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I actually don't understand that part of it. How do sales tax on CT consumers -- who may or may not be driven to Amazon by a CT affiliate -- compel Amazon to te

I actually don't understand that part of it. How do sales tax on CT consumers -- who may or may not be driven to Amazon by a CT affiliate -- compel Amazon to terminate the affiliate programme? CT-based affiliates may be driving traffic from outside CT, and CT-based purchases -- the thing being taxed -- might have been driven by an affiliate in Iceland. Terminating _sales_ to Connecticut would amount to a refusal to pay the tax. Instead Amazon has chosen to raze the profits of a minority of CT constituents. They must be hoping that the ousted affiliates will march on New Haven. (If I were a successful affiliate, though, I'd just make an out-of-state LLC and pass income through.)

SoftwareMaven 15y ago
I believe the problem comes from having a physical presence in the state. Most states have sales tax rules that say if you have a physical presence, you must charge sales tax. The rules were changed such that Connecticut is treating affiliates as a physical presence. If Amazon keeps the affiliates, they have to charge sales tax on everybody who purchases in Connecticut, which they really don't want to do. While I'm sure part of the reason they don't want to charge tax is that no tax makes Amazon cheaper, I bet a bigger portion is the headache of trying to manage every single municipalities convoluted sales tax rules. I know in my city (in Utah), there are dozens of rules for types of goods that determine different rates. Imagine doing that on a nationwide scale.
- machinedog 15y ago
  I think the problem is that they want to apply a sales tax to anyone that is referred to Amazon /worldwide/ by a Connecticut referrer. That is why Amazon argues that it is unconstitutional. If it were simply taxing Connecticut consumers it would be similarly complicated, but I think there is more constitutional grounds for this. I'd have to check. It's not like Amazon is going to pull out of the state.

SoftwareMaven 15y ago

I believe the problem comes from having a physical presence in the state. Most states have sales tax rules that say if you have a physical presence, you must charge sales tax. The rules were changed such that Connecticut is treating affiliates as a physical presence. If Amazon keeps the affiliates, they have to charge sales tax on everybody who purchases in Connecticut, which they really don't want to do. While I'm sure part of the reason they don't want to charge tax is that no tax makes Amazon cheaper, I bet a bigger portion is the headache of trying to manage every single municipalities convoluted sales tax rules. I know in my city (in Utah), there are dozens of rules for types of goods that determine different rates. Imagine doing that on a nationwide scale.

machinedog 15y ago
I think the problem is that they want to apply a sales tax to anyone that is referred to Amazon /worldwide/ by a Connecticut referrer. That is why Amazon argues that it is unconstitutional. If it were simply taxing Connecticut consumers it would be similarly complicated, but I think there is more constitutional grounds for this. I'd have to check. It's not like Amazon is going to pull out of the state.