Amazon cuts off Colo. affiliates because of tax
By COLLEEN SLEVIN
Associated Press Writer
Published: Monday, Mar. 8, 2010 - 5:47 pm
Last Modified: Tuesday, Mar. 9, 2010 - 8:10 am

link to news item (http://www.sacbee.com/2010/03/08/2592581/amazon-cuts-off-colo-affiliates.html)

DENVER -- Amazon.com Inc. cut ties Monday with Colorado online businesses that help it sell products because of a new state law aimed at getting out-of-state, online retailers to collect sales tax.

The move hurts businesses - many of them small, home-based operations - that earn money by using their Web sites and blogs to link customers to online retailers. Colorado has at least 4,200 such businesses, known as affiliates or associates, accounting for about 5,000 jobs, and most of them rely on Amazon to some degree, according to their trade group, the Performance Marketing Association.

The group's executive director, Rebecca Madigan, said some get only about 10 percent of their revenue from Amazon but others are totally reliant on it.

Colorado's largest affiliate, urlhasbeenblocked.com, works with 5,000 online merchants and will be able to recover from the lost business, president Marc Braunstein said. But many "mom and pop" affiliates will suffer.

"There are a lot of people who are going to be hurt, and that's a shame," Braunstein said.

In an e-mail to affiliates, Amazon said the new sales tax regulations, which took effect last week, were burdensome and unlike rules in any other state. An Amazon spokeswoman declined to elaborate.

The company previously cut off affiliates in two other states that passed online sales tax laws, Rhode Island and North Carolina. Those states said online retailers had a presence there through affiliates and therefore had to pay sales tax. At the urging of affiliates, Colorado lawmakers took a different approach that attempted to leave affiliates out of the fight.

The law here says retailers can either collect sales tax or send customers an annual statement telling them how much they spent and how much sales tax they should pay the state on their own. The state would be able to force retailers to turn over customer sales records to enforce the law.

Democratic lawmakers, including Gov. Bill Ritter, criticized Amazon for cutting off affiliates, with some calling it "corporate bullying." They said Amazon will still be on the hook to either collect the tax or tell their customers to pay it.

"They've done nothing here but spit in our face," Senate Majority Leader John Morse said.

Braunstein said he was also puzzled by the move and wondered if the company was trying to make some kind of point.

Republican lawmakers, who opposed the online sales tax bill and other tax hikes to balance the budget, criticized Democrats for pushing ahead with it.

"It's exactly what we said would happen. They're going to put people out of work. It's a game of chicken with people and their jobs, and they lost," said House Minority Leader Mike May, R-Parker.

Sen. Greg Brophy, R-Wray, said lawmakers should move to repeal the law.

"Their actions have had real-life consequences for real-life Colorado citizens," he said.

Sounds like state greed to me and not so much Amazon. Sure I believe the Democrates are right, Amazon is trying to make a point. That they (and hopefully more Americans) wont sit by idly while governments try to tax everything and anything possible. I find it absolutely absurd to blame Amazon for any of this. Last I checked Amazon would be hurting a little from this and Amazon doesn't make bills for states to follow. Politicians are so stupid its scary.

What does http://urlhasbeenblocked.com/ have to do with this?

j/k, but who is urlhasbeenblocked.com in this instance?

shop
at home
.com

[/SD censorship]

As much as i like the fact that online purchases aren't usually subject to sales taxes, I think an ability to tax these purchases needs to be put into place soon. States need tons of money for everything from schools, roads, services, jails, etc.--and these costs are going up. And seeing as that they collected this sales tax revenue before but cannot anymore due to the fact that these purchasers are using the internet--it seem appropriate to me that they tax sales made over the internet.

shop
at home
.com

[/SD censorship]

Ahhh, I see now...

As much as i like the fact that online purchases aren't usually subject to sales taxes, I think an ability to tax these purchases needs to be put into place soon. States need tons of money for everything from schools, roads, services, jails, etc.--and these costs are going up. And seeing as that they collected this sales tax revenue before but cannot anymore due to the fact that these purchasers are using the internet--it seem appropriate to me that they tax sales made over the internet.

They're already taxed, this is just about the states trying to force companies like Amazon to collect and submit the tax rather than relying on their residents to pay the tax.......

As much as i like the fact that online purchases aren't usually subject to sales taxes, I think an ability to tax these purchases needs to be put into place soon. States need tons of money for everything from schools, roads, services, jails, etc.--and these costs are going up. And seeing as that they collected this sales tax revenue before but cannot anymore due to the fact that these purchasers are using the internet--it seem appropriate to me that they tax sales made over the internet.

But without the internet these states would never see these sales anyways. So whats the difference? Now if it was common for people to drive cross country to buy things I could understand but its not.

Also online sales within your own state are still taxable.

My question again is - way back when catalog shopping was popular, did people pay taxes on those purchases? Did the companies charge the taxes?

They're already taxed, this is just about the states trying to force companies like Amazon to collect and submit the tax rather than relying on their residents to pay the tax.......

The "use tax" is impossible to implement. IMO, if company X wants to sell goods to people in my state, company X should collect sales tax.

But without the internet these states would never see these sales anyways. So whats the difference? Now if it was common for people to drive cross country to buy things I could understand but its not.

The difference is that they'd probably buy something else IN the state. If i was going to buy a new flat screen due to some slickdeal where it is shipped from X state---if i didn't have the internet to find me a great deal, i'd probably need to go to Best Buy or somewhere else to buy one locally.

States are losing out big here.


I know everyone hates paying taxes---but DMVs that function properly, fire/police/schools that are top notch, roads w/o pot holes, etc. aren't free.

My question again is - way back when catalog shopping was popular, did people pay taxes on those purchases? Did the companies charge the taxes?

Only as a use tax--not sales tax.

As much as i like the fact that online purchases aren't usually subject to sales taxes, I think an ability to tax these purchases needs to be put into place soon. States need tons of money for everything from schools, roads, services, jails, etc.--and these costs are going up. And seeing as that they collected this sales tax revenue before but cannot anymore due to the fact that these purchasers are using the internet--it seem appropriate to me that they tax sales made over the internet.

No, the states don't "need" tons of money. The politicians want tons of money so they can pay off their contributors. I'd rather not be a party to it.

The "use tax" is impossible to implement. IMO, if company X wants to sell goods to people in my state, company X should collect sales tax.

The difference is that they'd probably buy something else IN the state. If i was going to buy a new flat screen due to some slickdeal where it is shipped from X state---if i didn't have the internet to find me a great deal, i'd probably need to go to Best Buy or somewhere else to buy one locally.

States are losing out big here.

I know everyone hates paying taxes---but DMVs that function properly, fire/police/schools that are top notch, roads w/o pot holes, etc. aren't free.

Only as a use tax--not sales tax.

States tax everyone in so many different ways as it is. States are just looking for new ways to put money in their pockets. If getting tax money is so important than why are so many governments giving out huge tax breaks to corporations? We've seen in 2009 that these tax breaks dont always pan out when companies are forced to go under.

There are bigger/better ways to get tax money but these politicians know its easier to tax the poorly represented people than it is to try and tax big companies. Look at Cali. That states is doing horrible yet everything there is so expensive and yes taxed like crazy. What we need is smarter government and not more taxes.

Democratic lawmakers, including Gov. Bill Ritter, criticized Amazon for cutting off affiliates, with some calling it "corporate bullying." They said Amazon will still be on the hook to either collect the tax or tell their customers to pay it.

"They've done nothing here but spit in our face," Senate Majority Leader John Morse said.

Braunstein said he was also puzzled by the move and wondered if the company was trying to make some kind of point.
:roll: :lmao:

Businesses need to TELL their customer to pay the sales tax now? When did they start working for the state?

As much as i like the fact that online purchases aren't usually subject to sales taxes, I think an ability to tax these purchases needs to be put into place soon. States need tons of money for everything from schools, roads, services, jails, etc.--and these costs are going up. And seeing as that they collected this sales tax revenue before but cannot anymore due to the fact that these purchasers are using the internet--it seem appropriate to me that they tax sales made over the internet.

The "use tax" is impossible to implement. IMO, if company X wants to sell goods to people in my state, company X should collect sales tax.



The difference is that they'd probably buy something else IN the state. If i was going to buy a new flat screen due to some slickdeal where it is shipped from X state---if i didn't have the internet to find me a great deal, i'd probably need to go to Best Buy or somewhere else to buy one locally.

States are losing out big here.


I know everyone hates paying taxes---but DMVs that function properly, fire/police/schools that are top notch, roads w/o pot holes, etc. aren't free.



Only as a use tax--not sales tax.


When governments get to the point that they spend money wisely instead of wasting tons of it, perhaps more people might subscribe to your view.

As it stands now, governments simply have a voracious appetite and rarely see anything that the DON'T want to spend money on.

In short, it would be like you walking through the mall and instead of merely noting the things that you would LOVE to buy, you would buy everything that you see and then bill everyone else in order to pay for it all.

States tax everyone in so many different ways as it is. States are just looking for new ways to put money in their pockets. If getting tax money is so important than why are so many governments giving out huge tax breaks to corporations? We've seen in 2009 that these tax breaks dont always pan out when companies are forced to go under.

There are bigger/better ways to get tax money but these politicians know its easier to tax the poorly represented people than it is to try and tax big companies. Look at Cali. That states is doing horrible yet everything there is so expensive and yes taxed like crazy. What we need is smarter government and not more taxes.

There's a very simple reason to give tax breaks to companies. They are the ones that provide JOBS. Without them, everyone would be unemployed. :)

http://news.cnet.com/8301-13578_3-10465658-38.html
Jeremy Bray received an e-mail message this morning with an unwelcome surprise: Amazon.com told him it had canceled its affiliate program, which provides small payments for referring customers, for everyone in the state of Colorado.

The reason? A state law, which Democratic Gov. Bill Ritter signed last week, slaps onerous new restrictions on large out-of-state sellers like Amazon, which said it has no choice but to end its marketing program in response.

Bray, a blogger who has lived in Pueblo, Colo., for more than 20 years, told CNET on Monday that he's now trying to "bring as much attention to the issue as possible in hopes of getting Colorado to repeal" the new law.

Colorado is not alone. Fifteen other states have considered or are considering enacting laws targeting Amazon and other e-commerce companies that typically do not charge sales tax for shipments sent outside their home state, according to a report released Monday. Four states including Colorado have already enacted them.

"I see this as a trend moving along--a lot of states are considering doing it," said Joseph Henchman, director of state projects at the non-partisan Tax Foundation in Washington, D.C., which published the report. But, Henchman says, the laws "won't solve short-term budget problems, they signal business-unfriendliness, and they're probably unconstitutional."

The justification for the laws is a reprise of arguments that state tax collectors have made for at least a decade: they claim that Amazon, Overstock.com, Blue Nile, and other online retailers that don't collect taxes are unreasonably depriving states of revenue, and that they enjoy an unfair competitive advantage over local retailers that must collect taxes.

On the other hand, a 1992 Supreme Court ruling says that, in general, retailers can't be forced to collect sales tax on out-of-state shipments unless they have offices in those states.

New York, North Carolina, and Rhode Island have enacted laws saying that if a retailer runs an affiliate program with referral payments, that's enough to trigger tax collection requirements. California, Illinois, Iowa, Maryland, New Mexico, Vermont, and Virginia are among those states with similar measures currently pending; in Virginia, one chamber of the state legislature has approved the bill.

"This is a huge trend and it's one that we think is misguided," says Braden Cox, policy counsel for the NetChoice coalition, whose members include eBay, Expedia, and Yahoo.

While states hope that this will raise tax revenue, Cox says, anti-Amazon laws could actually reduce revenue by forcing retailers to curtail affiliate programs. "Who are the companies that are the affiliates? They're small companies...If Amazon and others break that relationship, it's the small companies in those states that are going to be hurt."

Probably the highest-profile anti-Amazon law to date is the New York version, which was enacted two years ago. Amazon responded with an immediate lawsuit claiming the statute was unconstitutional because an affiliate program does not amount to a presence in the state; it lost before a trial court and has appealed.

Brad Maione, director of the state tax department's public information office, declined to comment except to say the lawsuit is "ongoing and we're awaiting a decision." Amazon did not respond to requests for comment on Monday.

While New York, Rhode Island, and North Carolina are attempting to force Amazon to collect taxes directly, the final version of the Colorado legislation removed the affiliate portion but did include a requirement that Amazon notify residents that they are required to pay taxes. (The concept is known as a "use tax," meaning residents of a state with a high tax rate shopping in a low-tax state are legally obliged to pay the difference.)

Michael Mazerov, a senior fellow at the Center on Budget and Policy Priorities, which has defended New York's approach, says the outcome of the appeals process could influence other states.

"If the appellate court upholds the trial court's decision, then I do think there will be additional states that will look very seriously at this," Mazerov said. "And I think other states will look seriously at what Colorado has done." It's reasonable, he said, "for states to take action to ensure that their in-state business are not harmed by out of state businesses."

In Colorado, the response among Web publishers that rely in part on revenue from affiliate links has been furious. On Twitter, comments have included ones like: "Amazon just dropped me as an affiliate, killing my new business." "Thanks Colorado gov! You just put so many people out of work!" "Colorado legislature raised state unemployment with this."

"Signing these bills was not something I wanted to do," Ritter, the Democratic governor, said in a statement. "But it was something that was necessary in order to keep the budget balanced...My sincere thanks to those lawmakers who supported this package of bills and made the difficult but right decisions for the future of Colorado."
Greg Brophy, a Republican state senator and assistant minority leader, told CNET that he'd like to introduce an emergency repeal measure and has been talking with the Democratic leadership.

"I have discussed the possibility of a repeal with leadership," Brophy said. "They are meeting this afternoon, but after their initial reaction, I don't hold out a lot of hope."

Update 7:40 p.m.: The Denver Post has posted a comment from Colorado Gov. Bill Ritter, a Democrat who signed the bill into law last week: "Amazon has taken a disappointing - and completely unjustified - step of ending its relationship with associates. While Amazon is blaming a new state law for its action, the fact is that Amazon is simply trying to avoid compliance with Colorado law and is unfairly punishing Colorado businesses in the process."

There's a very simple reason to give tax breaks to companies. They are the ones that provide JOBS. Without them, everyone would be unemployed. :)

Yes, I know. The company I work for got 30 millions in tax breaks in 2008. At the end of 2009 they laid off some 500 people directly and another 500-700 contract employees. Awesome awesome deal for this area right? But yes they do donate about 1 million to charities a year and probably spend more publicizing it for the community to know about it.

Person A owns a business in a Colorado strip mall. His overall prices are higher because he has to factor in sales taxes.

Person B owns a business in Colorado and sells online. His overall prices are lower because he doesn't have to factor in sales taxes.

How is this fair to person A?

Person A owns a business in a Colorado strip mall. His overall prices are higher because he has to factor in sales taxes.

Person B owns a business in Colorado and sells online. His overall prices are lower because he doesn't have to factor in sales taxes.

How is this fair to person A?

Because Person A wasn't smart like Person B. Hence Person B is punished.

See..makes perfect logical sense :nod:

"Democratic lawmakers, including Gov. Bill Ritter, criticized Amazon for cutting off affiliates, with some calling it "corporate bullying." They said Amazon will still be on the hook to either collect the tax or tell their customers to pay it."

First off let me just say I do pay taxes on an estimated amount of purchases when I file my income taxes. I don't see how Amazon is "on the hook to collect the tax or tell their customers to pay it". It's not a busnesses responsibility to tell a states residents how to file their tax return nor is it their responsibility to collect sales tax in an area where they don't have a presence. What a dumbass...

The lawmakers may not like it but then again they are the ones that pass the bills. It's a lot easier to blame big bad Amazon and not themselves or their constituents who are actually the ones who aren't paying use tax...

And oh, dzap, since your post is above mine I checked out that college "humor" link. I surely hope you aren't anybody in the video as it was more sad to watch than anything... Too much caffeine, sugar, and low camcorder prices have led to many a bad video. SVP of size jokes? SVP of Wordplay? SVP of Kindle Jokes? SVP (sp) of Useless Jokes? Since we're making up titles here the only thing missing was the CEO of Douchebagery? :D That said, one of the other videos did look funny :D

Person A owns a business in a Colorado strip mall. His overall prices are higher because he has to factor in sales taxes.

Person B owns a business in Colorado and sells online. His overall prices are lower because he doesn't have to factor in sales taxes.

How is this fair to person A?


Ok, first off that's not how it's happening if I understand correctly. Affiliates in Colorado are having to collect sales tax on sales within their own states. The law passed would make Amazon.com, an Oregon company (if I recall correctly) collect sales tax in a state where they have no presence, for their sales as well.

Why is it fair to punish Amazon.com yet not other companies that operate outside of Colorado and don't have affiliates (not employees, sales reps, or anything directly related), in state? Companies do this shit all the time. They structure themselves legally in a way that puts their on-line sales in one company and their manufacturing, distribution, and admin companies in another company. That way they don't have a nexus in all the states. I'm not saying in general that is a fair practice but they're singling out Amazon with this bill rather than addressing the problem really isn't exactly fair either and then to try and make them look like the bad guys because Coloradoians can't properly book use tax is ridiculous.

I know everyone hates paying taxes---but DMVs that function properly, fire/police/schools that are top notch, roads w/o pot holes, etc. aren't free.

Where do you live cuz we have none of what you listed despite paying large amounts of ever increasing taxes..

The problem is if the government takes in $X dollars one year they "need" at least that much every following year. If I make less money in 2010 then I also spend less.

What happens when they "need" more money even after they implement a new tax? Well another new tax of course!

Person A owns a business in a Colorado strip mall. His overall prices are higher because he has to factor in sales taxes.

Person B owns a business in Colorado and sells online. His overall prices are lower because he doesn't have to factor in sales taxes.

How is this fair to person A?

Because Person A's business requires sanitation, police, fire, roads, water, and all types of other public services provided by the city. A warehouse out of state does not.

Because Person A's business requires sanitation, police, fire, roads, water, and all types of other public services provided by the city. A warehouse out of state does not.

Re-read the post you quoted. Slowly.

Yes, I know. The company I work for got 30 millions in tax breaks in 2008. At the end of 2009 they laid off some 500 people directly and another 500-700 contract employees. Awesome awesome deal for this area right? But yes they do donate about 1 million to charities a year and probably spend more publicizing it for the community to know about it.

So how many people does the company still employ there ??

It's not about how much the companies donate to charity, rather, it's how many people they employ, how that enlarges the tax base directly along with the secondary effects on the local economy.

Think about it this way, a Widget plant in West Virgina shuts down. Not only do all the employees lose their jobs, but all the shops on Main Street take a huge hit as well seeing as how a large portion of their customer base are unemployed now.

Stop and think a bit about how much tax revenue is actually generated by a single working person then multiply that by the total number of employees.

Oh the irony of legislators implementing draconian tax policies only to hurt small business.

Bravo Amazon, I am reminded, again, of why I do business with you.

Person A owns a business in a Colorado strip mall. His overall prices are higher because he has to factor in sales taxes.

Person B owns a business in Colorado and sells online. His overall prices are lower because he doesn't have to factor in sales taxes.

How is this fair to person A?

You can't own a business in Colorado and not collect sales tax, you can own a business outside of Colorado and ship to Colorado, and not collect sales tax. It's not about being fair, it's about the State of Colorado having no right to regulate interstate commerce. If you drive to Utah and buy something, are you searched and charged sales tax upon your return home? Do they track your credit card purchases out of state and apply sales tax? Why is this standard being upheld simply because of technology? If I own a store in Utah and you call me and buy something and ask me to ship it to you, I don't have to charge you sales tax. But if you come onto my website, I do. Why? I'm not saying that sales tax shouldn't be charged on these things, but it's an issue between the state and their residents. Not an issue between a State and a business that does not exist within that state.

PS- I wish they'd do this in NY too. The added value of having affiliates based in NY is not worth having to pay sales tax for items sold by Amazon.com. I probably only buy about 10% of the stuff that I used to buy when there was no sales tax. There's still some savings, but not enough to justify having to wait for things to be delivered.

Oh the irony of legislators implementing draconian tax policies only to hurt small business.

Amazon isn't exactly a small business. ;)

Because Person A's business requires sanitation, police, fire, roads, water, and all types of other public services provided by the city. A warehouse out of state does not.

We're not talking about Amazon.com. We're talking about Amazon.com's affiliates that are located in Colorado. Both businesses require all the services you mention.

Amazon isn't exactly a small business. ;)

I guess you missed the second paragraph.


The move hurts businesses - many of them small, home-based operations - that earn money by using their Web sites and blogs to link customers to online retailers. Colorado has at least 4,200 such businesses, known as affiliates or associates, accounting for about 5,000 jobs, and most of them rely on Amazon to some degree, according to their trade group, the Performance Marketing Association.

But you're right, amazon isn't a small business. I'm not from Colorado so I don't have a horse in the race and honestly could not care less what the Colorado legislator does to its citizens.

Oh the irony of legislators implementing draconian tax policies only to hurt small business.

Bravo Amazon, I am reminded, again, of why I do business with you.

How do you know that this policy hurts small business in net?

In my example, Person A is hurt by the fact that the state *isn't* enforcing the law. Every retail business with a brick and mortar operation in Colorado has to add sales tax to the "out the door" price it charges. Internet retailers don't have to add that sales tax, but they still have a physical presence in the state. This is an unfair advantage for the internet retailer at the expense of the brick and mortar retailer.

How do you know the new policy doesn't hurt 1 internet business and help 10 brick and mortar businesses?

I guess you missed the second paragraph.

:huh: The move was meant to get taxes from Amazon, not small businesses that already have to collect the tax.

We're not talking about Amazon.com. We're talking about Amazon.com's affiliates that are located in Colorado. Both businesses require all the services you mention.

Amazon's affiliates are merely acting as a conduit for the sale.

It would be link you telling me that Amazon has a widget for sale, me going up to Amazon to buy said widget and entering your name as the referring person.

That's what affiliate links do.

For example, I could set up an affiliate account, then write up a great review of Going Rouge by Sarah Palin and include a link to the book at Amazon. Included within the code for that link would be my affiliate ID#. You click the link and make the purchase BUT I get credit for the sale. Amazon then pays me a small percentage for referring you to them.

:huh: The move was meant to get taxes from Amazon, not small businesses that already have to collect the tax.

You're right, nobody will get hurt.

How do you know that this policy hurts small business in net?

In my example, Person A is hurt by the fact that the state *isn't* enforcing the law. Every retail business with a brick and mortar operation in Colorado has to add sales tax to the "out the door" price it charges. Internet retailers don't have to add that sales tax, but they still have a physical presence in the state. This is an unfair advantage for the internet retailer at the expense of the brick and mortar retailer.

How do you know the new policy doesn't hurt 1 internet business and help 10 brick and mortar businesses?

The only "physical presence" they have in the state usually is that they live there. The webserver hosting the referral site would probably be in another state.

For example, I live in Ky but my website is hosted on a box racked in Jacksonville, Fl.

You're right, nobody will get hurt.

I didn't say that.

Re-read the post you quoted. Slowly.

I know what it said, and I know what I said. What's the problem?

And oh, dzap, since your post is above mine I checked out that college "humor" link. I surely hope you aren't anybody in the video as it was more sad to watch than anything... Too much caffeine, sugar, and low camcorder prices have led to many a bad video. SVP of size jokes? SVP of Wordplay? SVP of Kindle Jokes? SVP (sp) of Useless Jokes? Since we're making up titles here the only thing missing was the CEO of Douchebagery? :D That said, one of the other videos did look funny :D
OT:
:lol: Did you ever watch the iPad ad on Apple's website? They're parodying it off that. I still find it majorly humorous. Not the titles but Apple's use of adjectives "magical" "fantastic" "amazing" etc. have been made into a more abundantly clear video about the iPad. :lol: It's bullcrap. :D

Anyway back on topic...
I personally am with the Republicans on this one. I normally support Democrats..but if you force that 8.75% on everything I buy on Amazon here in California, then there is pretty much absolutely no point for me to buy from them anymore, as I might as well go to a B&M or Costco with their awesome return policy.

For example, I could set up an affiliate account, then write up a great review of Going Rouge by Sarah Palin and include a link to the book at Amazon.

:eek:

:bonk:

I know what it said, and I know what I said. What's the problem?

Both businesses are in-state.

:eek:

:bonk:

Don't worry Cat, I made sure that they shipped your's in a plain brown wrapper so no one else would know :)

Person A owns a business in a Colorado strip mall. His overall prices are higher because he has to factor in sales taxes.

Person B owns a business in Colorado and sells online. His overall prices are lower because he doesn't have to factor in sales taxes.

How is this fair to person A?

Because Person A's business requires sanitation, police, fire, roads, water, and all types of other public services provided by the city. A warehouse out of state does not.

Re-read the post you quoted. Slowly.

I know what it said, and I know what I said. What's the problem?

HondaEnthus..I think what redmaxx is trying to point out, is that you mentioned that the warehouse was "out of state". It is not. thnkpd9 is talking about affiliates, that live, work, and sell in Colorado, to other parts of the country. It's also asking how is it fair to Person A, in which case you mentioned the utilities provided by the city etc. You're just pushing the fact that it IS unfair to Person A, when thnkpd9 was asking more along the lines about why it was unfair to Person B.

At least that was what I got out of it...however I do get that it could be viewed from a different perspective.

How do you know that this policy hurts small business in net?

In my example, Person A is hurt by the fact that the state *isn't* enforcing the law. Every retail business with a brick and mortar operation in Colorado has to add sales tax to the "out the door" price it charges. Internet retailers don't have to add that sales tax, but they still have a physical presence in the state. This is an unfair advantage for the internet retailer at the expense of the brick and mortar retailer.

How do you know the new policy doesn't hurt 1 internet business and help 10 brick and mortar businesses?

Want to talk about fair? The out of state buyer paying the tax will theoretically never see its return. How is that fair?

:eek:

:bonk:

OT: My mother wanted "Going Rogue" for Xmas.. (I rather stab my eyeballs than read a preaching from Sarah Palin)..but it was for her. Due to a spelling error (a very lucky one)

I found this..
http://www.amazon.com/Going-Rouge-Nightmare-Richard-Kim/dp/0757315240
..and gave her that instead. She still doesn't know the difference. :lmao: I don't have the heart to tell her now that she is almost 3/4ths into the book. :lol:

Okay no more OT..I swear :lol:

HondaEnthus..I think what redmaxx is trying to point out, is that you mentioned that the warehouse was "out of state". It is not. thnkpd9 is talking about affiliates, that live, work, and sell in Colorado, to other parts of the country. It's also asking how is it fair to Person A, in which case you mentioned the utilities provided by the city etc. You're just pushing the fact that it IS unfair to Person A, when thnkpd9 was asking more along the lines about why it was unfair to Person B.

At least that was what I got out of it...however I do get that it could be viewed from a different perspective.

The "warehouse" >IS out of state Dzap.

Like I discussed in a previous post, ANYONE could become an Amazon affiliate including you. You draw people to your website through whatever means and you put links to products from Amazon.

Your viewers click the links and make purchases. I.e. they are engaged in a transaction WITH Amazon and the product will be shipped from one of Amazon's warehouses.

All you did was to refer your viewer to Amazon.

That does NOT equate to you having a warehouse in the state.

Want to talk about fair? The out of state buyer paying the tax will theoretically never see its return. How is that fair?

Hmm..I never thought of it that way. This makes a lot of logical sense, since when I buy goods from Amazons UK site, I do not pay VAT, since I am not from the UK nor do I live there. If states want to start doing this I suppose, the tax should be contributed to state of the buyer, rather than the seller. However, every state I suppose would need to participate in this, which is why it's a big loophole, and obviously not in the seller's best interest.

HondaEnthus..I think what redmaxx is trying to point out, is that you mentioned that the warehouse was "out of state". It is not. thnkpd9 is talking about affiliates, that live, work, and sell in Colorado, to other parts of the country. It's also asking how is it fair to Person A, in which case you mentioned the utilities provided by the city etc. You're just pushing the fact that it IS unfair to Person A, when thnkpd9 was asking more along the lines about why it was unfair to Person B.

At least that was what I got out of it...however I do get that it could be viewed from a different perspective.

:nod:

The "warehouse" >IS out of state Dzap.

Like I discussed in a previous post, ANYONE could become an Amazon affiliate including you. You draw people to your website through whatever means and you put links to products from Amazon.

Your viewers click the links and make purchases. I.e. they are engaged in a transaction WITH Amazon and the product will be shipped from one of Amazon's warehouses.

All you did was to refer your viewer to Amazon.

That does NOT equate to you having a warehouse in the state.

Well I was just going off thnkpad9's scenario, not necessarily Amazon's current model. I realize what you're saying, but I was just trying to be relevant to his question.

Well I was just going off thnkpad9's scenario, not necessarily Amazon's current model. I realize what you're saying, but I was just trying to be relevant to his question.

:nod:

Someone gets it! :woot:

Both businesses are in-state.

Yes, but this whole debate is clearly about out of state sales.

I don't really have a problem with the idea since its just more effectively enforcing existing laws essentially, but is now really the best time to be trying to squeeze more money out of people/business?

I think an ability to tax these purchases needs to be put into place soon. States need tons of money for everything from schools, roads, services, jails, etc.--and these costs are going up... it seem appropriate to me that they tax sales made over the internet.

If you really want to help the schools, then you should donate directly to the schools. But even if you donated $100 million to the schools, none of the student would thank you anyway since the money probably ends up lining the pockets of school administrators.

LOL it's more likely the state tax revenue will go straight to PENSIONS e.g. the state worker who worked for 25 years with a final salary of $100k would get for retirement $100k each year for not working plus annual cost of living increases for life until they die.

You really aren't getting much value for your taxes these days. College tuition is going up everywhere (search student protest tuition), the roads are more beat up than ever (especially compared to superior super freeways in modern Asian cities, reduced services (furlough, DMV closed Fridays, garbage pickup twice a month instead of 4 times), jail overcrowding and closing down of existing prison facilities.

If the plan is to stimulate the economy, increasing sales tax close to 10% and applying sales tax on online transactions (close to 10% as well) will only encourage more people to buy LESS, be more frugal and put the economy in prolonged recession. If anything, tax should be reduced to 5% to encourage people to spend more money to increase the velocity of money (frequency of money switching hands).

http://www.dailyfinance.com/story/public-pensions-face-2-trillion-deficit/19303044/

This is terrible news. I think it'll eventually happen in California too. I should get all that I need before it happens. Our tax rate is 8.75% - 10.75% in CA

Just wanted to add that a lot of small business cheat the tax system. Most never report the actual sales earned but rather report it as a "loss". Also, most of these small businesses put their personal spending as the business spending to increase maximum deductible when filing tax. Obviously the small business are not paying the proper tax. So, who is to blame? Accountant or the business owner?

This is terrible news. I think it'll eventually happen in California too. I should get all that I need before it happens. Our tax rate is 8.75% - 10.75% in CA

Just wanted to add that a lot of small business cheat the tax system. Most never report the actual sales earned but rather report it as a "loss". Also, most of these small businesses put their personal spending as the business spending to increase maximum deductible when filing tax. Obviously the small business are not paying the proper tax. So, who is to blame? Accountant or the business owner?

I'm not sure if it's most of the small businesses, but I'm sure it's a good percentage.

The funny thing is, the worst offenders are probably the smaller ones...who rarely get much attention from tax authorities.

And most accountants never see anything other than what the business owner gives them.

I don't really have a problem with the idea since its just more effectively enforcing existing laws essentially, but is now really the best time to be trying to squeeze more money out of people/business?

What the heck do you think they've been doing the past year or so! ;)

I'm not sure if it's most of the small businesses, but I'm sure it's a good percentage.

The funny thing is, the worst offenders are probably the smaller ones...who rarely get much attention from tax authorities.

And most accountants never see anything other than what the business owner gives them.

Yes, a lot of them do because they have smaller chances of being audit. I've seen a lot so it's not uncommon. In the end, it benefits both parties - accountant and the small business owner. So, the only ones who are suffering is us :(

Why the hell hasn't Amazon done this in New York State?

I enjoyed evading the use tax :sadwalk:

Why the hell hasn't Amazon done this in New York State?

I enjoyed evading the use tax :sadwalk:

New York is too big to make an example of. They'd lose revenue.

Colorado is not. Amazon is certainly bullying.

Person A owns a business in a Colorado strip mall. His overall prices are higher because he has to factor in sales taxes.

Person B owns a business in Colorado and sells online. His overall prices are lower because he doesn't have to factor in sales taxes.

How is this fair to person A?
People buy from Person B still have to pay use tax. That's not the fault of Person B.

Person B has to have higher price because they have to factor in shipping. Is that fair to Person B?

Will Colorado go after every single company out there to try and collect this tax? So, those who buy the snuggies, shamwows, slap chops, and buy stuff from QVC...Colorado will be contacting those companies as well?

If Colorado does not target every single internet company that brings in over $100k/year, then I would say Colorado is guilty of discrimination. However, if Colorado does, how much are these letters going to cost to write up, print, and mail? How many people will the state have to hire to handle the increase in paperwork as Coloradans mail in their checks? This tax is going to cost more than it brings in. If the state has to pay someone $10/hour to process checks for $5, where is the benefit?

As of right now, I figure I owe the state $1.54. If I don't buy anything else on-line, I will write a check for $1.54 to the state, put a stamp on it (an additional cost to me), and the state will get 0 benefit from it.

New York is too big to make an example of. They'd lose revenue.

Colorado is not. Amazon is certainly bullying.

I believe Amazon may have actual facilities that they own in NY, iirc.

I believe Amazon may have actual facilities that they own in NY, iirc.

Nope, it was all about the affiliates. They have no operations here.

This is terrible news. I think it'll eventually happen in California too. I should get all that I need before it happens. Our tax rate is 8.75% - 10.75% in CA

Just wanted to add that a lot of small business cheat the tax system. Most never report the actual sales earned but rather report it as a "loss". Also, most of these small businesses put their personal spending as the business spending to increase maximum deductible when filing tax. Obviously the small business are not paying the proper tax. So, who is to blame? Accountant or the business owner?


I blame the government for have such a high tax that people go out of their way to avoid it.

I blame the government for have such a high tax that people go out of their way to avoid it.

High taxes are relative. I'd argue that the problem is the discrepancy between taxation levels, not the actual level. People will always try to avoid extra costs, whether they are "high" or not.

Nope, it was all about the affiliates. They have no operations here.

Doesn't Amazon actually collect the tax in NY. Strange that they would agree to do that just because of affiliates.

Nope, it was all about the affiliates. They have no operations here.


I see it here...... (http://www.amazon.com/gp/help/customer/display.html?nodeId=468512)


Items Shipped to New York State
Effective June 1, 2008, Amazon.com LLC will begin collecting sales tax on items shipped to destinations within the State of New York as New York has enacted a new law requiring out-of-state sellers to collect and remit sales tax based on advertising. Amazon has filed a lawsuit challenging the constitutionality of this provision. However, as required by the law, we must still begin collecting New York sales tax beginning on that date.

Doesn't Amazon actually collect the tax in NY. Strange that they would agree to do that just because of affiliates.

That's why they sued, but the judge agreed with NYS.

http://www.theregister.co.uk/2009/01/12/amazon_tax_ruling/

A New York Supreme Court judge has approved the state's new-fangled Amazon Tax.

Earlier this year, Amazon.com and Overstock.com sued New York over an ingenious new law that forces the big-name online retailers to collect sales tax if they maintain affiliate networks in the Empire State, and this afternoon, Judge Eileen Bransten dismissed them both.

Bransten handed down her final dispositions in the two cases, which have been watched with a certain amount of trepidation by online retailers because of the precedent it could set for tax collection in states where they do not maintain offices.

Amazon and Overstock did not immediately respond to request for comment.

Back in April 2008, as part of its budget, New York enacted a new tax law called the Commission-Agent Provision, which requires out-of-state retailers to collect and remit sales and use taxes if they have a commission agreement with an in-state resident based on the referral of customers (provided that resident earns more than $10,000 in revenues from New Yorkers).

A 1992 US Supreme Court decision says that retailers needn't collect sales tax unless they have a physical presence in the state where the customer resides. Otherwise, customers are required to declare the tax on their tax returns. But few do. With its new law, New York hung that physical presence tag on affiliate marketers.

On April 25, Amazon sued New York's taxation department. Then, in May, Overstock suspended its relationships with any affiliates that had a New York address. And in June, the company sued the state, challenging the constitutionality of the tax law.

Both Amazon's and Overstock's lawyers contended that the law violates the Commerce Clause of the U.S. Constitution and the Due Process Clauses of the Fourteenth Amendment to the Constitution and sought a permanent injunction prohibiting New York from enforcing the law.

Amazon said it did not have a sufficient nexus (physical presence) in the state to be compelled to collect sales taxes and basically contended that it was being singled out with this tax law tweak. In the dance of the lawyers, New York moved to dismiss the Amazon and Overstock complaints, before Amazon and Overstock opposed the motions and moved for summary judgment from the court.

Judge Bransten basically shot down all of the company's claims that New York state was picking on Amazon because it needed the dough.

"In the end, the Commission-Agreement Provision does not broadly tax any and all Internet sales to New York consumers," she wrote in her ruling. "It requires a substantial nexus between an out-of-state seller and New York through a contract to pay commissions for referrals with a New York resident along with realization of more than $10,000 of revenue from New York sales earned through the arrangement. The neutral statute simply obligates out-of-state sellers to shoulder their fair share of the tax collection burden when using New Yorkers to earn profit from other New Yorkers."

The dismissal of the Overstock case was based on the ruling Judge Bransten made in the Amazon case. It is fairly certain that both Amazon and Overstock will appeal these rulings. If they decide to, they will take up their cause with the New York State Supreme Court Appellate Division, and then it would go up higher to the New York State Court of Appeals. Because it is a constitutional issue, it could in theory get to the U.S. Supreme Court.

Don't spend that tax money just yet, guv'ner. ®

one has to ask, is CRAIGS LIST is next???? :eek:

Doesn't Amazon actually collect the tax in NY. Strange that they would agree to do that just because of affiliates.

Shaggy beat me to it.

They fought it in court and lost, but NY is too large to throw away regardless of losing their competitive advantage.

Shaggy beat me to it.

They fought it in court and lost, but NY is too large to throw away regardless of losing their competitive advantage.

Are NY affiliates too large to throw away? I don't know about that. We're not talking about banning sales to NY, but about shutting down affiliates with NY addresses.

one has to ask, is CRAIGS LIST is next???? :eek:

There's no paper trail for Craiglist, so my guess is no. I would think eBay could be next. If you sell something to a buyer in the same state, it's feasible that they could implement a tax-collection protocol right into paypal.

Are NY affiliates too large to throw away? I don't know about that. We're not talking about banning sales to NY, but about shutting down affiliates with NY addresses.


Yeah, I think its not a stretch to say that there's more business gained from NY affiliates than CO affiliates.

Amazon wants to make sure other states don't do this sort of thing.

I believe Amazon may have actual facilities that they own in NY, iirc.

I don't think so, I think they just don't want to cut off NY affiliates. They're challenging NY's law in the federal court system which they wouldn't bother doing if they had a physical presence anyway.

Add California to the list. Surprising that they were willing to cut off CA affiliates, but decided to sue in court in NY a few years ago. Both are much bigger states than CO.

Amazon drops California associates to avoid sales tax (http://money.cnn.com/2011/06/29/technology/california_amazon_associates/index.htm)

NEW YORK (CNNMoney) -- Amazon said Thursday it is terminating its relationship with thousands of California associates because of a new law that would require the online mega-retailer to collect sales taxes if it has affiliates in the state.

Governor Jerry Brown signed the measure into law on Thursday as part of the state's plan to reduce its budget gap. It is expected to add $200 million to the Golden State's coffers.

Other states that have passed the so-called "Amazon tax" in recent years include Connecticut, Illinois, New York, North Carolina, Arkansas and Rhode Island. The retailer has dropped the associates program in all these states, except New York, where it has a brought a lawsuit against the state.

Amazon's (AMZN, Fortune 500) associates program provides a commission to website or blog operators who refer shoppers to the retailer's site. The operators are paid if the shopper makes a purchase.

The retailer, which has had associates in California for more than a decade, works with 10,000 affiliates in the Golden State. They range from mom-and-pop shops who participate to supplement their income to larger companies that survive on marketing referrals, said Rebecca Madigan, executive director, Performance Marketing Association, a trade group.

The law could force some affiliates to close their doors, said Steve Gill, an accounting professor at San Diego State University.

It could be "devastating for certain businesses in California," he said.

I wish they had dropped the NY affiliates too :sadwalk: I miss no Amazon taxes :crying:

Is the state of Calif. getting more money from taxing affiliates or from Internet sales taxes?

They gotta make up all the lost taxes on the 1% tax reduction (or actually restoration) I suppose that's going in to effect tomorrow :D

And ya, I do wonder what's the net/net here. These affiliates will no longer generate revenue from this source so they will have less taxable income (wages) but the state may get more in internet sales tax collection. I guess we'll see in a while how much it helped/hurt...

I wish they had dropped the NY affiliates too :sadwalk: I miss no Amazon taxes :crying:

I thought the thing with NY was that it didn't matter whether you had affiliates or not. Regardless they were supposed to charge tax to NY residents? Guess not :eek:

The measure states that any online retailer that generates more than $10,000 in sales via in-state sales affiliates must collect New York sales tax. Many online retailers, including Amazon.com and Buy.com, have sales affiliates nationwide that link to the retailer's web site and are paid commission on any sales generated from their referrals. New York's measure clarifies state tax law to say that sales affiliates based in the state are representatives of the online retailer. This means that the retailer has nexus (i.e., a physical presence) in the state and is required to collect state sales taxes.

They gotta make up all the lost taxes on the 1% tax reduction (or actually restoration) I suppose that's going in to effect tomorrow :D

And ya, I do wonder what's the net/net here. These affiliates will no longer generate revenue from this source so they will have less taxable income (wages) but the state may get more in internet sales tax collection. I guess we'll see in a while how much it helped/hurt...

uh, now they get NEITHER. Amazon doesn't have to collect taxes for CA, and CA now no longer gets income tax revenue from in-state affiliates who have lost their agreement with amazon.

I thought the thing with NY was that it didn't matter whether you had affiliates or not. Regardless they were supposed to charge tax to NY residents? Guess not :eek:

The measure states that any online retailer that generates more than $10,000 in sales via in-state sales affiliates must collect New York sales tax. Many online retailers, including Amazon.com and Buy.com, have sales affiliates nationwide that link to the retailer's web site and are paid commission on any sales generated from their referrals. New York's measure clarifies state tax law to say that sales affiliates based in the state are representatives of the online retailer. This means that the retailer has nexus (i.e., a physical presence) in the state and is required to collect state sales taxes.

Couldn't remember how it was written.... in that case... fark :crying:

Couldn't remember how it was written.... in that case... fark :crying:

So why don't they just get rid of the in-state affiliates like they did in California? It seems like they could do that in every state but Washington. Perhaps they have too many warehouses in NY?

So why don't they just get rid of the in-state affiliates like they did in California? It seems like they could do that in every state but Washington. Perhaps they have too many warehouses in NY?

They don't have any warehouses in NY. My guess is that NY has too many affiliates, due to NY being the U.S. center of advertising.