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Rhode Island Affiliates Banned From Amazon.com Sales
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."
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.
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.
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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.
Your entire post is just wrong. First, Amazon dosn't pay sales tax on items you buy from them in thier home state unless it is a state where they have a nexus. Second, if your home state has a Sales Tax it most likly has a Use Tax and you are supposed to pay that tax on items you buy from out of state that haven't had sales tax paid on them in the other state and sometimes even if it has. This has NOTHING to do with the Commerce clause of the US Constitution.
Is buying a Harley Davidson as your first motorcycle since you were 16 at age 49 a midlife crisis issue?
What exactly do you mean? When someone clicks on one of the recommended books on my Amazon affiliate page*, they are taken to Amazon.ca where they can buy the book directly from Amazon. I don't handle any of their transactions, or ship any books; all my affiliate page does is give me a commission on any book that a visitor to my site may purchase if they access Amazon.ca through the links on my site. There's no additional 'trust' needed.
*which I am not going to link here, because that would be affiliate link spam. My site is in my sig if anyone wants more information on responsible products.
Find environmentally and socially responsible products on http://buy-right.net
You can't calculate tax just by zip code - if you could, it'd be simple. You have to account for states, counties and municipalities, and zip codes don't line up completely with at least the last two. Zip+4 might, but that in itself is a nightmare (Zip+4 can be down to 10 or fewer individual addresses).
A couple of examples: I live in a suburb of Chicago that gets much of its revenue from sales taxes on malls, etc. within the city limits. Its tax rate is different from the next municipality over, but my zip code overlaps that suburb. Another example: my office is in a town that straddles the border between Cook County, IL and Lake County, IL. The Zip code at my office (in Cook) and at the hospital where I have customers (in Lake) are the same, but the tax rates differ by 3% (Cook has among the highest sales taxes in the nation, if not the highest).
fencepost
just a little off
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.
Mail order has *always been there* and always presented the option of letting people purchase out of state and duck paying sales tax. If your state has a confiscatory sales tax rate that makes mail order 7-10% less expensive, then move your business somewhere else or let your legislators know that sales tax is ruining your business.
Oh, and it's not a loop hole. It's called the commerce clause of the US Constitution. It protects your business from being subject to the laws of all 50 US states as well as preventing states from creating tarriffs and anti-competitive laws to keep out of state competitors like you out of the market.
-- $G
Wrong, as with most of the rest of your post. There is no such "reimbursement". If a resident of Maryland physically goes to Pennsylvania and buys something, the sales tax on the transaction is owed to Pennsylvania. There is no reimbursement, even if Maryland also demands a "use tax" on the item.
The Supreme Court decided some time ago (in a mail order case, not an Internet case) that companies could not be required to collect sales taxes for states in which they did not have a "nexus". It's not a matter of a "tax holiday" or of Congress sitting on their behind; Congress has no obligation to act for the states in this matter. It's not a matter of enforcing state law. It's a matter of states trying to widen the definition of that "nexus" beyond what the courts have accepted in the past. It probably won't work, but Amazon isn't willing to get into a court battle over it. Newegg, on the other hand, after initially collecting New York tax, ceased doing so after consulting their lawyers. NY has apparently not taken them up on the challenge.
Well, there's 50 state sales tax rates, plus thousands of county and tens if not hundreds of thousands of city sales tax rates. Plus special districts. And not all of them line up on ZIP code boundaries, in many places part of a ZIP code's inside a city (subject to city sales tax) and part is outside (exempt from city sales tax). And then you have the fun of exactly what items are taxable (and it's not binary, in many places items are classified differently by the different taxing authorities so just because an item's subject to state sales tax doesn't mean it's neccesarily subject to city sales tax). And those rules change, so just because the rules say one thing this week doesn't mean they'll say the same thing next week.
So how does a business get an authoritative answer (one it can rely on in a court of law) for any arbitrary address? And how does it get notified by all those taxing authorities when the rules it needs to follow change? One of the principles of law is that the people who have to obey the law must be able to know what they need to do to obey it, and while I see all these states making lots of noise about businesses being obligated to follow the law I don't see them setting anything up to tell those businesses what the law actually says. And it's the responsibility of the goverment involved to tell the businesses what the law requires, it's not the business's responsibility to guess at it.
>generally trust Amazon more than I do the small fry sites they 'affiliate' with.
I think you're a bit misguided here. The "small fry sites" you're referring to are sites, like mine, that link to Amazon products in exchange for a cut from Amazon. It's huge marketing for Amazon, and a tidy revenue for me and others. But not now. I'm in NC and I got screwed. Amazon hasn't killed people *selling* products, they've just cut off people that are doing free advertising for them.
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And my infrastructure pays for parks I enjoy, roads I use, schools which educate the people around me so that they don't all turn to street crime, police to deal with the ones who do, etc. Taxes buy me civilization.
I don't believe that is true, at least not according to this:
http://senseofevents.blogspot.com/2009/06/duty-of-wealthy-is-to-be-robbed-by.html
Granted, its a 25 year old study, but I don't imagine the situation has improved.
I HAVE CUBIC WISDOM THAT TRANSCENDS AND CONTRADICTS ONE DAY GODS
You mean "it's easy to not pay sales tax and get away with it".
You are required to pay the sales tax to the local government where you live.
Actually, it's unconstitutional for any state to charge sales tax on goods bought from another state. What you're describing is the "use tax" that many states have as a "work-around". Sadly, the days when people cared about the constitution seem to be behind us.
The only reason that online retailers don't charge you is because they would need to know and keep up with the tax laws of hundreds or thousands of locations, and set up payments to them. It would be prohibitively complicated.
Actually, that's trivial - you just buy software that does that for you. Plenty of "whole store" turnkey computer systems manage this, both the local sales tax and the local income tax by store address (you'd think it would be by ZIP code, but Philly has tax districts smaller than ZIP codes).
Socialism: a lie told by totalitarians and believed by fools.