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Amazon Cuts Off North Carolina Affiliates

ScuttleMonkey posted more than 5 years ago | from the court-of-public-opinion dept.

The Internet 411

Amazon.com has reportedly cut off all affiliates in North Carolina as a preemptive response to the sales tax change being pushed through the state legislature. The Seattle-based online retailer warned affiliates last week that such a move might be necessary, but the early shutoff seems to be a move in hopes of swaying opinion on the proposed legislation. "Local affiliates say they were 'blind-sided' by the company's action. 'I got this e-mail at 4:30 this morning,' said James Barrett, a technology consultant from Winston-Salem. 'It wasn't saying your account will be shut down. It said it is shut down. That just blew me up right there.' Barrett said that he is frustrated at lawmakers for considering the tax, but equally aggravated with Amazon. 'They're trying to tick off all their associates and get them to call down to Raleigh,' Barrett said. 'I think that is pretty tacky. That's not the way to use people who are referring business to your business.'"

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411 comments

For workers revolution against capitalist anarchy! (-1, Troll)

Anonymous Coward | more than 5 years ago | (#28486465)

Build a Leninist-Trotskyist vanguard party! Socialism or Barbarism!

That's the real meaning of "voting with your feet" (5, Insightful)

vivaoporto (1064484) | more than 5 years ago | (#28486495)

That's the real meaning of "voting with your feet". There is an unjust law, or even a just one that Amazon doesn't agree, and they don't want to be subjected to it, so they move out of the state.

Re:That's the real meaning of "voting with your fe (0, Offtopic)

db10 (740174) | more than 5 years ago | (#28486619)

amazon has feet? are they for sale?

Re:That's the real meaning of "voting with your fe (2, Funny)

infinite9 (319274) | more than 5 years ago | (#28486833)

amazon has feet?

Yes. They are unde-feet-ed.

Re:That's the real meaning of "voting with your fe (4, Funny)

CopaceticOpus (965603) | more than 5 years ago | (#28486891)

Well, of course [amazon.com] . They sell everything [amazon.com] .

Re:That's the real meaning of "voting with your fe (3, Funny)

fracai (796392) | more than 5 years ago | (#28487357)

amazon has feet? are they for sale?

They were, but they've been soled.

Re:That's the real meaning of "voting with your fe (2, Interesting)

Chabil Ha' (875116) | more than 5 years ago | (#28487049)

Too bad it has to be that way, but it is much easier to kill a bill than to kill the resultant law. I hope NC's (attempted) money grab was worth it.

Re:That's the real meaning of "voting with your fe (5, Insightful)

erroneus (253617) | more than 5 years ago | (#28487295)

Yes, it is unfortunate that N.C. sellers had to suffer for it, but I have to agree with Amazon's action on this. At every turn, government at all levels seek more and more money rather than taking a hard look at where they are spending it. Ultimately, I believe, they simply want more money to vote themselves higher pay and to return favors of their campaign donors. I wish there were a better way to run government. I vaguely recall one or more SciFi movies in the past where a city became a business or something to that end... the prospect was frightening, but I have to wonder if such a project were applied properly, if it wouldn't be run more efficiently. One problem with current styles of government is that there is little to no incentive to save money or to use it wisely. They have no profit motive and clearly no personal integrity or desire to serve motives. So I have to wonder, what motives would cause governments at local, state and even federal levels to deliver "good service" to the people at the lowest cost possible?

Actually, I think it's a great tactic (5, Insightful)

infinite9 (319274) | more than 5 years ago | (#28486511)

... even if it is a bit assholeish. It sends a loud and clear message to the NC government that the legislation will hurt local businesses.

Re:Actually, I think it's a great tactic (5, Interesting)

elloGov (1217998) | more than 5 years ago | (#28486605)

I agree. This is admirable response by Amazon. Even legal thievery has its limits. NC is laying claims beyond their jurisdiction in my opinion.

Re:Actually, I think it's a great tactic (5, Informative)

scorp1us (235526) | more than 5 years ago | (#28486861)

We're seeing more and more of this retaliation.

Green Day recently declined to make a censored version of their album to meet Wal*Mart's demands. Wal*Mart thought that they could strong-arm anyone into making an non-explicit version. But lost out, because the album is doing quitewellthankyouverymuch.

On a more historical note, the founders of this great nation realized that smuggling was a good thing. As taxes became oppressive, the more reason there was for smuggling. They saw it as a great balancing factor. They state had to choose to keep the taxes low, or let a larger amount go untaxed, in addition to a drop in sales, like they are seeing with the new tobacco taxes.

The current government is advantaged because of electronic record keeping, where some SQL statement can spot discrepancies for additional investigation.

But there is no reason why the governments should have license to grow when its supporting economy just dropped 20%. To argue otherwise is to argue that you can tax a nation into prosperity, or that you can lift yourself up by your boot straps.

I applaud Amazon for having gravitas. I also wish the best for those affiliates in NC. Hopefully they will speak up and fix the taxation, or NC will learn to go without.

Re:Actually, I think it's a great tactic (4, Insightful)

lewp (95638) | more than 5 years ago | (#28487385)

I agree. Amazon is losing sales on this too, so it's not like they're just screwing the little guy. They're putting their money where their mouth is.

They Had Warning (5, Informative)

eldavojohn (898314) | more than 5 years ago | (#28486515)

Local affiliates say they were "blind-sided" by the company's action.

I'm sorry, sir, I normally restrict myself to civil language but you are so full of shit.

I don't even live in North Carolina and recalled reading about 'warning' letters sent to you [accountingweb.com] . Maybe you should open up your e-mails from June 17-18:

We 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. You are receiving this e-mail because our records indicate that you are an Amazon Associate and resident of North Carolina.

Please note that this is not an immediate termination notice and you are still a valued participant in the Associates Program. All referral fees earned on qualified traffic will continue to be paid as planned.

But because the new law is drafted to go into effect once enacted -- which could happen in the next two weeks -- we will have to terminate the participation of all North Carolina residents in the Amazon Associates program on or before that same day. After the termination day, we will no longer pay any referral fees for customers referred to Amazon.com or Endless.com nor will we accept new applications for the Associates program from North Carolina residents.

The 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. Other states, including Maryland, Minnesota, and Tennessee, considered nearly identical schemes, but rejected these proposals largely because of the adverse impact on their states' residents.

The North Carolina General Assembly's website is www.ncleg.net and additional information may be obtained from the Performance Marketing Alliance at www.performancemarketingalliance.com. We thank you for being part of the Amazon Associates program, and we will apprise you of the General Assembly's action on this matter.

Sincerely,
Amazon.com

You were warned! Tell us, James Barrett, how many letters did you sent to your representatives demanding they strike down this unconstitutional tax?

Yes, it came early. But you were warned. Unwittingly operating for one day could set Amazon back thousands if not tens of thousands of dollars. They tried blocking it with litigation in New York and they lost. Don't get made at them for playing it safe, you have no one to blame but your elected officials.

Re:They Had Warning (3, Informative)

T Murphy (1054674) | more than 5 years ago | (#28486791)

North Carolina state legislature (the General Assembly) appears ready to enact an unconstitutional tax collection scheme

For those who don't want to RTFA:

The tax provision that Amazon objects to would apply sales tax to purchases made through such click through transactions from Web sites run by affiliates based in North Carolina.

blindsided? (4, Interesting)

Red Flayer (890720) | more than 5 years ago | (#28486523)

1. If any of these affiliates were blindsided, it is because they didn't read the notice they were given last week. Of course, a single week's notice is too short anyway...

2. Time for the referral businesses in NC to relocate. Or close up shop. We'd be happy to have them (and their income & property tax revenues) here in NJ.

Of course, now it's only a matter of time before most states have similar laws. Then it'll be time for these businesses to relocate to the Cayman Islands.

Re:blindsided? (4, Interesting)

vertinox (846076) | more than 5 years ago | (#28486653)

2. Time for the referral businesses in NC to relocate. Or close up shop. We'd be happy to have them (and their income & property tax revenues) here in NJ.

Or they could setup a proxy LLC in Delaware [wikipedia.org] through a registered agent [delaware.gov] .

Re:blindsided? (1)

Red Flayer (890720) | more than 5 years ago | (#28487063)

Which wouldn't help them, since they have a physical presence in NC and thus must pay NC sales tax.

There are many many thousands of corporations registered in DE for business purposes, but don't think for a second that those corporations are not required to file and pay sales taxes in the states where they have a physical presence.

And don't try to evade sales taxes that way either -- you'll either get nailed and have to pay fines and interest (or even get prosecuted for willful tax evasion), or at the very minimum you're a drain on state resources because you don't contribute your fair share (which I know is optimistic on my part, to think that people would pay taxes out of some moral reason, instead of just fear of reprisal).

Re:blindsided? (1)

Kohath (38547) | more than 5 years ago | (#28486727)

Just think how much nicer NJ would be if people were valued for their humanity rather than just as sources of "income & property tax revenues". If these people needed a hint to avoid New Jersey, your post certainly provided it. Of course, they could have looked around to find that New Jersey has the worst business climate of any state in the US [heartland.org] .

My state (Minnesota) isn't very good either, but it beats New Jersey. I hope to move to an even better state soon.

Re:blindsided? (5, Funny)

LotsOfPhil (982823) | more than 5 years ago | (#28486903)

The only thing that would make New Jersey nicer is less New Jerseyans.

Re:blindsided? (1)

timepilot (116247) | more than 5 years ago | (#28486977)

Did you read the heartland.org article? It doesn't say that "New Jersey has the worst business climate," it says that "New Jersey has the worst business TAX climate."

Big difference. This statement is based primarily on the breadth of the sales tax base.

NJ doesn't tax toilet paper, food, or clothing. This places more of a tax burden on people buying TVs and cars, and less on people buying things like cereal for their kids. If that means NJ has a bad business tax climate, so what?

Honestly, I'd rather pay 7% for my TV knowing that people who can't afford TVs didn't have to shell out more to feed their kids so that my TV could be cheaper.

Re:blindsided? (3, Insightful)

cayenne8 (626475) | more than 5 years ago | (#28487093)

"Honestly, I'd rather pay 7% for my TV knowing that people who can't afford TVs didn't have to shell out more to feed their kids so that my TV could be cheaper."

Trouble is...most of those people will still buy TV's first, and then complain they can't feel their kids.

Re:blindsided? (-1, Troll)

poopdeville (841677) | more than 5 years ago | (#28487219)

Fuck you for saying "those people".

Re:blindsided? (1)

Vohar (1344259) | more than 5 years ago | (#28487407)


Trouble is...most of those people will still buy TV's first, and then complain they can't feel their kids.

As a guy working in (and currently sitting in) child support nonpayment court, this is absolutely true. There are guys in here who are in their 30's and have never held jobs. Wouldn't know it by how they're dressed, though.

Re:blindsided? (0)

Anonymous Coward | more than 5 years ago | (#28487445)

At least Michael Jackson won't be feeling them for the parents anymore giving parents more chances too.

Re:blindsided? (1)

superwiz (655733) | more than 5 years ago | (#28487423)

Sales taxes is not what makes NJ a hostile business environment. NJ corporate income tax structure and (almost deliberately) low-tech regulatory agencies (in one of the most high-tech states in the nation) is what makes it hostile to the business environment.

Re:blindsided? (1)

Red Flayer (890720) | more than 5 years ago | (#28487333)

Just think how much nicer NJ would be if people were valued for their humanity rather than just as sources of "income & property tax revenues".

Just how could I value these people for their humanity, when I have no idea if they are selfish twats or if they are decent human beings? The only thing I can judge them on, from the information available to me, is their monetary value to the people who live in NJ. They could be rapists or worse, for all we know.

And as for NJ having a bad business climate... surely that's the reason so many businesses have moved to NJ, despite our tax climate being bad for decades?

We have a bad tax climate for business. On the other hand, we have great business climate in other areas, such as: education system, workforce quality, proximity to NY, proximity to ports, culture, etc.

But go ahead, harp on NJ. The more people that talk negatively about it, the better my chances of having beautiful rural NJ never overrun by midwestern suburban transplants.

Moving from NC to NJ for tax reasons? (1)

geoffrobinson (109879) | more than 5 years ago | (#28486875)

Now that would be a man bites dog story. As NJ residents, we should always have our eyes out for other tax jurisdictions.

Re:Moving from NC to NJ for tax reasons? (1)

EvanED (569694) | more than 5 years ago | (#28487439)

OT, but what war ended communism?

Re:blindsided? (1)

need4mospd (1146215) | more than 5 years ago | (#28487011)

How much notice did the NC legislators give Amazon? That would probably clue you in to why they only gave a one week notice. If Amazon didn't know about it beforehand, how could they possibly give a notice any sooner? Also, just because the government proposed a law, doesn't mean it's likely to pass. Maybe the lawyers determined they should send the letter out when they knew the law was more likely to pass.

I don't feel like RTFA(sue me) so sorry if that was already covered.

Re:blindsided? (1)

couchslug (175151) | more than 5 years ago | (#28487323)

[quote]
2. Time for the referral businesses in NC to relocate. Or close up shop. We'd be happy to have them (and their income & property tax revenues) here in NJ.
[/quote]

Given the brutal property and income tax situation in New Jersey, they'd be better off moving a few miles to South Carolina.

I'm from New Jersey, lived in both Carolinas, and retired in SC so I get to keep more of my income. :)

The only way to make sure (5, Informative)

guruevi (827432) | more than 5 years ago | (#28486537)

is by biting them where it hurts: their pockets. You can add all the sales tax on out-of-state purchases you want (whether that is federally allowed -- I'm not sure), if you don't sell anything, you don't have anything to tax so revenue will remain 0.

They probably saw what happened in NY and they don't want it to happen everywhere. Amazon decided to add tax to NY purchases and me and a lot of other people stopped purchasing from them because other stores (like NewEgg, TigerDirect and Geeks) were undercutting them by about 8%. Even though my organization is tax exempt I don't purchase at Amazon simply because they don't have the provision for me to state that I am tax exempt.

Re:The only way to make sure (1)

avandesande (143899) | more than 5 years ago | (#28487349)

It's not zero, it's a negative amount, because these businesses will then stop paying a bunch of taxes that they are already burdened with.

Finally somebody who stand up against more taxes (0)

Anonymous Coward | more than 5 years ago | (#28486613)

This country is going down the drain with the burden of all these taxes.

How will we end up competing with other nations when it is so hostile to have your business in this country?

How are we going to motivate people to make money, when all they see is more taxes, who work the extra day or the extra hour when you know the progressive tax systems will penalize you for doing it.

"Taxes only pays for governmental bureaucracy that collects the tax, and provides little or nothing to the poor." - Dr. Mohammad Yunus

It's not tacky (4, Insightful)

rpillala (583965) | more than 5 years ago | (#28486627)

That's not the way to use people who are referring business to your business.

That's exactly the way to use people who are referring business to your business. The only thing that motivates a business "relationship" is the exchange of value. If the proposed law was going to cause this change anyway, making it early as an example is the way to get people to "call down to Raleigh."

While your at it...... (1, Interesting)

Anonymous Coward | more than 5 years ago | (#28486649)

Get them to reverse the public smoking ban they just nazi'd through.......

As a small restaurant owner, I have the right to decide if the use of a COMPLETELY LEGAL substance such as tobacco hurts or helps me bring people through the door to keep my employees and bills paid.

I wish I could shove the horse you rode in on straight up your southern expressway with your opinionated legislation.

Re:While your at it...... (-1, Offtopic)

grahamsz (150076) | more than 5 years ago | (#28486709)

Would you want to liable for a regular patron that contracted lung cancer after breathing smoke in your establishment? You'd already have some liability if your smoking customer spilled a drink and the same non-smoking patron slipped on it.

Obviously the former case is nearly impossible to prove right now

Re:While your at it...... (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#28486771)

It's good you have friends with mod points, cause you sir have no point.

Re:While your at it...... (0, Flamebait)

grahamsz (150076) | more than 5 years ago | (#28486847)

And you appear to lack the cojones to post under your own account.

Simple reality is I can only think of 2 or 3 establishments that were proactive in keeping smoking areas that were separately ventilated and which their staff weren't ordinarily required to enter while smokers were present. Most places that kicked up a fuss about new laws were the same ones that played fast and loose with the health of their patrons and employees.

Re:While your at it...... (2, Insightful)

YouWantFriesWithThat (1123591) | more than 5 years ago | (#28487283)

if you don't want blacklung don't be a coal miner, eh?

Re:While your at it...... (1, Offtopic)

JesseMcDonald (536341) | more than 5 years ago | (#28486931)

Would you want to liable for a regular patron that contracted lung cancer after breathing smoke in your establishment?

I would certainly hope that it isn't possible to incur liability for exposure to conditions the customer is fully aware of before walking in the door. Subjecting customers to unexpected or hidden risk would be one thing, but when someone goes into a place of business knowing in advance that they'll be exposed to second-hand smoke the responsibility for any potential consequences is theirs alone. A warning sign for new customers might be in order--though it would be difficult to argue that any significant damage could be incurred in the time it takes to observe the conditions and leave.

You'd already have some liability if your smoking customer spilled a drink and the same non-smoking patron slipped on it.

Citation, please? Any reasonable theory of liability depends on the liable individual contributing in some way to the damage, by action or negligence. Neither is the case here, unless you're leaving something important out of your description.

Re:While your at it...... (0, Offtopic)

grahamsz (150076) | more than 5 years ago | (#28486997)

A better example than a patron would be an employee - the vast majority of bars i've frequented left their employees in situations where the had no choice but to breathe in second hand smoke. I know the free-market extremists will disagree, but i think your employer should be responsible for a safe working environment.

I certainly know of someone who got a nasty laceration in his foot from broken glass from a customer spill. The bar settled and covered his medical costs.

Re:While your at it...... (3, Insightful)

JesseMcDonald (536341) | more than 5 years ago | (#28487277)

It doesn't matter whether the person in question is a customer, employee, or visiting dignitary. The only criteria that matters is that they entered the property willingly, knowing the conditions. That is as true for employees as it is for customers.

That fact that the business in your anecdote settled doesn't mean they would have been found liable in court--or that they were actually liable, which isn't always the same thing. The customer was liable, if anyone, for breaking the glass and thus creating the situation. However, it doesn't look good for employees to sue customers even when doing so would be justified, so I'm not particularly surprised that the employer settled the matter itself as an act of goodwill.

Re:While your at it...... (5, Insightful)

BarryJacobsen (526926) | more than 5 years ago | (#28487307)

A better example than a patron would be an employee - the vast majority of bars i've frequented left their employees in situations where the had no choice but to breathe in second hand smoke. I know the free-market extremists will disagree, but i think your employer should be responsible for a safe working environment.

I certainly know of someone who got a nasty laceration in his foot from broken glass from a customer spill. The bar settled and covered his medical costs.

That's certainly a different situation than being exposed to second hand smoke, though. If you apply to work at a bar/restaurant where smoking is allowed (which you could easily tell when you were picking up your application), I think you should expect that you'll be around second hand smoke and if that is objectionable - choose not to work there! If you object to working outside in the heat, perhaps you shouldn't apply for a construction job in California - it's not the hiring construction companies job to provide a portable air conditioning unit for you. If you object to working with children - you should probably not try to become a second grade teacher. If you object to working around alcohol - you should not apply to a liquor store. If you object to working around smoke, you should choose not to work at a place WHERE PEOPLE FREQUENTLY SMOKE. You are not entitled to work at whatever job you want with whatever conditions you want, no one owes you the type of job you dream of.

Re:While your at it...... (1, Offtopic)

dlaudel (1304717) | more than 5 years ago | (#28486969)

Sheesh, how long are people in your restaurant? You're not going to catch cancer from an hour long dinner at a smoke-filled establishment. You'd have to be in there a very significant amount of time to damage your lungs. Besides, if you were a restaurant owner, you can say up front, "This is a smoking establishment." As long as you aren't taking customers in at gunpoint and forcing them to stay in the smoke, it's not your problem.

Re:While your at it...... (1)

grahamsz (150076) | more than 5 years ago | (#28487041)

What about your employees? They spend a fairly significant portion of your day in a smoke filled room.

I have a hell of a lot more sympathy for the places that structured their business around separately ventilated spaces that employees didn't have to enter, but most bars and restaurants weren't proactive.

Re:While your at it...... (1)

RobertLTux (260313) | more than 5 years ago | (#28487111)

also you can cut down the problem some if you put the smoking section near the air returns (i think that the kitchen is effectively negative pressure and the upper floors of a multistory setup should also be good)

note IANAHVACE please consult one as required

Re:While your at it...... (1, Insightful)

Anonymous Coward | more than 5 years ago | (#28486737)

What has happened to North Carolina lately?

"Cuts of" or Cuts off"? (1)

gemtech (645045) | more than 5 years ago | (#28486685)

Would somebody make up their mind? Off-topic slams welcome.

Re:"Cuts of" or Cuts off"? (1)

gemtech (645045) | more than 5 years ago | (#28486735)

and now the editor steps in and fixes it......

Are Online Retailers Going to Contribute or Not? (-1, Troll)

David Greene (463) | more than 5 years ago | (#28486693)

So Amazon is acting like a typical "me first" corporation and ignoring its responsibility to the community. What else is new?

The fact is, online retailers have been leeching off communities for far too long. They make use of the infrastructure these communities provide but use tax evasion to make sure they don't contribute to its upkeep. Moreover, local businesses fairly, rightfully and morally pay their taxes and get undercut by unfair competition.

This isn't an issue of some ridiculous "internet freedom" entitlement. This is about making sure that everyone shares the responsibility for keeping our society working. Bravo to North Carolina for calling these online retailers to be responsible.

Re:Are Online Retailers Going to Contribute or Not (1, Insightful)

Anonymous Coward | more than 5 years ago | (#28486731)

So NC is acting like a typical "me first" government and ignoring its responsibility to the community. What else is new?

The fact is, governments have been leeching off communities for far too long.

Fixed that for you.

Re:Are Online Retailers Going to Contribute or Not (0)

Anonymous Coward | more than 5 years ago | (#28486751)

How is this any different than mail order or phone order businesses?

Re:Are Online Retailers Going to Contribute or Not (1)

David Greene (463) | more than 5 years ago | (#28487123)

It's not. They should pay their taxes as well.

Bravo North Carolina. (3, Insightful)

maillemaker (924053) | more than 5 years ago | (#28486755)

>Bravo to North Carolina for calling these online retailers to be responsible.

Hope they enjoy no Amazon-related resellers operating in their state.

Taxes are how states compete for business. Raise taxes on a business that can operate anywhere else and avoid the tax, guess what? They are leaving town.

Re:Bravo North Carolina. (0)

Anonymous Coward | more than 5 years ago | (#28487107)

Taxes are how states compete for business. Raise taxes on a business that can operate anywhere else and avoid the tax, guess what? They are leaving town.

Taxes are also how states pay for such nice things as roads, schools, police and fire. As more and more companies pull stunts like this to avoid paying their fair share, the difference will likely be made up by raising taxes on individuals. That, or they can just start making you provide your credit card number before sending out the fire department to save your home.

Re:Bravo North Carolina. (1)

JoeRandomHacker (983775) | more than 5 years ago | (#28487271)

That, or they can just start making you provide your credit card number before sending out the fire department to save your home.

No problem. Just sign up for 1-Click purchasing at Amazon.com, and they will punch-through your purchase to your local fire department affiliate.

Re:Bravo North Carolina. (1)

larry bagina (561269) | more than 5 years ago | (#28487135)

Aside from taxes, they also help set the general business climate. Right to work, beaurocracy, regulations, etc. Of course, the same attitude that produces high taxes also produces an unfavorable economic climate for anyone who isn't rich and liberal, in the name of everyone else who suffers for it. While most states are seeing budget shortfalls in the recession/depression, the ones that are suffering the most previously drove out businesses and expanded government largess.

Re:Bravo North Carolina. (1)

David Greene (463) | more than 5 years ago | (#28487175)

Taxes are how states compete for business.

That's a very twisted view of taxation and its purpose. States/cities/counties/etc. don't complete based on tax rates. Studies have demonstrated that over and over. The competition is based on infrastructure and quality of life -- is there adequate transportation for employees and goods, is there a well-educated workforce, is there a thriving arts culture (yes, smart businesses look for this!).

And guess what? A state provides none of this without taxes.

Re:Are Online Retailers Going to Contribute or Not (2, Interesting)

Attila Dimedici (1036002) | more than 5 years ago | (#28486759)

It is not the online retailers that are leaching, it is the people who buy from them and don't pay the tax themselves. Do you have any idea what a nightmare it would be for a small online retailer if they had to figure out what sales tax to charge on every transaction in every locality in the country. I am surprised that Amazon didn't shut down all of their NY affiliates because NY has one of the most nightmarish sales tax setups for any retailer without a fixed location. "Yes, I know this is the Syracuse Convention Center, but it is not actually in the City of Syracuse, so the sales tax is 7.25% not 7.5%. You have been defrauding these people, even though you were going to pay all the tax you collected to the state of NY."

Re:Are Online Retailers Going to Contribute or Not (1)

frank_adrian314159 (469671) | more than 5 years ago | (#28487115)

Do you have any idea what a nightmare it would be for a small online retailer if they had to figure out what sales tax to charge on every transaction in every locality in the country.

Sounds like a simple change requiring a couple new database tables linking postal code, tax rates and exemption booleans to product ID, a couple of administrative web pages to modify the data and view a tally of taxed items being sold, and a few changes to the cart checkout to add/display the tax amount. In fact, much of this could be integrated as a third party online web-service package (i.e., tax rate maintenance, calculation and, perhaps (for a small surcharge), even tally of taxes owed on sold items and remission to various states).

Right now, BaM small businesses need to do this for in-state tax (and those on state boundaries need to handle customers who cross state lines to shop). There's no reason why this can't be made efficient for multiple tax zones. In fact, it's probably an opportunity for someone to set up a service bureau to do this.

Re:Are Online Retailers Going to Contribute or Not (1)

sunking2 (521698) | more than 5 years ago | (#28487215)

There is plenty of services and software available that handles this almost perfectly. Its 2009, do you think we can't handle a simple address to tax code translation? There are tons of databases that work off street address to tax, and some that even go address -> long/lat -> tax code.

It's not that big a deal and brick and morter businesses that ship have been doing it for ages. Why is it suddenly so difficult for online stores?

Re:Are Online Retailers Going to Contribute or Not (2, Interesting)

David Greene (463) | more than 5 years ago | (#28487221)

Do you have any idea what a nightmare it would be for a small online retailer if they had to figure out what sales tax to charge on every transaction in every locality in the country.

Well, we have the internet, databases and computers. Automating this would not be difficult at all. States/cities/etc. would submit their tax rates based on GIS data and the federal government could maintain a database searchable by merchants. If the local units don't accurately represent their sales tax rates, then the onus is on them to fix it.

The technology is not a problem here. We can solve that problem. The real problem is a culture of disinvestment in our communities.

Re:Are Online Retailers Going to Contribute or Not (3, Insightful)

Duradin (1261418) | more than 5 years ago | (#28486801)

The Balkanization of commerce isn't a good thing.

Amazon pays its taxes. Get Amazon to head quarter in your community and then you'll get its tax money.

The overhead of tracking tax codes down to the city level (and keeping up to date) would be overwhelming. The only winning move in this case really is not to play and that's what Amazon did.

Re:Are Online Retailers Going to Contribute or Not (1)

twistedcubic (577194) | more than 5 years ago | (#28486993)


The overhead of tracking tax codes down to the city level (and keeping up to date) would be overwhelming.

They could put them all in an online computer database?

Re:Are Online Retailers Going to Contribute or Not (1)

squallbsr (826163) | more than 5 years ago | (#28487229)

They have these databases available, at a cost. You can pay through the nose for a solution from Vertex Inc [vertexinc.com] , but of course that adds a whole big chunk of change to a company's operating costs (more servers and more annual fees for software) which gets passed down to the consumer in addition to the tax hike.

Re:Are Online Retailers Going to Contribute or Not (1)

BarryJacobsen (526926) | more than 5 years ago | (#28487375)

The overhead of tracking tax codes down to the city level (and keeping up to date) would be overwhelming. They could put them all in an online computer database?

So you're offering to make and update this database for free? No? You'd want to be paid to do it? Well how much would that cost? So roughly the amount of money that we make from doing business there or more? Nevermind, it's easier to just not do business there.

Re:Are Online Retailers Going to Contribute or Not (0, Troll)

BitZtream (692029) | more than 5 years ago | (#28487315)

No, you have it all wrong. As a North Carolina citizen I can educate you ...

We have the solution. We give large internet companies (Google) tax breaks to do business here and provide jobs. And in order to encourage other businesses to move into North Carolina, we tax them on all their sales made to North Carolina, regardless of where they are located.

As you can see this is a truely brillient plan. Every well managed business would want to move to North Carolina since you can get the tax break and not have to pay. Since no other state has allowed such a brillient idea, the companies operating in NC don't have to worry about taxes from other states, but all the operations in other states are liable to NC.

Okay okay, so this is one of those moments that makes me understand why surrounding states tend to refer to people here as 'ignorant pig farmers'. I would like to point out that pig farmers aren't that stupid and this sort of thing could only be accomplished by the supreme intelligence of politicians.

If you've been watching the news recently and noticed, we have some down right AWESOME politicians.

Bear with us, the trendy 'I HATE BUSH' crowd thought it out long and hard and proudly elected an even more inept and mentally deficient batch of politicians than that last time around. Unfortunately we have too many universities and people who vote based on some ideological theory rather than reality.

Okay, fine, don't bear with us. Just please don't hold it against me personally, I'm leaving as fast as I can!

Re:Are Online Retailers Going to Contribute or Not (4, Insightful)

Todd Knarr (15451) | more than 5 years ago | (#28486807)

OK then, riddle me this: what is the sales tax rate for any address in the US? Note that you can't stop at the city plus ZIP code level, in San Diego County there are ZIP codes that're partly in a city (where city sales tax applies) and partly outside the city (where city sales tax does not apply). Where can a company go to find out authoritatively what the sales tax rate is for a customer address? I don't know of any, and it's just not reasonable to require a company to pay sales tax without giving them a way to find out how much sales tax they're supposed to collect.

Re:Are Online Retailers Going to Contribute or Not (4, Interesting)

ae1294 (1547521) | more than 5 years ago | (#28487159)

OK then, riddle me this: what is the sales tax rate for any address in the US?

I've had to deal with sales tax in both Virginia and North Carolina. The truth of the mater is they don't want you to know what the current tax rate is because they make more money when they audit your small business and apply fines a couple years later.

In Virginia my business was fined for not anticipating our GROSS income correctly. We GROSSED more money one year and because of that we had to pay the tax difference plus a couple thousand in fines. I'm just happy we had a CPA because the tax people where screaming murder until I said they would need to talk with our CPA then they where much nicer...

Small business owner's really can't win by playing by the rules...

Re:Are Online Retailers Going to Contribute or Not (1)

frank_adrian314159 (469671) | more than 5 years ago | (#28487207)

So set up a service bureau to sell the data with online access if necessary. It's not that hard. There are companies that collect and sell medical, drug, legal, and tax law information already. I'm sure Intuit could come up with an add-on service for state and local tax rates based on address.

Re:Are Online Retailers Going to Contribute or Not (0)

Anonymous Coward | more than 5 years ago | (#28487381)

So get back to us when you have that database worked out. Until that happens, Todd Knarr is right. Having the idea of a way to solve a problem is not a solution.

Re:Are Online Retailers Going to Contribute or Not (1)

Maximum Prophet (716608) | more than 5 years ago | (#28487403)

This shuts down any business that's too small to hire the service bureau. They exist. I know a guy who did $50 worth of photography business in one year. He claimed it to the IRS, and when he was audited, the auditor said, "You don't make much money on photography, do you?" (no sh*t)

The solution is to exempt really small businesses, but they don't want people to try to run 1000 small businesses that make less than $1000 each.

Re:Are Online Retailers Going to Contribute or Not (1)

ciggieposeur (715798) | more than 5 years ago | (#28487217)

Where can a company go to find out authoritatively what the sales tax rate is for a customer address?

Wouldn't it be the computer's address rather than the customer's address?

If I go to the town next door and buy coffee, I pay 1% extra sales tax. Why can't people over there come to my house and use my computer (with their account) and get a lower sales tax rate?

Re:Are Online Retailers Going to Contribute or Not (1)

David Greene (463) | more than 5 years ago | (#28487245)

GIS works quite well for this kind of thing. It wouldn't be hard to setup a database for this purpose (see comment above).

Re:Are Online Retailers Going to Contribute or Not (3, Interesting)

LordKaT (619540) | more than 5 years ago | (#28486857)

Right, because it's not bad enough that the affiliates in North Carolina are already taxed on their earnings, but now they have to be taxed on the sales they refer to Amazon? You're talking taxing the same people three times on every sale (Local, State, and Affiliate). Let's not mention the bigger affiliates that are taxed 5 times (2x corporate earnings taxes, IRS personal, State personal, Affiliate)

Oh, and yes, the IRS and states tax the shit out of individuals in business. I don't know where people get the idea of mystical business tax relief, because if you're in business and playing by the law, you don't get a refund check, you send in a damn check every fiscal quarter.

Without any kind of business expenses, I would be taxed 89% on every dollar I made. eighty. nine. fucking. percent. And I'm just barely hovering around the poverty line doing this shit. Then you and your backwards populist shitheads yell at me for not spending money to better myself on college, or buying a car, or some other bullshit.

If your community is in such a dire condition that they absolutely need to tax a person a third time on the same dollar, then your community is completely fucked, needs to be dissolved, have its assets liquidated, and a new structure put in place.

In short: go fuck yourself.

Re:Are Online Retailers Going to Contribute or Not (-1, Flamebait)

Anonymous Coward | more than 5 years ago | (#28486867)

You are a certifiable idiot.

Please don't breed.

Re:Are Online Retailers Going to Contribute or Not (2, Funny)

JesseMcDonald (536341) | more than 5 years ago | (#28486967)

I think you need to make your sarcasm a bit more obvious. Someone might get the impression that you actually agreed with NC on this issue. That would, of course, be utterly ridiculous--but given the kinds of people one meets online it's hard to be certain, and not every detects sarcasm well.

Re:Are Online Retailers Going to Contribute or Not (1)

davester666 (731373) | more than 5 years ago | (#28487305)

Um, nowadays, US (and IMO, to a lesser extent, European and Asian) corporations, they are primarily looking at their numbers for the current quarter, and the next quarter. This will have a negative effect on the numbers, so they are trying to mitigate that effect.

It's also not solely Amazon's "fault". The citizen's of the state are (probably) required to declare these out-of-state purchases and pay taxes on them directly to the local and/or state governments. So the citizens could actually be guilt of criminal tax evasion, but this 'crime' is both probably widespread AND would be extremely unpopular for the state tax collector to actively prosecute. So, the citizen's are choosing slightly cheaper prices over paying for their local roads and schools.

It's just orders of magnitude easier for the state tax collector to get the money from a few large entities (like Amazon), who have pretty good accounting systems about who bought how much and where it was shipped to, than for them to try to get all their residents to individually track and then declare/pay taxes on these purchases at the end of each year.

Re:Are Online Retailers Going to Contribute or Not (3, Interesting)

Anonymous Coward | more than 5 years ago | (#28487389)

"The fact is, online retailers have been leeching off communities for far too long. They make use of the infrastructure these communities provide but use tax evasion to make sure they don't contribute to its upkeep."

What infrastructure is Washington based Amazon using in North Carolina?

That's the rub. They aren't.

That is the whole point behind "No Nexus = no tax"

Excuse? (0)

lsdi (1585395) | more than 5 years ago | (#28486725)

It looks like an Amazon's excuse to not deal with taxation and/or NC. I'm sure people in NC would agree to pay rather than stop doing business. There is something fishy in this case

Re:Excuse? (4, Informative)

JesseMcDonald (536341) | more than 5 years ago | (#28487069)

I'm sure people in NC would agree to pay rather than stop doing business. There is something fishy in this case.

The "something fishy" is that NC wants to tax Amazon--not the local associates--as if they had a presence in the state, based on their relationships with local associates (who are undoubtedly already paying NC taxes). Ergo, Amazon is severing its NC-based associate relationships to avoid any appearance of a taxable in-state presence.

I doubt that these taxes on out-of-state businesses are even remotely Constitutional, but I don't blame Amazon for playing it safe.

Re:Excuse? (1)

frank_adrian314159 (469671) | more than 5 years ago | (#28487301)

The "something fishy" is that NC wants to tax Amazon--not the local associates--as if they had a presence in the state...

The issue is somewhat tricky, because the local associates are using Amazon as a sales agent and using them to avoid sales taxes that other local businesses pay, giving them an unfair advantage. There is a basic fairness issue here (which I'm sure that local businesses without a web presence are pushing).

not tacky (5, Insightful)

v1 (525388) | more than 5 years ago | (#28486733)

They're trying to tick off all their associates and get them to call down to Raleigh,' Barrett said. 'I think that is pretty tacky.

Sounds like an excellent way to motivate your local associates to get their arses over to the capital and ride their representatives. There's not a great deal Amazon can do directly to fix this, they have to rely on their local affiliates to keep the local conditions amicable to their business. If the locals aren't moving, then it's time to light a fire under them.

Got their attention too didn't it? Sounds like it's working as intended to me...

Re:not tacky (1, Insightful)

BitZtream (692029) | more than 5 years ago | (#28487427)

There's not a great deal Amazon can do directly to fix this

Oh? They couldn't boycott NC themselves?

So its good for them that they go ahead and push it off to someone else, but they don't take a hit themselves?

'I'm not going to let you sell my stuff because your state did something bad sorry it hurts you, by the way, I don't really want to get hurt myself, so I'm going to keep selling all day long and continue making money while you don't.'

Are you serious? Don't give me this bullshit like Amazon is doing the right thing or has its hands tied, thats just bullshit.

They are using their affiliates like pawns, while taking very little risk themselves. It may not be illegal, but it sure as fuck doesn't fall into the 'right thing to do' category.

If they wanted to do the right thing, they'd stop selling in NC completely, but that would cost them money, far easier to use the little pawns in a bad economy to do your bidding.

Theres a word for this sort of treatment ...

good for amazon! (4, Insightful)

superwiz (655733) | more than 5 years ago | (#28486811)

Finally some business demonstrating some balls. If the tax is being considered, then the locality has an environment hostile to Amazon's business. It doesn't matter if it goes through. The fact that they see nothing wrong with their hostile attitude is enough of a reason for Amazon to declare that they will have nothing to do without them. No business with bullies -- not even with those who associate with bullies by living in their tax base. Good for them!

Stimulus (0, Flamebait)

Weeksauce (1410753) | more than 5 years ago | (#28486855)

I know, lets use some of that stimulus money to keep these companies afloat! You know, that stimulus money that was supposed to be paid for by the taxes that they want to impose...

A question for any legal geeks (3, Interesting)

goffster (1104287) | more than 5 years ago | (#28486909)

Can a company move to a US territory and still get all the perks ?
i.e. Puerto Rico ?

Tough Shit (1, Insightful)

Anonymous Coward | more than 5 years ago | (#28486927)

Kudos to Amazon for making a decision and implementing it. Interstate commerce is hardly mandatory, and it sounds like there are some North Carolina lawmakers that need to get their heads held in a toilet and have it flushed a few times until they get the message.

Amazon Shrugs (1)

slowgreenturtle (1529437) | more than 5 years ago | (#28487009)

Wow, people are upset because a company won't submit to being taxed? Sure is tacky of Amazon not to roll over for government money grabs.

Re:Amazon Shrugs (1)

TheAngryMob (49125) | more than 5 years ago | (#28487195)

Beware the looters.

NC has no right to the money, but are going to grab it anyways. Get the businesses to come to your state, not chase them away. Has no state learned California's lesson?

Re:Amazon Shrugs (1)

Talderas (1212466) | more than 5 years ago | (#28487421)

I think Michigan is a more apt example.

Unfair? (5, Insightful)

sjames (1099) | more than 5 years ago | (#28487015)

The legislator claims it's not fair that brick and mortar stores collect sales tax and Amazon doesn't. I say the brick and mortar collects taxes according to ONE tax structure in ONE place. What's fair about an out of state retailer having to understand potentially thousands of sales tax structures in many different combinations? Not to mention then needing to keep books on thousands of accounts to make sure the various state and local tax collectors get said taxes.

Unless and until the various legislatures are willing to get together on a simple clearing house to make it easy for retailers to figure out how much to collect and where to send it, they have little choice but to not do business in places that insist on it.

NC is already proving that such questions could be hard to answer. Whose taxes do we collect, the billing address? the ship to address? The address where the affiliate's server is located? NO! We must collect for the physical address of the person who owns the affiliate site. At least this week. No doubt the eventual answer (at least the one legislators will want) is ALL OF THE ABOVE AND MORE! In all different amounts with a whole table full of thresholds, percentages, and exceptions. OH, and different addresses to send the checks to with different required documentation and forms to fill out. Each and every one of them will claim that their tax is very simple and effortless to collect. None will recognize that the sheer volume and lack of standardization makes the matter impossible.

It's happening in a few states (1, Insightful)

Anonymous Coward | more than 5 years ago | (#28487065)

Got the email that it will happen shortly here in Hawai'i too.

What about NY? (2, Insightful)

TheNinjaroach (878876) | more than 5 years ago | (#28487083)

Where was Amazon when New York passed a similar law? I guess cutting off the entirety of NYC from Amazon.com would prove to be too costly, so they wait for a smaller (and therefore less profitable) state before they decide to play political hardball. It is Amazon's right to pick and choose their battles, I just can't help but think the US would be better off if they would have started this with the first state to try such a stunt rather than picking on the easiest.

Re:What about NY? (3, Informative)

HarrisonFisk (624200) | more than 5 years ago | (#28487401)

NY state does a tax on residents that purchase things from someone online with a NY affiliate. So if I live in NY (which I actually do) and buy an item from Amazon then I have to pay tax on it. This only affects the people of NY.

From what I understand the proposed NC law actually says that anything sold to anyone via an NC affiliate link would need to be taxed. So if someone lived in PA and bought something from Amazon, if they went through a NC affiliate link, it would be taxed by NC. This is not only taxing those items purchased by NC residents, but also people in other locations.

To make matters worse, if I lived in NY and then bought something via an NC affiliate, it would be taxed by both NY and NC.

This is why I suspect that Amazon cutoff the NC affiliates but not the NY ones.

I live in NC (1)

ph0rk (118461) | more than 5 years ago | (#28487147)

And I think anyone claiming to be "blind sided" is either full of it or a whiner, possibly both.

Also: the way to fix it isn't talking to a media outlet, it is talking to someone in Raleigh. (no, not a media outlet in Raleigh).

Go For It Amazon (3, Interesting)

Nom du Keyboard (633989) | more than 5 years ago | (#28487415)

Go for it Amazon! Put the finger in the dike now before we all get flooded out by greedy state governments whose legal justifications aren't even substantial enough to call flimsy. This is like Wal*Mart closing stores that go union because the problems of dealing with the issue overall far outweighs the losses from leaving a given market. I wish that the automobile makers had stood up to the State of California when they went completely nuts on the emissions regulations and instead of saddling us with thousands in additional new car costs, had simply said: "No new cars for you." Who do you think would have blinked first? The automakers? The state? Or the voters?

Yes I'm sorry that people are getting hurt along the way with this, but go out there and get your state back in order once more and this won't be happening.

Disclaimer 1: I sell on Amazon and I'm still all for this.
Disclaimer 2: I lived in California and breathed that air every day.

Its Clear Cut (0)

Anonymous Coward | more than 5 years ago | (#28487433)

Any state that taxes interstate commers like the internet will find that its interstate customers have simply gone to another state where the prices are cheaper. There is no sales tax in Delaware, It may turn out that all Internet sales will on the end come out of states like Delaware. Or perhaps when Obama lifts the trade restrictions, we will buy stuff from Cuba.

No, it's this way... (1)

Nom du Keyboard (633989) | more than 5 years ago | (#28487449)

the early shutoff seems to be a move in hopes of swaying opinion on the proposed legislation.

No, that's not correct. The early shutoff is to show that Amazon is truly serious about this and not just blowing smoke. There is now no doubt that Amazon isn't bluffing. NC will get no tax money from them.

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