Slashdot Mirror
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."
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.
moox. for a new generation.
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
Custom electronics and digital signage for your business: www.evcircuits.com
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.
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.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
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!
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.
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.
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.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
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.
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.
moox. for a new generation.
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.
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.
-- $G
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.
I am become
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.
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?
-- $G
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
And I suppose the person with 50k in credit card debt and a house in foreclosure is also in that situation because they can't raise enough income?
I'm sure it has nothing to do with the million dollar house and their insatiable desire for new goods. A good rule of thumb for people (and states for this matter) in debt is to first create a budget that reduces spending below ones income. Not to figure out a way to make more money. This is not rocket science.
Will some of the sales tax go towards purchasing a clue/sense-of-humor for certain, sadly bereft individuals?
Now that I think about it, I'm pretty sure everything I just said is completely wrong.
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?
Well, they could stop spending. They could start to consider that this massive govt. run healthcare (regardless of your views on it) is something we absolutely cannot afford right now. They could stop with the pork in bills.
Why can't the govt. do what a 'sane' normal household does when it is having budget problems. The first thing is to cut spending!!
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
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
Taxes are never levied for the benefit of the taxed. I live in Oregon (NO Sales Tax!) so I REFUSE to pay yours. I never voted for it (Taxation without representation ring a bell?) and my states has voted NO on sales tax NINE TIMES. Fix your deficit the way all of us do: Spend less. Too many state wastrels on the payroll? fire a few.
- Minutus cantorum, minutus balorum, minutus carborata descendum pantorum.
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.
Equally bullshit is your state trying to tax me for a purchase when I've never set foot in 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.
RobotBox - Robot projects from around the world