the moment, but they are choosing not to.
This would not be an extra tax, but a more effective way of collecting the current, unenforced, tax.

[Phogg]

Originally Posted by murraypaul

The people are meant to pay the tax at the moment, but they are choosing not to.
This would not be an extra tax, but a more effective way of collecting the current, unenforced, tax.

By all indicators this will not be in any way whatsoever a more effective way of collecting any taxes for California.

Based on their past history of doing exactly what they say they are going to do, Amazon will go ahead and withdraw from California. Period.

This may result in a percentage og California affiliates going out of business if they can not make up the loss of traffic. That equates to less taxes, and possibly a burden of more unemployed using state resources.

California should have simply worked to enforce tax collection by the affiliates within its jurisdiction, but then hey the state didn't get broke overnight and it didn't get broke to the vast extent that it is because it was run by people with even rudimentary competence.

[murraypaul]

Originally Posted by Phogg

California should have simply worked to enforce tax collection by the affiliates within its jurisdiction, but then hey the state didn't get broke overnight and it didn't get broke to the vast extent that it is because it was run by people with even rudimentary competence.

How would the affiliates collect tax, don't they mainly just host banners linking to Amazon, and get paid for the referrals? They wouldn't know which items have been sold, or to where, so couldn't collect the taxes.
Besides, as I understand it, the tax is determined by the location of the buyer, which again they wouldn't know.
Even for those selling through the Amazon marketplace, it is Amazon that calculates and displays the price of the item, which would need to vary according to the location of the buyer.

[karunaji]

I understand that there are a lot of politics revolving around this tax issue. I can certainly see some merit in assertion that according to current laws online purchases from Amazon should remain tax free for Californians.

But on the other hand Californians have to pay sales tax for most in-store purchases anyway? Is it really so crucial for online purchases remain without sales tax which is intended as a temporary measure anyway? I mean, you can fight this on principle which is fine but ultimately it sounds like a white man's problem? Amazon is playing this game just for their own short term benefit.

Someone mentioned Russia but the sad state of affairs is that Amazon doesn't even ship Kindle to this country. I don't know if it is because of widespread credit card fraud or because some government doesn't like import new technologies but in either case those who have to lose are honest Russians who can't buy Kindle reader. E-books are quite popular in Russia, including very big online libraries like lib.ru, but for e-ink readers they have to remain satisfied with more expensive and less functional devices. Many Russians would gladly allow Amazon to collect additional shipping, import tax and VAT on Russian government's behalf to get Kindle devices instead of not paying any tax and not getting a Kindle.

[BearMountainBooks]

Originally Posted by murraypaul

The people are meant to pay the tax at the moment, but they are choosing not to.
This would not be an extra tax, but a more effective way of collecting the current, unenforced, tax.

True, but that would still leave them as losers in the deal.

[BearMountainBooks]

Originally Posted by murraypaul

How would the affiliates collect tax, don't they mainly just host banners linking to Amazon, and get paid for the referrals? They wouldn't know which items have been sold, or to where, so couldn't collect the taxes.
Besides, as I understand it, the tax is determined by the location of the buyer, which again they wouldn't know.
Even for those selling through the Amazon marketplace, it is Amazon that calculates and displays the price of the item, which would need to vary according to the location of the buyer.

You are correct--we cannot tell WHO buys an item, how they paid, where they live, etc. We collect NO money from the consumer which is another reason I say we are not sales agents.

A person from another country entirely could go through my website and buy goods. I have no way of knowing where they are from or whether they owe anyone any taxes.

[emoorman]

I asked a late friend who owned a small Radio Control airplane hobby shop-no toys or plastic models, just flying stuff. This was back just before everyone went to computerized registers. He said if Florida or the US Government required him to collect taxes on mail order items, he would have to quit doing it. It was only a small part of his business, anyway. He told me that he would not only have to collect the tax for each state, so he would need a copy of their tax code and rates, but he would need to do a lot of paperwork and register with each of the 48 states (discounting Alaska and Hawaii). He would then have to estimate his taxes for each quarter and send in an advance payment. At the end of the year, he would do a tax return for each state to settle up the exact amount or taxes to pay. He said it just wasn't worth it for the small amount of business he did.

I wonder how many small businesses would be affected like this?

[jalandar]

Originally Posted by karunaji

You are trying to apply a Federal law to the EU and that's simply wrong. Please, try not to see the world as the US extension only. The EU doesn't care about US law about substantial presence. The issue is much simpler, if a foreign seller wants to sell things to another country, it has to comply with certain things, otherwise its imports will be banned.

Not trying to apply any federal law.

Amazon exists in the EU, and thus it has to follow the law in the EU, because the EU has a nexus of jurisdiction over it. Nothing to do with US Law.

Amazon US and Amazon EU are both Amazon, Inc, and it must comply with the law regardless of which site someone is buying from. Since it has a presence under the authority of EU Law, it must collect the required taxes and fees as dictated by the law.

[karunaji]

Originally Posted by jalandar

Not trying to apply any federal law.

Amazon exists in the EU, and thus it has to follow the law in the EU, because the EU has a nexus of jurisdiction over it. Nothing to do with US Law.

Amazon US and Amazon EU are both Amazon, Inc, and it must comply with the law regardless of which site someone is buying from. Since it has a presence under the authority of EU Law, it must collect the required taxes and fees as dictated by the law.

And what country's entity Amazon, Inc. would be – US or EU? And no, I don't have to pay any tax for small purchases (now less than $15) shipped from Amazon US while everything shipped from Amazon UK will be taxed. So, they are still regarded as different entities from tax perspective. The same goes for import tax. I don't believe that Amazon US are obliged to collect anything on behalf of Latvian government but rather this agreement is for the convenience of shoppers. In this way more people can buy things from the US, Amazon can sell more stuff and the government gets more tax collected. Everybody wins.

[Kali Yuga]

Originally Posted by emoorman

He said if Florida or the US Government required him to collect taxes on mail order items, he would have to quit doing it....

If the year was 1980, that might be justifiable.

In 2011, not so much.

http://www.prosalestax.com/custom/cart/edit.asp?p=84448

There ya go, a national sales tax database for $50/month. IIRC some shopping cart services will take care of it for you. Most sales tax forms can be filled out online and/or annually. It's not a snap, but you're probably just looking at an extra day of paperwork.

More importantly, the states really aren't gunning for the small fry. I'm not even fully convinced it's about the revenues. It's about Walmart and Amazon duking it out over a competitive advantage.

[Andrew H.]

Here's a link to an article containing some recent comments by Jeff Bezos at a shareholder meeting: http://seattletimes.nwsource.com/htm..._amazon08.html

Here's the most interesting quote:

Bezos reiterated his support of federal efforts to minimize the many differences among states on sales-tax collection from Internet retailers. Asked by one shareholder to look ahead 10 years, Bezos said, "I believe we'll have the simplified sales-tax initiative passed."

"I hope it might happen much sooner than that," he added. "It's the right thing to do, and I think it would be great for Amazon."

[Fbone]

Originally Posted by murraypaul

Even for those selling through the Amazon marketplace, it is Amazon that calculates and displays the price of the item, which would need to vary according to the location of the buyer.

I recently purchased a USB cable through Amazon marketplace from a business located in my state. Amazon didn't add sales tax. The item was shipped from a warehouse in my state so I expected to pay the tax and I was hoping it would be added for my convenience. Now I have to save the confirmation email and pay the $0.20 tax next year.

So using Amazon it is possible to avoid sales tax on in-state company purchases.

[Ransom]

Originally Posted by Elfwreck

Multi-million dollar international mega-corporations not paying taxes is part of why we're in an economic crisis.

Nearly a trillion dollars goes through banks in the Caman Islands every year. There's an awful lot of tax dodging going on in the world.

[Ransom]

As to the the tax in CA and Amazon, this reminds me of a situation in Illinois where they tried to tax internet use by businesses. I have a business phone in my home and was unaware of the tax, and when I first connected to the internet through it, my phone bill went up nearly $150 that month! And that was around ten years ago when everyone was still on dial-up. Of course the first thing I did was have a second line, a residential line, installed in the house to use the internet with. Most businesses do the same as me. There's usually a way to get around ridiculous laws, and you can bet people in that affiliates program in CA will find a way to stay in it even if it means going through a relative in another state.

[BearMountainBooks]

Originally Posted by Ransom

As to the the tax in CA and Amazon, this reminds me of a situation in Illinois where they tried to tax internet use by businesses. I have a business phone in my home and was unaware of the tax, and when I first connected to the internet through it, my phone bill went up nearly $150 that month! And that was around ten years ago when everyone was still on dial-up. Of course the first thing I did was have a second line, a residential line, installed in the house to use the internet with. Most businesses do the same as me. There's usually a way to get around ridiculous laws, and you can bet people in that affiliates program in CA will find a way to stay in it even if it means going through a relative in another state.

They just sign up with different advertisers. One blog I know was already moving toward "author sponsors" (it's obviously a book site). This just seals the deal--and may affect the ad rates.

Some will probably move to B&N affiliate and/or google.