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Amazon's Termination Of Associates In Certain States, Amazon has refused to collect sales taxes via Internet Selling
realist
post Jul 19 2010, 02:09 AM
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Anyone who is an Amazon Associate in the US program will almost certainly be aware of the wrangling which has taken place over the past 12 months or so over the legislatures of some states wanting to collect Sales Tax on Internet Sales.

Amazon has resisted this change, and has closed accounts of former Associates in Colorado, North Carolina and Rhode Island.

Amazon has sent a clear message to any state considering passing laws requiring Amazon to collect slaes taxes that it will close Associates' accounts in those states.

Here is what has gone on in the past.

http://www.techjournalsouth.com/2009/06/am...ax-bill-passes/

QUOTE
Amazon threatens to cut off NC associates if state tax bill passes
June 19th, 2009

RALEIGH, NC ‚€“ Amazon.com says that if a new North Carolina tax bill on ‚€œclick-through‚€Ě transactions becomes law, it will cut off its associates in the state.

Amazon associates receive up to 15 percent commissions on sales made via click-throughs on their sites.

In a June 17 letter to its NC associates, Amazon wrote:

‚€œWe regret to inform you that the North Carolina state legislature (the General Assembly) appears ready to enact an unconstitutional tax collection scheme that would leave Amazon.com little choice but to end its relationships with North Carolina-based Associates.‚€Ě

Like many states, North Carolina is struggling with a declining tax base and budget shortfalls due to the recession. It is considering a number of new taxes to help meet the shortfall.

In its letter, Amazon said that because the law is drafted to go into effect as soon as it is enacted, which could be in as little as two weeks, the company would terminate its associates in the state before or on the same day as it goes into effect.

Amazon wrote:

‚€œThe unfortunate consequences of this legislation on North Carolina residents like you were explained in detail to key senators and representatives in Raleigh, including the leadership of the Senate, House, and both chambers‚€™ finance committees.

‚€œOther states, including Maryland, Minnesota, and Tennessee, considered nearly identical schemes, but rejected these proposals largely because of the adverse impact on their states‚€™ residents.‚€Ě

North Carolina General Assembly web site:

http://www.ncleg.net/



When Colorado passed a similar bill this happened-


http://coloradoindependent.com/48639/amazo...-legal-strategy

QUOTE
Enormous online retailer Amazon.com reacted to news that it would now be required to voluntarily report Colorado state sales taxes by canceling its relationship with affiliate web sites here‚€“ that is, with sites that earn a small fee for each websurfer they send to Amazon through links and ads. In a letter sent over the weekend to its Colorado affiliates, Amazon announced it will continue to do business with residents in Colorado and didn‚€™t elaborate on how canceling the affiliate relationships balances against the new tax.

The mystery has led analysts and lawmakers to speculate that the move was done strictly to send a political message. Others suggest the move is part of a larger corporate legal strategy to combat laws already on the books in Colorado, Rhode Island and North Carolina, as well as any future state sales tax laws that might pass around the country.


And when California considered introducing similar laws Amazon wrote to their Governor and others-

QUOTE
The Honorable Arnold Schwarzenegger
Governor, State of California
State Capitol Building
Sacramento, CA 95814

The Honorable Darrell Steinberg
The Honorable Dennis Hollingsworth
The Honorable Karen Bass
The Honorable Sam Blakeslee

Re: Opposition to the New Tax Collection Scheme of AB 178 (Skinner)

Dear Governor Schwarzenegger, Senate President pro Tempore Steinberg, Speaker Bass, Minority Leader Hollingsworth, and Minority Leader Blakeslee:

Amazon.com respectfully opposes the new tax collection scheme of AB 178 (Skinner) and similar nexus legislation because it is unconstitutional and would not be an effective source of revenue.

The U.S. Supreme Court`s Quill decision prohibits a state from requiring sales tax collection by sellers that lack physical presence in the state. The approach of AB 178 is unconstitutional because it ultimately would require sellers with no physical presence in California to collect sales tax merely on the basis of contracts with California advertisers.

If this new tax collection scheme were enacted, Amazon would have little choice but to end its advertising relationships with California-based participants in the Amazon Associates Program. (Participants in the Associates Program place Amazon advertisements on their websites, and then are compensated by Amazon for purchases made by visitors whom they refer to Amazon`s website.)

Anticipating imminent enactment of similar legislation in North Carolina, Amazon already has taken steps to close the accounts of North Carolina-based Amazon Associates, and we will no longer pay referral fees after this closure nor will we accept new applications for the Associates program from North Carolina residents.

Thus, this provision would provide no new tax revenue collected by Amazon or others who sever their relationships with California-based advertisers, and any revenue estimates should take this into account. And, unfortunately, the approach of AB 178 would deny California-based organizations the advertising fees they currently receive from out-of-state retailers.

California instead could heed the direction of the Supreme Court, which said that out-of-state sellers may be required to collect only if states simplify and harmonize their sales tax laws. The well-established multistate Streamlined Sales Tax Project (SSTP) is the legally-permissible path for states to follow. The approach of AB 178 would undermine the purposes and viability of the streamlining effort and, thus, is opposed by the National Conference of State Legislatures (NCSL), the Council on State Taxation (COST), and the Business Advisory Council to the SSTP, all of which support SSTP instead.

In sum, Amazon.com respectfully asks that you oppose the new tax collection scheme of AB 178 and similar nexus legislation. Please let me know if you have any questions. I can be reached at {contact info}

Sincerely yours,
Paul Misener
Vice President for Global Public Policy

cc The Honorable Nancy Skinner; Members of the California State Senate; Members of the California State Assembly


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realist
post Jul 19 2010, 02:13 AM
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I know many states are cash strapped, but to me it seems they met their match with Amazon. Amazon has Associates from all around the world, so there are always others to take up the slack, even if they do terminate some Associates in a few states.

I don't see how the states can benefit if it means that website owners will no longer be able to receive an income from Amazon sales. What they don't earn they don't pay tax on, so how does that benefit the state?

Short sighted, knee jerk actions by state legislatures in my view.

Apparently California backed down, as did Hawaii and a few others, but I reckon it won't be long before the sales tax issue raises its head once more as states fight to balance their books.


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Uncle Awesome
post Jul 19 2010, 05:33 AM
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I assume that the states just feel they will lose earnings coming from amazon but will still gain dollars with people working for other affiliate programs.

In My opinion it's still a bad move. The US government is actually trying to figure out a way so that all online purchases are taxed and revenue goes to the states. I think there are better ways for states to meet their budget then to tax online purchases.


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realist
post Mar 29 2011, 04:03 AM
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Amazon now will not allow residents of Colorado, North Carolina or Rhode Island to participate in the Associates Program. It looks like Illinois is next on this list.

It seems these states are acting in a short-sighted way with this. Affiliates pay tax on their earnings, and spend money with them.

Take the earnings away and what is left?


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Yippee
post Mar 29 2011, 02:45 PM
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I have a friend who was an Amazon affiliate and she just got a termination letter (she is in Illinois) and also received one from another affiliate program which I cannot recall the name. It's unfortunate.


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realist
post Jun 20 2011, 04:00 AM
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The full list is Colorado, Illinois, North Carolina, Rhode Island, and now Connecticut.

It seems California might be next to go ahead with this idiotic law.

Amazon doesn't hold back in its letter to the lawmakers in California. Common sense says that if Amazon remove all Associates in California then the state won't benefit one bit, but will, in fact, lose out with reduced revenue.

http://www.boe.ca.gov/members/runner/newsr...ator_Runner.pdf


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carlmarl
post Aug 26 2011, 11:20 PM
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I believe that this is a really short sighted moves by the relevant states. If you reduce the income of your residents, you get less tax. Not bright!


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realist
post Aug 26 2011, 11:31 PM
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QUOTE (carlmarl @ Aug 27 2011, 08:20 AM) *
I believe that this is a really short sighted moves by the relevant states. If you reduce the income of your residents, you get less tax. Not bright!


True, it smacks of desperation by the states to get some additional revenue in.

The states now affected are: Arkansas, California, Colorado, Illinois, North Carolina, Rhode Island, & Connecticut.


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realist
post Sep 8 2011, 05:45 AM
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Amazon cuts deal on California sales taxes

Legislative leaders agree to let the online retailer delay collecting taxes for a year, while it would drop its battle to overturn the state law. Gov. Jerry Brown has not said if he will support the plan.

http://www.latimes.com/news/local/la-fi-am...story?track=rss


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realist
post Oct 4 2011, 02:14 AM
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It looks like common sense has prevailed, at least in one of those states.

QUOTE
Amazon Re-opens Associates Program to California Residents

California Governor Jerry Brown recently signed legislation repealing the law that had forced us to close the program to California residents. We are pleased to invite all California Associates whose accounts were closed due to the prior legislation to re-enroll in the Program.


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realist
post Oct 19 2011, 01:53 AM
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Seems like Pennsylvania might be headed toward a confrontation with Amazon next.

Interesting in this article about buying items out of state.

QUOTE
The Revenue Department is revising some income-tax forms, asking individuals to report tax owed on purchases made outside the state. Anyone buying items across state lines is supposed to report and pay the ‚Äúuse tax‚ÄĚ ‚ÄĒ equivalent to the 6 percent sales tax ‚ÄĒ to the Revenue Department. Few actually do so.



http://www.pennlive.com/midstate/index.ssf...ounce_sale.html

So, a person living in Texas goes for a break to say Las Vegas and purchases something while there in LV. He is then supposed to return home to Texas and pay additional sales tax to his home state?

That can't be serious can it? rolleyes.gif


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averagemom
post Oct 19 2011, 12:02 PM
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interesting, this is similar to what was happening with their affiliate accounts. My affiliate account was closed when Hawaii state government wanted to impose taxes on Amazon for doing business in the state.

then the government heard the people's pleas and stopped the nonsense and Amazon was able to allow people to open accounts in Hawaii, that was after a whole year or even more.



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realist
post Apr 26 2012, 07:45 AM
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Cook County judge says 'Amazon-tax law' unconstitutional

2011 legislation sent Internet firms fleeing state

11:07 p.m. CDT, April 25, 2012
An Illinois law aimed at leveling competition between online and offline retailers while collecting more state sales taxes is unconstitutional, a Cook County judge said Wednesday.

The opinion is yet another shot in the highly contentious nationwide battle over who should collect online sales tax and how.

Consumers who live in sales-tax states, such as Illinois, owe state sales tax on their Internet purchases, whether they pay it during virtual checkout or when they file their state income tax returns. But few actually pay unless tax is collected at checkout. That has the effect of making online purchases cheaper than those at bricks-and-mortar retailers.

In March 2011, Illinois passed the Main Street Fairness Act, informally dubbed the Amazon-tax law.



http://www.chicagotribune.com/business/chi...0,4850749.story


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