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Rhode Island Affiliates Banned From Amazon.com Sales

timothy posted more than 5 years ago | from the oh-just-wait-for-the-feds-to-tax-it-instead dept.

Government 532

Rand Huck writes "Amazon.com has now added Rhode Island to its blacklist of affiliates in response to its proposed budget changes to enforce a tax on Internet sales, which includes commissions on their affiliate program by content providers based in Rhode Island. The first state to be blacklisted was North Carolina, for the same reason. If you go to a Rhode Island-based or North Carolina-based website that advertises Amazon.com goods as an affiliate, that website will no longer have the goods available because otherwise Amazon.com would be forced to pay sales tax to the State of Rhode Island and Providence Plantations or the State of North Carolina. The state's rationale is, if someone clicks to buy a good from Amazon.com via a site based in Rhode Island, it's equivalent to buying a good from a brick and mortar chain store located in Rhode Island."

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Frostttty Pissssed (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#28529245)

TOOPIC!!!

I fear that pretty soon... (2, Funny)

Anonymous Coward | more than 5 years ago | (#28529249)

...the only Amazon.com affiliates left will be in The Amazon.

Re:I fear that pretty soon... (3, Insightful)

cayenne8 (626475) | more than 5 years ago | (#28529941)

"...the only Amazon.com affiliates left will be in The Amazon."

That's really no big deal for me. I pretty much ONLY buy stuff that Amazon sells itself, so I can get the 'free shipping' with orders over $25..and of course, no sales tax.

I generally trust Amazon more than I do the small fry sites they 'affiliate' with.

Re:I fear that pretty soon... (4, Interesting)

0100010001010011 (652467) | more than 5 years ago | (#28530063)

Hawaii is close...

It's not passed yet (but this is the best time to catch it).

If you're in Hawaii get on the phone lines to your state senator and harass them about this.

http://www.starbulletin.com/business/20090627_Amazon_poised_to_cut_affiliate_program_in_Hawaii.html [starbulletin.com]

Hopefully it will cut down on affiliate-link spam (1, Troll)

tomhudson (43916) | more than 5 years ago | (#28529279)

Let all the states do this. There's too much affiliate-link spam going on already. Kill 2 birds with one stone - lower spam AND help fix the budget deficits.

The only ones complaining are the affiliates and Amazon - but they're the source of the problem to begin with. Let them pay their fair share of taxes, so that others don't have to pay more than their share to make up for it.

Re:Hopefully it will cut down on affiliate-link sp (5, Insightful)

guruevi (827432) | more than 5 years ago | (#28529385)

Why would I or Amazon have to pay taxes twice or more for something? First Amazon would need to pay taxes at whatever locale they're at, then I would need to pay taxes on the same product in my home state, then also every state it goes through as it is getting shipped from Florida to Rhode Island?

There is a reason intra-state purchases are not taxed. Read the constitution or so, you know the part where it says: The Congress shall have power . . . To regulate commerce with foreign nations, and among the several states, and with the Indian tribes

Re:Hopefully it will cut down on affiliate-link sp (5, Funny)

noidentity (188756) | more than 5 years ago | (#28529481)

Why would I or Amazon have to pay taxes twice or more for something?

Do you know how much superhighways take to maintain? The Internet is the information superhighway, so the taxes go to pay for travel on it. When you drive to Amazon, you're putting wear on the superhighways of the state Amazon is based in, and then Amazon has to drive your order to the affiliate, which puts wear on the superhighways to the affiliate's state. That's a lot of virtual wear!

Re:Hopefully it will cut down on affiliate-link sp (0)

Anonymous Coward | more than 5 years ago | (#28529685)

And also putting wear and tear on the physical highways, which are used to ship the goods.

Re:Hopefully it will cut down on affiliate-link sp (1)

kpainter (901021) | more than 5 years ago | (#28529823)

And also putting wear and tear on the physical highways, which are used to ship the goods.

That is what the Federal tax on fuel is supposed to pay for.

Re:Hopefully it will cut down on affiliate-link sp (3, Insightful)

tmosley (996283) | more than 5 years ago | (#28529925)

Sure, but you can always pay more for roads.

Not that they get any better when you do that. You can just pay more for them. It helps you get re-elected. What, you're not in Congress? Oh, well disregard everything I just said...

LOOK, SEX SCANDALS!

Re:Hopefully it will cut down on affiliate-link sp (1)

COMON$ (806135) | more than 5 years ago | (#28529847)

Good lord, at first I thought you were being serious, the funny part was, I was not suprised that someone would say something like that.

Re:Hopefully it will cut down on affiliate-link sp (1)

CecilPL (1258010) | more than 5 years ago | (#28529947)

I think you have an incorrect conception of the internet. I know a US Senator who could explain things to you.

Re:Hopefully it will cut down on affiliate-link sp (0)

lordsid (629982) | more than 5 years ago | (#28530035)

Absolutely none of the sales tax paid will go towards maintenance of the internet. Try again.

Re:Hopefully it will cut down on affiliate-link sp (0)

Anonymous Coward | more than 5 years ago | (#28530045)

Pretty soon we'll have GPS required for all packets to monitor the distance they travel so they can be taxed on it. The copper line manufacturers have been pushing for this while the fiber line manufacturers have been calling for government tax breaks to packets that use their lines.

Mij

Re:Hopefully it will cut down on affiliate-link sp (1)

dballanc (100332) | more than 5 years ago | (#28530117)

I'm ok with it as long as I can pay the taxes in virtual money.

Re:Hopefully it will cut down on affiliate-link sp (4, Interesting)

tomhudson (43916) | more than 5 years ago | (#28529577)

The local state has the right to tax their residents out-of-state purchases. When you buy something in another state, you're supposed to pay your local sales taxes, and then file for a reimbursement from the state you paid the original tax to - but it's not enforced. Now the individual states ARE saying - hey, here's a way we CAN enforce it.

Re:Hopefully it will cut down on affiliate-link sp (5, Insightful)

salesgeek (263995) | more than 5 years ago | (#28529927)

No, this is no more than another reach where states are trying to end run the commerce clause which has prevented them from successfully taxing out of state mail order purchases. This one is especially stupid because they are saying "because Amazon does business with contractors in our state, they have to act as a tax collection agent for us." This is a change in two ways:

* The state is extending the definition of "nexus" to include the use of contractors. Historically, a nexus includes employees and/or property.
* The state is basically telling mail order merchants to not spend a dime in the state or you have to become a tax collection agent for the state.

Basically, N. Carolina and Rhode Island are shooting themselves in the head and preventing mail order operations from using any in-state contractors to do things like print catalogs, mail catalogs, provide call center services, freight forwarding, delivery services and so on. In other words, no jobs for your state from any mail order company.

This is why there is a commerce clause in the constitution - to prevent one state from taking actions that unfairly burden a business or citizen in another state. Why should I care what sales tax is in California? My business is in Indiana. Eventually this will go to the supreme court and get tossed just like every other attempt by one state to make businesses in another state collect taxes for them. This has been building up for a while and we're due for another 8-1 decision in favor of the Federal Government having EXCLUSIVE jurisdiction over interstate commerce.

Re:Hopefully it will cut down on affiliate-link sp (0, Insightful)

Anonymous Coward | more than 5 years ago | (#28529409)

Taxing more things is not a fix for a budget deficit. You don't give a coke addict more coke because they're going through withdrawals. All 50 states need to learn to balance their budgets by *gasp* spending less money.

Re:Hopefully it will cut down on affiliate-link sp (1, Troll)

tomhudson (43916) | more than 5 years ago | (#28529699)

Taxing more things is not a fix for a budget deficit. You don't give a coke addict more coke because they're going through withdrawals. All 50 states need to learn to balance their budgets by *gasp* spending less money.

State revenues have fallen through the floor. California how has the worst credit record around, and on July 2nd will start issuing IOUs instead of cutting cheques, because they're out of money.

They have to do this because lenders won't take California IOUs (bonds) because California can't raise taxes enough, thanks to Proposition 13.

The federal government also has to raise taxes ... half the budget is IOUs, and lenders are starting to make noises about wanting their loans counted in yuan or euros, and not greenbacks. The accumulated deficit will be between $20 Trillion and $25 Trillion by 2016 - everyone agrees it's not sustainable, and that taxes will have to rise.

Re:Hopefully it will cut down on affiliate-link sp (2, Informative)

sopssa (1498795) | more than 5 years ago | (#28529429)

I doubt its amazon links you see spammed, they're pretty strict about bad practices. If you see such for amazon links, you can report it and they will look into it (and disable the affiliates account without payment if he has violated terms of services)

The ones you see spammed are usually something shitty like "get 1000's of your friends click this link and earn $0.001 per click!"

Re:Hopefully it will cut down on affiliate-link sp (1)

steelmaverick (936668) | more than 5 years ago | (#28529561)

One of the reasons we are able to get things so cheaply on Amazon is BECAUSE they have lower operating costs. If they have to pay taxes, and if we have to pay sales tax on such things, it increases the costs for everyone.

And how is buying from an Amazon affiliate the same as buying from a brick and mortar store? Two completely different concepts!

We should try to keep thinks cheap.

Re:Hopefully it will cut down on affiliate-link sp (1)

salesgeek (263995) | more than 5 years ago | (#28529971)

If they have to pay taxes, and if we have to pay sales tax on such things, it increases the costs for everyone.
Amazon does pay taxes in the places they have physical facilities. They do not want the expense of having to collect and pay sales tax in every jurisdiction in America. There's more to this than just state tax, there's county, city, township and even school district level sales taxation in different states in the US.

Re:Hopefully it will cut down on affiliate-link sp (1, Redundant)

tomhudson (43916) | more than 5 years ago | (#28530025)

One of the reasons we are able to get things so cheaply on Amazon is BECAUSE they have lower operating costs. If they have to pay taxes, and if we have to pay sales tax on such things, it increases the costs for everyone.

Sales taxes are consumption-based taxes. They're a tax on the consumer, based on residence. Amazon is enabling consumers to avoid paying their consumption tax. This "tax holiday" was supposed to be temporary. Congress has sat on their behind too long, so individual states are taking matters into their own hands and saying "We're going to enforce state law."

If you buy something out of state, you're supposed to pay the sales tax to your local state and then apply for a reimbursement from the state you paid the original tax in.

And how is buying from an Amazon affiliate the same as buying from a brick and mortar store? Two completely different concepts!

We should try to keep thinks cheap.

So what next - are you going to argue that people earning money off the Internet shouldn't pay income tax because it's two completely different concepts, and we should try to keep things cheap? Don't complain when your job gets off-shored.

Re:Hopefully it will cut down on affiliate-link sp (2, Insightful)

Just Some Guy (3352) | more than 5 years ago | (#28529657)

Let them pay their fair share of taxes,

They already do, considering that they're consuming approximately 0% of the state's resources.

Re:Hopefully it will cut down on affiliate-link sp (1)

tjstork (137384) | more than 5 years ago | (#28529801)

They already do, considering that they're consuming approximately 0% of the state's resources.

So I guess Amazon just drops everything off at the state's border?

Re:Hopefully it will cut down on affiliate-link sp (1)

FishWithAHammer (957772) | more than 5 years ago | (#28529887)

They pay taxes on fuel when in the state.

Re:Hopefully it will cut down on affiliate-link sp (5, Insightful)

Weedhopper (168515) | more than 5 years ago | (#28529909)

You really want to go down that line of reasoning?

The customer pays for his/her bandwidth.

FedEx and UPS pay their taxes for road use(fuel).

Et al, etc.

Re:Hopefully it will cut down on affiliate-link sp (1, Redundant)

tomhudson (43916) | more than 5 years ago | (#28529863)

Let them pay their fair share of taxes,

They already do, considering that they're consuming approximately 0% of the state's resources.

Sales taxes are taxes on CONSUMPTION. The CONSUMER isn't paying their fair share, and Amazon is the enabler. Consumption taxes help pay for your local schools, etc. Your local retailer does their share, and so do their customers. Since Amazon's customers aren't paying their fair share of consumption taxes, your local retailer is paying MORE than their fair share. Your education budget is also taking a hit, as are other services. The "tax holiday" was supposed to be temporary - Amazon wants it to be permanent. Your local retailer would also like a tax holiday, you know ...

Also, they DO consume a portion of your state's resources every time they ship something to or through your state. Extra pollution, wear and tear on the highways, and disposal costs for the packaging and ultimately the product itself when it breaks/wears out/becomes obsolete.

Level the playing field.

Re:Hopefully it will cut down on affiliate-link sp (1)

cayenne8 (626475) | more than 5 years ago | (#28530097)

"Also, they DO consume a portion of your state's resources every time they ship something to or through your state. Extra pollution, wear and tear on the highways, and disposal costs for the packaging and ultimately the product itself when it breaks/wears out/becomes obsolete."

Err..that isn't Amazon's fault. I would have to think that the companies that actually do the shipping do pay fuel and other taxes to the state in question when they travel across it and deliver said packages. Isn't that what fuel taxes are for...paying for road maintenance?

Re:Hopefully it will cut down on affiliate-link sp (1)

Albanach (527650) | more than 5 years ago | (#28529667)

Let all the states do this. There's too much affiliate-link spam going on already. Kill 2 birds with one stone - lower spam AND help fix the budget deficits.

If every state does it, Amazon will start charging the sales tax as part of the sale, and the referral program will remain.

They're only blocking these states to try and prevent the practice spreading. If everywhere charges sales tax, Amazon have nothing to gain and lots to lose by blocking referrals.

Re:Hopefully it will cut down on affiliate-link sp (0, Troll)

Animats (122034) | more than 5 years ago | (#28529673)

Agreed. The whole "affiliate" business is mostly slimeballs now, anyway. After all, you can still buy the product. It's just that the spammer with the "affiliate" site doesn't get paid.

Inconsistent behavior (3, Informative)

edwardd (127355) | more than 5 years ago | (#28529317)

These are not the only states to impose this type of tax. NY requires collection of sales tax, but Amazon isn't shutting out those affiliates. If they want to make a stand, they should at least be consistent about it.

Re:Inconsistent behavior (2, Insightful)

bytethese (1372715) | more than 5 years ago | (#28529513)

Probably because NY is a bigger state and threatening moves such as this will have a financial impact on those smaller states thereby giving Amazon a perceived upper hand on what they want?

Re:Inconsistent behavior (1)

Andy Dodd (701) | more than 5 years ago | (#28529641)

Yeah, this was my first reaction as an NYS resident.

If given a choice between collecting tax and booting all affiliates within a given state, why has Amazon chosen "boot affiliates" in NC and RI, but "collect tax" in NY?

For some purchases it's actually cheaper for me to ship to my parents' in NJ and then drive down there.

Re:Inconsistent behavior (2, Interesting)

alen (225700) | more than 5 years ago | (#28530087)

NY's AG started this whole thing and I think it's still being litigated. If Amazon stops doing business with NY affiliates then it may be seen as evidence of admission of guilt or whatever and NY's AG wins. If they continue to litigate and win they can then go back and start up their other affiliates

Re:Inconsistent behavior (5, Informative)

Cidolfas (1358603) | more than 5 years ago | (#28529931)

I thought they were being consistent. The NY law, which doesn't get your affiliates kicked out, taxes purchases made by residents of NY. The new laws that are getting affiliates banned tax purchases made from affiliates registered in those states.

So if you lived in NY and you wanted to buy something from an online affiliate located in RI, you would have to pay tax in both NY and RI.

And that's the problem with it. The Commerce Clause was put in the constitution to prevent things like this double-taxing for interstate commerce. If it's not as popular in some states to tax purchases made by residents, then they're going to try to get tax money from outside the state. It shouldn't hold up to constitutional standards on the issue, but that doesn't mean it will be overturned if challenged.

Every state needs to step up. (-1, Troll)

MarkvW (1037596) | more than 5 years ago | (#28529341)

Amazon needs to get taxed like everybody else. They've had enough of a free ride to get started (and pick up huge market share). They shouldn't have a competitive advantage over other sellers simply because they're taxed less.

Re:Every state needs to step up. (2, Insightful)

Anonymous Coward | more than 5 years ago | (#28529393)

I can't speak for anyone else, but providing yet another source of revenue for government is the last thing I want. The US government already spends more than any other government in the world, and (surprise) the result isn't even close to ideal.

No, what the US government needs is less spending -- or even a change in where the money goes -- certainly not more revenue.

Re:Every state needs to step up. (5, Insightful)

blueskies (525815) | more than 5 years ago | (#28529421)

Amazon is taxed. They aren't getting a free ride. Everyone is already required to pay a sales tax on the items they buy out of state anyway. In your state tax filing it is usually listed under Use tax.

So amazon isn't going to pay any more in tax, the people that are evading taxes would be paying for the tax.

Re:Every state needs to step up. (3, Insightful)

ScoLgo (458010) | more than 5 years ago | (#28529921)

This is absolutely correct! In fact, you are supposed to report and pay use tax on everything you purchase - even used stuff from garage sales, (not that anyone does).

Re:Every state needs to step up. (1)

CannonballHead (842625) | more than 5 years ago | (#28530023)

even used stuff from garage sales

I'm not sure about that. I thought there was something about the equivalent of "trade" vs. sales? Sort of like craigslist? I didn't think those sorts of "sales" counted as a sale, and thus didn't have to be reported for tax by the use tax.

Re:Every state needs to step up. (4, Insightful)

salesgeek (263995) | more than 5 years ago | (#28530027)

No. Amazon is simply not collecting sales tax for states they are not located in. Why should Amazon (an out of state company) have to pay to do the job of the RI Department of Revenue? Since when did they delete the commerce clause from the constitution?

Re:Every state needs to step up. (0)

Anonymous Coward | more than 5 years ago | (#28529437)

Sorry, no they don't. Check the U.S. Constitution, Article 1, Section 9, Clause 5.

Re:Every state needs to step up. (2, Insightful)

doomicon (5310) | more than 5 years ago | (#28529461)

How are they not taxed like everybody else? As with catalog ordering, they aren't responsible for state sales tax.

They pay corporate taxes, no free ride there.

Am I missing something?

Re:Every state needs to step up. (0)

Anonymous Coward | more than 5 years ago | (#28529877)

Yes, you are missing something. Businesses and corporations DON'T pay taxes of any kind - ever. YOU pay the taxes - they only collect taxes.

Raise a tax on a business and watch the price of the goods they sell go up.

Why can't any of you understand this? Oh, it's wealth envy and hatred of "evil" corporations.

Let's get this country moving again doing it the right way.

Re:Every state needs to step up. (2, Insightful)

tibman (623933) | more than 5 years ago | (#28529517)

They DO get taxed, their company HQ has a physical location and they MUST pay business taxes. Boeing and Nvidia pay LESS taxes than Amazon.com does.

Re:Every state needs to step up. (1)

Mitsoid (837831) | more than 5 years ago | (#28530107)

Don't mean to jump on the 'citation needed' bandwagon -- in fact this is my first time requesting one...

I'm just curious why you came to that conclusion and, if true, I want to learn & understand why.

Re:Every state needs to step up. (2, Insightful)

RunsWithMatches (1352655) | more than 5 years ago | (#28529549)

A much better solution then, would be to end the sales tax in the various states to promote more competition with the internet retailers. I realize that taxes are a necessary evil, but let us not spread that evil any further that it has already gone. Every time the government sucks a penny out of the economy we are all the worse for it.

Re:Every state needs to step up. (1)

cortesoft (1150075) | more than 5 years ago | (#28529917)

So how do you propose we pay for roads/police/fireman/military etc..... you are saying we are ALWAYS worse if the government takes some money to pay for these things? I think we would be much much worse if we weren't taxed and these things weren't paid for.

Re:Every state needs to step up. (1)

teg (97890) | more than 5 years ago | (#28530033)

I realize that taxes are a necessary evil, but let us not spread that evil any further that it has already gone. Every time the government sucks a penny out of the economy we are all the worse for it

Are you? Is everyone worse off if the government sucks out pennies for e.g. basic education? Police? Roads? I agree on too much taxes being bad, but a certain level of public services is necessarry, and to everyone's gain.

Also, how about "enough to cover the costs in the long run" rather than a large, permanent deficit? The size of the costs is one issue, but the US has been undertaxed for many years when one considers how much money the US wants to spend.

Re:Every state needs to step up. (0)

Anonymous Coward | more than 5 years ago | (#28529605)

Amazon needs to get taxed like everybody else. They've had enough of a free ride to get started (and pick up huge market share). They shouldn't have a competitive advantage over other sellers simply because they're taxed less.

No,when YOU buy something from out of state, YOU are responsible for declaring YOUR purchase to YOUR state's revenue service, so YOU can pay the applicable sales tax YOU owe.

Typically, this is not done for small purchases because collection costs more than the tax.

Re:Every state needs to step up. (2, Insightful)

Darkness404 (1287218) | more than 5 years ago | (#28529701)

No governments only diverse taxes when they have helped for example you can charge sales tax on some things because you (presumably) drove on government roads to get there. On the other hand, when I order something online especially virtual goods like a song, e-book or movie what did the government do to deserve the tax? Nothing. Therefore they should not be taxed.

States don't get it. (1)

basementman (1475159) | more than 5 years ago | (#28529347)

These states don't realize that anyone doing major affiliate sales will either get around their taxes, or the bans that affiliate programs place on a state. There is always an overseas country willing to take a bunch of rich technologically educated people.

Re:States don't get it. (1)

sopssa (1498795) | more than 5 years ago | (#28529507)

Yep, and you dont even need to do that. afaik (I'm not from usa) you can just set up company in another state or country and work thru it with amazon.

Re:States don't get it. (1)

Icegryphon (715550) | more than 5 years ago | (#28529535)

Yeah, exactly time to move to a different State or Overseas.
Lord knows that is what I would do.
Now any people that Company/Affiliate hired are out of work, and the State wont get income tax from them.
Of course the I see alot of people with shortsighted "Amazon should pay there fair share" comments.
If they do stay they will just Pass the Extra cost on to the consumer, i.e YOU

Re:States don't get it. (1)

NineNine (235196) | more than 5 years ago | (#28529567)

This has nothing to do with the affiliates. The affiliates are paying income taxes. The states don't care about the affiliates. The states are trying to get Amazon to collect sales tax. Amazon is trying their best to avoid having to collect sales tax (and compete on a level playing field).

Catalogs (4, Insightful)

Hadlock (143607) | more than 5 years ago | (#28529377)

This is difficult, because an internet retailer is a lot like a catalog retailer, who might have 80% of their business out of state and isn't set up to take 50 states' differing tax rates and does not have the accounting muscle to pay 50 different state taxes each quarter. I think that's the main problem. And then you have the issue of ship to in one state (NC for example) and bill to (non-taxable like Oregon) etc etc. It creates a lot of headaches. Catalogs typically only pay/charge sales taxes for the state their accounting division is in. Multiply this by millions and millions of customers and you can see why Amazon would oppose this merely on the accounting issue. Most accounting software simply isn't set up for taxation in all 50 states, especially automatically.

Re:Catalogs (3, Insightful)

tomhudson (43916) | more than 5 years ago | (#28529491)

and does not have the accounting muscle to pay 50 different state taxes each quarter. I think that's the main problem

Doesn't have the accounting muscle? Why can't they use their cloud computing cluster?

The "acounting muscle" argument is pure BS - they have enough accounting and computing horsepower to run the rest of their business ... and they do a lot of calculations for every shaopping cart on every page refresh. Since they CAN cut off specific states, and they also calculate shipping by state, they can certainly do sales tax by state. They're just doing this to get their affiliates to lobby for them.

Re:Catalogs (4, Informative)

ptbarnett (159784) | more than 5 years ago | (#28530093)

Since they CAN cut off specific states, and they also calculate shipping by state, they can certainly do sales tax by state.

It's not that simple.

You can't just assess sales tax according to the destination state. In many states, there are local taxes as well, and it varies based on the locality. A merchant calculates sales tax based on the MERCHANT's location, and the various taxing authorities make sure he/she knows what should be collected.

The shipping companies provide rate tables based on ZIP code, and it's a simple lookup. But, you can't even use ZIP codes to determine tax rates, because ZIP code boundaries don't necessary follow political boundaries.

Re:Catalogs (1)

tonyreadsnews (1134939) | more than 5 years ago | (#28530105)

The accounting muscle comes in when filling out and submitting the tax payment on a quarterly basis. Even if a system were designed to calculate all the taxes owed, each state, you would have to deal with 50 different state filing systems. Then, what if the cities and counties want their share.

More to the point, this is regarding affiliates. Why should someone who refers someone to another location be taxed based on the location of the referrer. If I go to my local Safeway (supermarket), and see a posting on their community board for a motorcycle just across the state line, should the seller have to pay taxes to both states?

Re:Catalogs (4, Insightful)

sadler121 (735320) | more than 5 years ago | (#28529495)

This is where the Federal Government actually has the authority per the Constitution to step in and regulate interstate commerce. Congress needs to dictate ONE tax rate for all Internet purchases.

That is a VERY good idea! (2, Interesting)

Xaedalus (1192463) | more than 5 years ago | (#28529579)

I think that would work out very well: Congress dictates ONE tax for the internet in terms of sales tax. It's ludicrous to force anyone (even if they do have the resources) to have to divert resources to figure out fifty different sales taxes. Also, there is the risk of being double-taxed at stake (Company A pays sales tax wherever its accounting division is located, and passes it on to customer, and then customer has to pay sales tax again of his/her home state).

Re:That is a VERY good idea! (4, Informative)

Hadlock (143607) | more than 5 years ago | (#28529735)

The State of South Dakota charges a different rate per city. PER CITY. Each city's rate ranges from 2-6% if I recall correctly. Also some states (NJ, Indiana in 2007) change their rate on occasion. And then dealing with non-profit (non-taxable) institutions? That means waiting for an official tax exemption certificate, of which every state has different rules. Schools and Non Profits buy a lot of junk. A Lot. You have no idea how much man power it takes to explain why, to Betty at Podunk Baptist Church, Rural, IL - she needs to find, fill out and fax/mail a tax exemption certificate before you can process her order. And then deal with her angry pastor three months later when their order never arrives because she didn't/forgot to/sent the wrong form. This is a huge, huge bitch to deal with for companies beyond Amazon.

Re:That is a VERY good idea! (0)

kamapuaa (555446) | more than 5 years ago | (#28529765)

Figuring out the sales tax would be trivial. A small child could program that, and Amazon already calculates shipping costs based on zip codes and multiple methods of delivery. Anyway, even if collecting taxes wasn't trivial, it's still the responsibility of the business.

There's legitimate reasons to not have Internet sales tax, but the intense difficulty for Amazon to create a look-up table just isn't one of them.

Absolutely not (0)

tjstork (137384) | more than 5 years ago | (#28529851)

This is where the Federal Government actually has the authority per the Constitution to step in and regulate interstate commerce. Congress needs to dictate ONE tax rate for all Internet purchases.

You aren't going to trample the sovereignty of my state because your business is too lazy to implement a lookup table to comply with my laws. That's bullshit.

Re:Catalogs (0)

Anonymous Coward | more than 5 years ago | (#28529509)

The problem businesses like amazon face are many. The servers are in states A/B/C/etc, the warehouses are in states D/E/F/etc, the billing is sent to state G/H/I/etc. The item may be shipped to J/K/L/Etc. Everyone of those states wants 'tax money' from that transaction. Not to mention some counties/cities have their own tax structures. Add in affiliates and individual business owners who sell through amazon and you have a legal quagmire.

Tax A, B, C or Z? (1)

pentalive (449155) | more than 5 years ago | (#28530069)

So, the feds set an "internet sales tax" rate, which is collected once at payment by the end buyer. It all goes into a big fund that is divided amongst all of the states (perhaps according to sales or population)

Re:Catalogs (1)

NineNine (235196) | more than 5 years ago | (#28529531)

Most accounting software simply isn't set up for taxation in all 50 states, especially automatically.

No, but any accounting software could be altered in under an hour to do so. It's a tiny, tiny programming problem. Hell, most small business owners already pay a subcription service to keep their accounting software up to date with their own state's tax rates for employment.

Re:Catalogs (0)

Anonymous Coward | more than 5 years ago | (#28529891)

Actually that's not true.

Take into account different county based taxes, and then the city taxes, town, village taxes, and it becomes a horrible nightmare.
2 addresses on the same street in the same zipcode may have completely different sales taxes, and you want each online vendor to have to figure that out?
Even the federal government can't keep that straight.

Re:Catalogs (1)

EricWright (16803) | more than 5 years ago | (#28529543)

Having worked on ERP accounting systems, I can say that sales tax should always be calculated based on the ship-to address. That said, smaller accounting packages may not be set up to support taxation for all 50 states.

However, any large corporation should understand that using a system that IS capable of handling multiple tax jurisdictions is an expected cost of doing business.

Re:Catalogs (0)

Anonymous Coward | more than 5 years ago | (#28529997)

But isn't that illegal in some fashion? If I order something in Maryland and have it shipped to New Hampshire, which doesn't have a sales tax, and then ship it down to Maryland immediately afterwards?

Tax evasion or something similar? I remember hearing about this on the news.

Re:Catalogs (0)

Anonymous Coward | more than 5 years ago | (#28529599)

Yes, you are describing the reason why this has not, and cannot easily, be implemented.

An easier approach might be to replace our current convoluted nightmare of an income tax with a national sales tax [fairtax.org] . Yes, I know that is not money collected by individual states but, since almost all merchants are already set up to collect local state taxes, it's not much of a stretch to have them collect the federal tax as well. Since that tax can then easily be levied on internet sales, federal collections will increase - which will result in more money becoming available to the individual states. A much simpler system than what we have now.

It also has the added benefit of everyone keeping all the money they earn until they choose to spend it on something.

Re:Catalogs (1)

OzPeter (195038) | more than 5 years ago | (#28529615)

Of course this could easily be fixed by the Federal Government setting a national sales tax :D

Re:Catalogs (0)

Anonymous Coward | more than 5 years ago | (#28529993)

I am all about getting rid of the income tax and just raising the sales tax to compensate. The more you buy, the more tax you pay. This eliminates the people under $30 getting a free ride, the people that claim bogus exemptions, married, not married, whatever. You buy, you pay tax. It would also encourage more savings and might even curb the US infatuation with credit card spending. Nothing pisses me off more than someone with an Escalade with 24in rims, maxed out credit cards and paying for something with food stamps and their kids getting assistance and deductions to pay for collage while I am trying to be responsible and driving a 15 year old Geo Metro and paying 100% of my child's collage without a single deduction because my AGI is over 120,000 and neither method of deducting collage expenses applies to our household.. I'd love to be driving around with 24 inch rims in an Escalade but I can't responably afford to, how in the hell is this person?

Oh yeah, take from the people that make money, yeah.. My neighbor files single with 2 kids and gets all of her federal tax money back +EIC plus free lunchs and free medical care. She makes money from federal taxes after you factor in the bonus EIC she gets. Her husband is an illegal so she does not file as married. Yeah, she is scamming but the system allows it. She also spent 6K on her car last year putting on a fiber hood, rims, and the stereo.

Re:Catalogs (1)

bostongraf (1216362) | more than 5 years ago | (#28529753)

Doesn't have the muscle? Amazon.com doesn't have the muscle to deal with this headache?

I worked for Eastern Mountain Sports as a cash register jockey back in 2002. We could take phone call orders and send product anywhere in US. The cash registers were able to calculate the sales tax based on entering the ship to address.

This points out a couple things:

It is not complicated. It is purely and simply based on the ship-to address (as somebody else already pointed out).

If a cash register could do this back in 2002 for a low-tech hiking supplies store, I'm quite certain Amazon.com can pull it off in 2009.

You do not need to multiply it by millions and millions of customers. You need to multiply it by 50 states. MAYBE add city specific taxes, as well.

Amazon already has the customer's zip code. Just do a lookup on what gets taxed, and by how much, based on zip code. Really not that difficult in the face of other things that get accomplished by computing systems these days.

Re:Catalogs (2, Interesting)

teg (97890) | more than 5 years ago | (#28529873)

For Amazon, this is certainly not about complexity. It's about the sales tax - it will no longer have a "discount" compared to local brick and mortar stores, by avoiding this extra cost that they have to pay. Thus, it will either lose some of its edge - or reduce its profits.

Re:Catalogs (1)

_avs_007 (459738) | more than 5 years ago | (#28529985)

isn't set up to take 50 states' differing tax rates and does not have the accounting muscle to pay 50 different state taxes each quarter

It's actually much worse than that... Counties, cities, etc can charge different tax rates... For example the sales tax in Los Angeles is not the same as the Sales Tax in San Francisco is not the same as the sales tax in Anaheim, etc. Further, some municipalities have exemptions on items. For example, in Oregon, even tho there is no state sales tax, the cities in southern oregon, (IIRC, can't remember if it got repealed or shot down) charges a sales tax on snack items. Further other municipalities even have "free tax" day, where certain days of the year, taxes are lifted, etc...

Re:Catalogs (1)

fermion (181285) | more than 5 years ago | (#28529995)

Then there is the issue of what is taxed and what is not. Like the federal tax, the complications come in when a the brother in law or sister in law of a high ranking government official wants special treatment for their unique situation. Of course, when the taxes become simple, then it become a simple matter to avoid the tax.

These are not impediments to Amazon doing business, as they do enough business in all the states to pay for the software that would allow them to pay sales tax. If a vendor did have pay sales tax when shipping to a state, we would see software products pop up almost overnight that would allow that to happen. Amazon could afford them. Small startups could not. To make things even, the state would have to install a system that would allow any business to quickly check to see if a tax was needed, and how much it would be. This would require quite a bit of state investment(maybe good use of stimulus money) and would be the only way to balance the market for the small business. Such a state provided system would primarily be used by small businesses, as larger firms would find it more efficient to run an automatic system. Of course, at this point, we might start thinking about county and city taxes.

If states would put such a system in place, that provided a clearinghouse for small firms and a central information for firms that wanted to provide solutions to large firms, I would certainly support a system where the vendor pays the tax. After all, the tradition of the buyer, not vendor, paying the tax comes from a time when communication and information was expensive. This is no longer the case. OTOH, I don't think unfunded mandates that the government has become so fond of imposing(read NCLB, how much has that cost families in terms of lost education that has to be paid later in remedial college classes) are appropriate. If a state wants taxes, pay for some the infrastructure.

The trucks that deliver the products pay taxes. (4, Insightful)

Maxo-Texas (864189) | more than 5 years ago | (#28529435)

I'm sure the gasoline and other annual taxes to deliver the products to the customer cover the wear and tear on the roads.

Amazon is not using sewer, electrical, police or road services locally as brick and morter store would.

Duct Tape (0)

Anonymous Coward | more than 5 years ago | (#28529467)

All will be well as long as amazon keeps carrying nuclear grade duct tape. Because, the only thing COOLER than duct tape, is NUCLEAR duct tape!

If you have a problem nuclear duct tape can't solve...then god help us all.

"http://www.amazon.com/3M-Performance-8979N-48-Millimeter-54-8-Meter/dp/B000NG3ZKI"

(And its great for fixing the liquid sodium coolant leaks in my basement too)

Tax 'em! (2, Interesting)

NineNine (235196) | more than 5 years ago | (#28529497)

I run a brick and mortar store AND an online store. No more than 5 minutes ago I was talking to a customer in the store, and she was asking what the sales tax was to see if she could buy the product cheaper online. That's ridiculous. People are short sighted and selfish. If this continues, we will have very little retail anywhere in the country in a few years, because everybody will be trying to avoid the sales tax. The gov't needs to close this huge loophole. Amazon needs to compete on a level playing field with other retailers. I know that I'd much rather add a bit of code to my web site to collect sales tax correctly all over the country than to have people avoid my brick and mortar store to try to shave a few pennies off elsewhere. I support online retailers having to collect sales tax.

If they don't use local resources why should they (4, Insightful)

Shivetya (243324) | more than 5 years ago | (#28529585)

pay taxes?

Are internet retailers using your sewer? You schools? Your police?

Then why should people living in another state fund yours?

Tax them where they reside.

Whats next? Taxing people for giving gifts to people in higher tax states? Hell, lets tax people's medical benefits - oops.

Re:If they don't use local resources why should th (2, Funny)

tmosley (996283) | more than 5 years ago | (#28529953)

Also, I want to tax the taxes that are being taxed on those goods running through my state.

Re:If they don't use local resources why should th (1)

langelgjm (860756) | more than 5 years ago | (#28530001)

Stop. Just stop. You're making too much sense.

There was a bill introduced in the Maryland General Assembly this session that sought to charge title taxes on off-road vehicles - figure that one out!

Really, though, we should all just realize that for the most part these kinds of taxes aren't supposed to make sense, they are just supposed to raise revenue.

Re:Tax 'em! (0)

Anonymous Coward | more than 5 years ago | (#28529741)

Interesting, I'd think being a business man you'd be against them paying sales tax for the same reason why you'd be against having to deal with sale tax to begin with. If you look at any boarder between a high tax state and a low tax state, you see people flocking across the boarder to purchase things cheaper. Take New Hampshire and Massachusetts with alcohol. The online businesses just made it easier by not requiring a drive. So if Amazon is playing on an uneven playing field what about different sale taxes between different states?

Re:Tax 'em! (1)

NeoSkandranon (515696) | more than 5 years ago | (#28529745)

It's ridiculous that your customer wanted to see if your prices were competitive? "Lol." (Your proper response should have been to inform her that shipping usually outstrips sales tax given the same base price)

Consumers are already required to pay local sales tax on purchases made like this, most of them just don't. Instead of states requiring retailers to deal with this, why not enforce things as they are already, the individual's responsibility?

Re:Tax 'em! (1)

tonyreadsnews (1134939) | more than 5 years ago | (#28529857)

add a bit of code to my web site to collect sales tax correctly all over the country

Don't forget that quarterly, you'll have to file and submit all those pennies to 50 different locations.
Then, what if the city and county steps in and says, "you know what, all these people are in our city are buying stuff outside our city, we want taxes for that." Do you think you would still be in business if you had the overhead to deal with taxes for 50 different locations, let alone how ever many cities/counties would start wanting taxes from you.

There is already a solution for this. The taxes are the responsibilty of the buyer (its called 'use tax'). They are the ones that are evading taxes, not the seller.

Here's a better idea. All the stores could add a note to their invoices that says what the state, city, and county use tax is for their zip code. This could be easily done via a computer lookup, leaves payment responsibility where it should be (the buyer), and notifies them how much they need to account for at the end of the year when they file their taxes.

Re:Tax 'em! (1)

maxume (22995) | more than 5 years ago | (#28530015)

I resent your implication that I fail to pay the use tax that I owe.

Get a ruler out? (0)

kheldan (1460303) | more than 5 years ago | (#28529533)

I've been following this, and I'm taking it to be a pissing match between Amazon and the Government, amirite?

What BS their logic is (4, Interesting)

Iphtashu Fitz (263795) | more than 5 years ago | (#28529541)

I'm in Massachusetts. If I happen to visit the website of the Trinity Repertory Theater (www.trinityrep.com), a theater located in Providence, RI, then my internet traffic doesn't even pass through Rhode Island, much less end in Rhode Island. Their website is hosted by a low-cost provider out in California. The only tie to Rhode Island is that the website was created by an organization in Rhode Island. If I visit that website I don't "visit" Rhode Island. So why should Rhode Island have ANY claim on anything I might purchase from an affiliate program hosted on that site? I'm visiting a website hosted in California and if they were an Amazon affiliate then that would involve a company located in Washington. RI doesn't have any valid claim to tax such a transaction.

By their own logic, I'm buying goods from a brick & mortar store in California (or more appropriately Seattle), NOT Rhode Island. If anything, the company in RI is simply acting as an advertising agency. They designed an advertisement (the website) that's on display in California for a company that actually does business in Washington.

Out of state phone orders (3, Interesting)

Maltese Falcon (11786) | more than 5 years ago | (#28529581)

By the very same reasoning they use for Amazon, if anyone goes to a phone located in Rhode Island and makes a purchase of anything, it's the same as going to a brick and mortar of that shop in the state and is also subject to equivalent taxes. Even ordering by US mail out of a catalog would reason out to the same logic (providing the catalog and/or mailbox is physically located in R.I.). Amazon might even be able to use that to force R.I. to either include phone orders across the board or drop the bill/law.

I'm wondering (0)

Anonymous Coward | more than 5 years ago | (#28529589)

if all US states get a VAT for internet sales, will amazon then close their US business ?

Sale origin difficult to pinpoint (5, Insightful)

bsandersen (835481) | more than 5 years ago | (#28529669)

The problem with this story is that it isn't clear where the sale has taken place. I click a button in Massachusetts, paid for the object with money from a Connecticut bank, the company hosting the web site is in New York, the headquarters of the company is in Arkansas, the shipment is made from New Hampshire, my mom receive the materials in Illinois (I dropped shipped her a gift). Where was the sale? I don't know what the right answer is... but I'm certain that state legislatures rushing to get something passed will end up making a mess bigger than the one they find themselves in now. I don't blame Amazon for pushing back. If I were Amazon management I'd be doing the same thing.

Re:Sale origin difficult to pinpoint (2, Insightful)

Anonymous Coward | more than 5 years ago | (#28530053)

The problem with this story is that it isn't clear where the sale has taken place.

Fortunately there is a very large body of law (mail order) which already covers this topic.

The test for sales tax isn't where the sale takes place, it's whether the seller has a business presence in the state the goods are shipped to.

Rhode Island is claiming these Amazon affiliates cause Amazon to have a presence in Rhode Island.

Your Rights Online? (1)

David Greene (463) | more than 5 years ago | (#28529867)

Are you kidding me? Just how petty are we today? This is not a "rights" issue. This is a responsibility issue.

First, if affiliates receive some kind of compensation from Amazon, they should pay taxes on it. Hopefully everyone can agree on that.

The larger issue is how to collect the state/local sales taxes from Amazon customers. All local retailers need to collect the taxes and send them to the appropriate units of government. It should be no different for Amazon or any other online or mail-order retailer. Their prices are artificially low due to the lack of sales tax and that's poor policy when it comes to maintaining a healthy business climate. We need our local retailers for many reasons, not the least of which is their local presence, meaning they have a stake in what happens in the community.

We're all responsibile for our society and paying taxes is part of that. Amazon and other non-local retailers essentially facilitate tax evasion by consumers. Yes, it is the consumers who are evading but it is Amazon and others who are complicit in it.

The local sales taxes pay for vital things like roads, schools, emergency services and a host of other things. Paying taxes isn't a case of, "do I benefit, and if not, I shouldn't have to pay." We all benefit from these things and we all have a responsibility to support them. Anything less is shirking your responsibility. I've never understood why anti-tax forces hate their communities so much.

Thank you Amazon! (1)

pig-power (1069288) | more than 5 years ago | (#28529913)

Glad to see a company taking a stand.
Time to order another book...

Amazon is basically screaming (4, Interesting)

C_Kode (102755) | more than 5 years ago | (#28529955)

Amazon is basically screaming: "Taxation Without Representation" and taking a stand against what it believes is unconstitutional taxation. (ie being taxed by a foreign (different state) government) This is exactly what happen in the mid-late 1700s and the reason the US is it's own country rather than part of the United Kingdom.

I completely agree with Amazon. I happen to have an Amazon shop (I'm not located in either of those states) I know it screws the webstore owner, but Amazon is doing the right thing and THEY need to stand up to their own state's goverment and let them know that they are hurting their own people by being greeding and trying to tax people that don't even live in their state.

Re:Amazon is basically screaming (0)

Anonymous Coward | more than 5 years ago | (#28530089)

"Taxation Without Representation" Heck, I live in the US, taxation with representation is WORSE.

Sales tax should be that of business location (1)

voss (52565) | more than 5 years ago | (#28529977)

Sales tax for interstate domestic commerce should be based on location of business not the location of the consumer, the sale happens where the business is located.

  Amazon is incorporated in delaware, delaware has no state sales tax, hence the tax you owe is 0%

this sounds self defeating (2, Interesting)

Sir_Real (179104) | more than 5 years ago | (#28529979)

So the store doesn't get a sale, doesn't pay the stakeholder, who was presumably going to spend money in the state on taxable goods and services. The state still loses. The original sale doesn't generate revenue and the seller won't be purchasing anything that generates tax revenue with the proceeds of the sale that didn't happen. Sorry states, there will always be at least one state that will take advantage of this and host amazon friendly affiliate websites. This is kinda like how you can incorporate an LLC in any state you have an "agent" in (100 bucks a year gets you agent representation in any state) but no one in their right minds incorporates an LLC outside of Nevada or Delaware because of the incredibly low taxes and business friendly body of case law they've produced. You still have to pay personal income tax in the state you perform work but you get a credit for taxes you pay to other states for your state of residence taxes.

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