Amazon to cut off California-based Web affiliates

[Teh One Who Knocks]

The Associated Press


SAN FRANCISCO – Amazon.com Inc. said Wednesday that it will stop working with online affiliates based in California since the state passed a new rule that forces online retailers to collect sales tax there.

In an email Wednesday to California-based affiliates — individuals or companies who run websites that refer visitors to Amazon and then get a cut of any resulting sales — the Seattle-based company said it would cut ties with those who reside in the nation's most populous state if the law became effective. Gov. Jerry Brown signed the law Wednesday as part of a larger state budget package.

The rule requires online retailers such as Amazon to collect sales taxes if they have in-state affiliates.

In its email, Amazon called the bill "unconstitutional" and "counterproductive."

Passage of the law, which is projected to net $200 million annually, adds California to a growing list of states that have enacted such legislation in hopes of bringing in more tax revenue.

Billions of dollars are at stake as a growing number of states look for ways to generate more revenue without violating a 1992 U.S. Supreme Court ruling that prohibits a state from forcing businesses to collect sales taxes unless the business has a physical presence, such as a store, in that state. When consumers order from out-of-state retailers, they're supposed to pay the tax that is due, but they rarely do and it's difficult to enforce.

States are trying to get around the Supreme Court restriction by passing laws that broaden the definition of a physical presence. Online retailers, meanwhile, are resisting being deputized as tax collectors.

California will become the latest state in which Amazon has parted ways with members of its Amazon Associates Program. Already it has said goodbye to affiliates in states including Arkansas, Connecticut and Illinois due to the passage of similar online sales tax laws. Smaller competitor Overstock.com Inc. has shuttered its affiliate programs in several states due to the laws as well.

California passed such a law in 2009, but then-Gov. Arnold Schwarzenegger vetoed it.

[PorkChopSandwiches]

If anyone else sells something from CA to someone in CA they have to collect sales tax.

[PorkChopSandwiches]

Passage of the law, which is projected to net $200 million annually, adds California to a growing list of states that have enacted such legislation in hopes of bringing in more tax revenue.

I like this part, how will you get any money when all those business just lost all their ability to sell shit now that amazon and overstock have cancelled all ties with any CA business as of today

[Muddy]

Virginia charges sales tax on online purchases. If you live in Virginia and buy from an online company in Va. then you pay the 5%.

[PorkChopSandwiches]

Not when you buy from Amazon.

[Muddy]

I think you're wrong.

Now.. there may not be any Amazon hubs in the state either.

[PorkChopSandwiches]

Go thru the process to make a purchase and see (just dont complete it). The law has been if you buy something from one state and ship it to another, no tax is charged. Amazon makes sure that the stuff is always shipped from out of state so you dont have to pay the tax.

[Teh One Who Knocks]

Virginia charges sales tax on online purchases. If you live in Virginia and buy from an online company in Va. then you pay the 5%.

You're only required to pay sales tax on online purchases if the retailer you buy from has a physical presence in your state you are living in.

Unless Virginia is one of those states that passed a new law to try and get sales tax.

[Muddy]

You're only required to pay sales tax on online purchases if the retailer you buy from has a physical presence in your state you are living in.



Exactly, thats what I mean.

[Teh One Who Knocks]

I like this part, how will you get any money when all those business just lost all their ability to sell shit now that amazon and overstock have cancelled all ties with any CA business as of today

What sucks is, they (these states) are trying to use a loophole in the law...they are going after affiliates that steer business to Amazon even when Amazon has no physical presence in California.

Fucking states are trying to squeeze everyone just because they don't know how to balance a budget :roll:

[Teh One Who Knocks]

Exactly, thats what I mean.

I'm pretty sure that Amazon has no physical presence in Virginia, so that means you don't have to pay sales tax if you buy from them.

[PorkChopSandwiches]

:ops:

[Muddy]

I'm pretty sure that Amazon has no physical presence in Virginia, so that means you don't have to pay sales tax if you buy from them.

But see Amazon is more than Amazon owned locations... They have thousands of authorized resellers... So even though you are clicking amazon.. It may not come from one of their hubs..

[AntZ]

:facepalm:


Hey Porky! You're as bad as Hal! :huh:


You think you've edited out your personal info, and leave your name for the whole world to see! :lol:

[PorkChopSandwiches]

D'oh, thanks. It still took me a minute to find it after you mentioned it :lol:

[AntZ]

D'oh, thanks. It still took me a minute to find it after you mentioned it :lol:

I order a ton of shit from Amazon all the time, I know that page well.


It was no biggie to me, I've known your real name for a long time now anyways! :giggle:

[PorkChopSandwiches]

Yeah, quit a few people here do, but I dont want it out for the world to see :lol:

[Deepsepia]

When consumers order from out-of-state retailers, they're supposed to pay the tax that is due, but they rarely do and it's difficult to enforce.

This is the part most people don't know, and it ultimately makes Amazon's position look like facilitating tax evasion.

When a New York resident buys something out of state, they're supposed to pay a New York "use tax", at the same rate as the sales tax that would have been collected had they bought in-state. Willfully failing to pay that tax is tax evasion. About the only time this is picked up by state tax authorities are on very big ticket items that have to be registered (eg boats, cars).

Amazon's claim that it would be burdensome to calculate sales tax (and I haven't heard them repeat that nonsense recently, but it used to be their position), is clearly in error for one of the world's most sophisticated IT companies.

So in this, the core of the law is not that you don't have to pay tax on out of state purchases, but rather that Amazon is acting to help its customers evade these taxes.

I've attached a bit of the Texas Use Tax form -- its typical of these taxes, California, New York, Florida, Georgia etc all would be similar. The slightly weird wrinkle about a Use Tax is that it doesn't apply if you don't bring the item "into use" in your state of residency. For example, if a New York resident buys a car in Delaware, registers it there-- no use tax would be owed. However, the moment he drives the car in NY State, he'll owe that tax-- although after some period of time, he might not owe it . . . John Kerry's yacht was a rather celebrated example of this kind of issue.

http://picload.org/image/llwccd/previewscreensna.jpg

[AntZ]

Today, I went to one of my favorite web based music channels to look up a song name. I listen through one of the WD Player's internet media channels called "TuneIn". While looking at the song name, they normally direct link to Amazon so you can see the disc, today it kicked over to this page:


No Longer Available

We no longer link to Amazon.com as they have dropped us from their affiliate program (along with all other California affiliates) as a protest against a new sales tax law. We are greatly disappointed at Amazon's juvenile behavior on this matter. Please read this news article for more details.

SomaFM was very dependent on the commissions from this affiliate program, and we are disappointed at the way Amazon and the State of California have handled this situation. Once again, it's the little businesses that get screwed.

We also ask that you shop at another online music store besides Amazon.com, who has proven that they don't care about their customers and business partners.


http://somafm.com/amazon.html



It's rather amazing that they are pissed at Amazon for screwing them over, and they encourage people to take their business elsewhere. I know that this site is run by a bunch of lefties, so I wouldn't expect them to criticize Sacramento!

Who exactly doesn't care about small businesses? The state of California is out of control! They refuse to make substantial cuts from anything, and in the end, it was collecting new taxes that will bail out that historically incompetent hack Jerry Brown. The taxes will be collected from residents making purchases! So the future $300 million + that they are high fiving each other over, will be coming out of the pockets of the people! That's 300 million more in new taxes that was spent on other things last year, and helped the economy, now it will go to Sacramento where they certainly know where best to waste it. Sales will drop, and soon they will whine that more taxes are needed to replace the short fall. :roll:



......California's new law was drafted to circumvent a 1992 U.S. Supreme Court ruling that sellers can't be forced to collect sales taxes unless they have a physical presence in the state.

The new statute would establish that presence in two ways: when sellers pay commissions to other Internet sites in California, known as affiliates, that refer buyers; and when sellers have a related company operating in the state.

Amazon has thousands of such affiliates in California. It also has related business operations that include Lab126 Inc. in Cupertino, which develops Kindle electronic book readers, and a Studio City office for its Internet Movie Database unit.

One affiliate, Ken Rockwell of San Diego, the owner of a 12-year-old photography website, said he planned to move out of state.

"Will it be Las Vegas or Scottsdale or Ensenada?" he said. "It's a question of where, not if."

http://www.latimes.com/business/la-fi-amazon-tax-20110630,0,4344787.story



It was simple, Amazon was forced to cut those ties that the new law was using to link them to California.