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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."
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
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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.
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!
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.
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
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.
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.
>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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