6 ms·

Amazon Associates to Terminate North Carolina Members

73 points by smakz 17y ago

iends 17y ago
Misleading headline because the email says "Please note that this is not an immediate termination notice and you are still a valued participant in the Associates Program". They are only going to terminate things if the legislation is passed, which it has not yet. This morning when I got the email I could not find out the specifics of the bill. If anybody has more information, please post it.
- jerf 17y ago
  Here's a bit more: http://www.news-record.com/content/2009/06/17/article/amazon_warns_nc_affiliates_about_tax_issue http://www.news-record.com/content/2009/06/17/article/amazon... Maybe somebody else can find the law itself based on that.
  - iends 17y ago
    S202: "TO PERMANENTLY IMPOSE THE STATE AND LOCAL SALES AND USE TAX ON SALES OF DIGITAL PRODUCTS EFFECTIVE OCTOBER 1, 2009; TO PERMANENTLY REQUIRE A REMOTE SELLER TO COLLECT SALES TAX WHEN THE SELLER ENTERS INTO AN AGREEMENT WITH ONE OR MORE STATE RESIDENTS PROVIDING FOR A COMMISSION WHEN THE RESIDENT REFERS CUSTOMERS TO THE SELLER AND THE SELLER HAS GROSS RECEIPTS OF AT LEAST TEN THOUSAND DOLLARS ANNUALLY FROM SALES TO ALL CUSTOMERS REFERRED TO THE SELLER BY ALL SUCH RESIDENTS, EFFECTIVE WHEN IT BECOMES LAW;" Bill: http://www.ncleg.net/Sessions/2009/Bills/Senate/PDF/S202v6.pdf http://www.ncleg.net/Sessions/2009/Bills/Senate/PDF/S202v6.p...
- deleted 17y ago
  [deleted]
- sili 17y ago
  I guess its an attempt by Amazon to make sure NC residents know about this legislature and an attempt to galvanize them to act against it.
asolove 17y ago
I understand that this has an "adverse" affect on those who use these programs, but any taxes have an adverse affect on any commerce. Is there a reason why other transactions should be taxed and these shouldn't?
- ghshephard 17y ago
  Traditionally, transactions that do not take place _within_ a particular state are not taxed by that state's sales taxes. (Edit: That does not mean the recipient shouldn't pay Use Taxes - In California, our (Edit: Out of state) Online Vendors don't charge us sales tax, but we still owe Tax to the State of California as a business - see http://www.ftb.ca.gov/current/usetax.shtml http://www.ftb.ca.gov/current/usetax.shtml) North Carolina is trying to tax a transaction taking place on the "internet." Amazon's response is not unexpected. The Net-effect of the North Carolina tax legislation may be to drive a lot of economic activity out of their state, including the referral income which was previously subject to North Carolina state income taxes.
- amalcon 17y ago
  Well, there's actually a legitimate dormant commerce clause argument to be made here. The commerce clause is the most abused part of the U.S. Constitution, but this is precisely the sort of thing it is supposed to apply to.
  - ryanwaggoner 17y ago
    I'd really love to hear that argument.
    - ubernostrum 17y ago
      I imagine a court will be hearing it quite soon if this legislation takes effect. And if a case related to this goes all the way up the federal court system, it could get really interesting; Scalia and Thomas don't buy the idea of the dormant commerce clause.
    - amalcon 17y ago
ryanwaggoner 17y ago
It sounds like North Carolina is trying to claim that they are owed sales tax on any transactions that occur between Amazon and a customer if the referral came from an Amazon Associate in NC, even if neither Amazon or the customer is in NC. Why stop there? Why not tax all transactions where the person originally heard about the product from someone in NC, or where the computer they use to purchase was bought in NC. Give me a break. This is bullshit and unconstitutional and will hopefully be struck down if it's passed at all.
- viggity 17y ago
  For those of you wondering why this is probably unconstitutional: http://en.wikipedia.org/wiki/Commerce_Clause http://en.wikipedia.org/wiki/Commerce_Clause
  - vaksel 17y ago
    What I don't understand is why Amazon doesn't get it's shit together, and sue North Carolina over this. They have plenty of cash to make it happen, and the positive outcome will stop other states from pulling this crap in the future.
    - dangoldin 17y ago
      I imagine that they hope the negative publicity will get NC to change it's mind without having to resort to legal means.
    - lief79 17y ago
      First, it's more PC to have their North Carolina members complain about it which might stop it from passing. After that, it's probably cheaper to get someone else to do it for them. Only if the losses were substantial, or too many other states started following the lead (which could then make the losses substantial) would Amazon bother. Odds are it's not cost effective for them.
  - jhancock 17y ago
    I can see why some would argue it violates the Commerce Clause. But interstate commerce has been well contorted for a long time to the desires of the feds (e.g. marijuana) and states (e.g. alcohol). The North Carolina position is most likely a sign of things to come as state revenues continue to decline. The choice is simple from a state perspective: follow a strict interpretation of the constitution or have funds to open public schools this fall.
kqr2 17y ago
California has something called a use tax. Turbo Tax will prompt you about this. In theory, you need to pay a use tax for things purchased outside of the state from a vendor who did not collect sales tax (e.g. Amazon or other internet retailer outside of California) So, while it is true that California cannot levy taxes on out of state vendors, they can levy a use tax on its residents. http://www.boe.ca.gov/sutax/usetaxreturn.htm http://www.boe.ca.gov/sutax/usetaxreturn.htm http://www.boe.ca.gov/sutax/faqusetax.htm http://www.boe.ca.gov/sutax/faqusetax.htm Do I owe use tax? You generally owe California use tax when you use, consume, give away or store tangible personal property (i.e., products you can see, weigh, feel or touch, such as clothing, books, computers, DVDs or CDs) in California that you purchased from an out-of-state vendor. If the out-of-state vendor does not collect the California tax on your purchase, you must pay the tax.
- sachinag 17y ago
  I remember filing in New York State in 2000 or 2001 or thereabouts where the state actually went after use tax. The form actually had a line - you could calculate your use tax or just give up and give them 38 bucks, which was their average estimated amount. I think everyone just gave up.
- stress 17y ago
  North Carolina has a Use Tax, too.
zaidf 17y ago
Not a proud moment for my state.
ghshephard 17y ago
California had a similar "Amazon Tax": AB 178. It was killed: "Current law, under Quill v. North Dakota, requires a business have a physical presence or “nexus” in a state in order for the state to compel that business to collect and remit sales taxes. AB 178 represented an attempt to circumvent the federal interstate commerce law by presuming that a company has a physical nexus if business is solicited through a third-party advertiser that is based in California." April 28th: "However, a bit of rare good news for California taxpayers came out of Sacramento yesterday. Just as the bill was scheduled for consideration, the Assembly Committee on Revenue & Taxation voted to remove AB 178 from the docket, effectively taking this odious piece of legislation off the table, at least for this year." http://www.atr.org/california-amazon-tax-bill-dies-quick-a3170 http://www.atr.org/california-amazon-tax-bill-dies-quick-a31...
sutro 17y ago
Time for TechCrunch to do another poll. What's more important: Amazon or North Carolina?
jhancock 17y ago
"We regret to inform you that the North Carolina state legislature (the General Assembly) appears ready to enact an unconstitutional tax collection scheme that would leave Amazon.com little choice but to end its relationships with North Carolina-based Associates. You are receiving this e-mail because our records indicate that you are an Amazon Associate and resident of North Carolina." There are two factually false parts to this quote. "enact an unconstitutional tax collection scheme" Its fine to say it should be challenged in court, but its not at all clear its patently unconstitutional. "would leave Amazon.com little choice but to end its relationships with North Carolina-based Associates" I'm willing to bet if other states followed suit, Amazon would find the "choice". State taxes on internet sales are going to be sought after as states look for ways to solve their revenue problems. I'm not arguing in favor of such taxes but do see this as a sign of the times.

73 points by smakz 17y ago

iends 17y ago

Misleading headline because the email says "Please note that this is not an immediate termination notice and you are still a valued participant in the Associates Program". They are only going to terminate things if the legislation is passed, which it has not yet. This morning when I got the email I could not find out the specifics of the bill. If anybody has more information, please post it.

jerf 17y ago
Here's a bit more: http://www.news-record.com/content/2009/06/17/article/amazon_warns_nc_affiliates_about_tax_issue http://www.news-record.com/content/2009/06/17/article/amazon... Maybe somebody else can find the law itself based on that.
- iends 17y ago
  S202: "TO PERMANENTLY IMPOSE THE STATE AND LOCAL SALES AND USE TAX ON SALES OF DIGITAL PRODUCTS EFFECTIVE OCTOBER 1, 2009; TO PERMANENTLY REQUIRE A REMOTE SELLER TO COLLECT SALES TAX WHEN THE SELLER ENTERS INTO AN AGREEMENT WITH ONE OR MORE STATE RESIDENTS PROVIDING FOR A COMMISSION WHEN THE RESIDENT REFERS CUSTOMERS TO THE SELLER AND THE SELLER HAS GROSS RECEIPTS OF AT LEAST TEN THOUSAND DOLLARS ANNUALLY FROM SALES TO ALL CUSTOMERS REFERRED TO THE SELLER BY ALL SUCH RESIDENTS, EFFECTIVE WHEN IT BECOMES LAW;" Bill: http://www.ncleg.net/Sessions/2009/Bills/Senate/PDF/S202v6.pdf http://www.ncleg.net/Sessions/2009/Bills/Senate/PDF/S202v6.p...
deleted 17y ago
[deleted]
sili 17y ago
I guess its an attempt by Amazon to make sure NC residents know about this legislature and an attempt to galvanize them to act against it.

asolove 17y ago

I understand that this has an "adverse" affect on those who use these programs, but any taxes have an adverse affect on any commerce. Is there a reason why other transactions should be taxed and these shouldn't?

ghshephard 17y ago
Traditionally, transactions that do not take place _within_ a particular state are not taxed by that state's sales taxes. (Edit: That does not mean the recipient shouldn't pay Use Taxes - In California, our (Edit: Out of state) Online Vendors don't charge us sales tax, but we still owe Tax to the State of California as a business - see http://www.ftb.ca.gov/current/usetax.shtml http://www.ftb.ca.gov/current/usetax.shtml) North Carolina is trying to tax a transaction taking place on the "internet." Amazon's response is not unexpected. The Net-effect of the North Carolina tax legislation may be to drive a lot of economic activity out of their state, including the referral income which was previously subject to North Carolina state income taxes.
amalcon 17y ago
Well, there's actually a legitimate dormant commerce clause argument to be made here. The commerce clause is the most abused part of the U.S. Constitution, but this is precisely the sort of thing it is supposed to apply to.
- ryanwaggoner 17y ago
  I'd really love to hear that argument.
  - ubernostrum 17y ago
    I imagine a court will be hearing it quite soon if this legislation takes effect. And if a case related to this goes all the way up the federal court system, it could get really interesting; Scalia and Thomas don't buy the idea of the dormant commerce clause.
  - amalcon 17y ago

ryanwaggoner 17y ago

It sounds like North Carolina is trying to claim that they are owed sales tax on any transactions that occur between Amazon and a customer if the referral came from an Amazon Associate in NC, even if neither Amazon or the customer is in NC. Why stop there? Why not tax all transactions where the person originally heard about the product from someone in NC, or where the computer they use to purchase was bought in NC. Give me a break. This is bullshit and unconstitutional and will hopefully be struck down if it's passed at all.

viggity 17y ago
For those of you wondering why this is probably unconstitutional: http://en.wikipedia.org/wiki/Commerce_Clause http://en.wikipedia.org/wiki/Commerce_Clause
- vaksel 17y ago
  What I don't understand is why Amazon doesn't get it's shit together, and sue North Carolina over this. They have plenty of cash to make it happen, and the positive outcome will stop other states from pulling this crap in the future.
  - dangoldin 17y ago
    I imagine that they hope the negative publicity will get NC to change it's mind without having to resort to legal means.
  - lief79 17y ago
    First, it's more PC to have their North Carolina members complain about it which might stop it from passing. After that, it's probably cheaper to get someone else to do it for them. Only if the losses were substantial, or too many other states started following the lead (which could then make the losses substantial) would Amazon bother. Odds are it's not cost effective for them.
- jhancock 17y ago
  I can see why some would argue it violates the Commerce Clause. But interstate commerce has been well contorted for a long time to the desires of the feds (e.g. marijuana) and states (e.g. alcohol). The North Carolina position is most likely a sign of things to come as state revenues continue to decline. The choice is simple from a state perspective: follow a strict interpretation of the constitution or have funds to open public schools this fall.

kqr2 17y ago

California has something called a use tax. Turbo Tax will prompt you about this. In theory, you need to pay a use tax for things purchased outside of the state from a vendor who did not collect sales tax (e.g. Amazon or other internet retailer outside of California) So, while it is true that California cannot levy taxes on out of state vendors, they can levy a use tax on its residents. http://www.boe.ca.gov/sutax/usetaxreturn.htm http://www.boe.ca.gov/sutax/usetaxreturn.htm http://www.boe.ca.gov/sutax/faqusetax.htm http://www.boe.ca.gov/sutax/faqusetax.htm Do I owe use tax? You generally owe California use tax when you use, consume, give away or store tangible personal property (i.e., products you can see, weigh, feel or touch, such as clothing, books, computers, DVDs or CDs) in California that you purchased from an out-of-state vendor. If the out-of-state vendor does not collect the California tax on your purchase, you must pay the tax.

sachinag 17y ago
I remember filing in New York State in 2000 or 2001 or thereabouts where the state actually went after use tax. The form actually had a line - you could calculate your use tax or just give up and give them 38 bucks, which was their average estimated amount. I think everyone just gave up.
stress 17y ago
North Carolina has a Use Tax, too.

zaidf 17y ago

Not a proud moment for my state.

ghshephard 17y ago

California had a similar "Amazon Tax": AB 178. It was killed: "Current law, under Quill v. North Dakota, requires a business have a physical presence or “nexus” in a state in order for the state to compel that business to collect and remit sales taxes. AB 178 represented an attempt to circumvent the federal interstate commerce law by presuming that a company has a physical nexus if business is solicited through a third-party advertiser that is based in California." April 28th: "However, a bit of rare good news for California taxpayers came out of Sacramento yesterday. Just as the bill was scheduled for consideration, the Assembly Committee on Revenue & Taxation voted to remove AB 178 from the docket, effectively taking this odious piece of legislation off the table, at least for this year." http://www.atr.org/california-amazon-tax-bill-dies-quick-a3170 http://www.atr.org/california-amazon-tax-bill-dies-quick-a31...

sutro 17y ago

Time for TechCrunch to do another poll. What's more important: Amazon or North Carolina?

jhancock 17y ago

"We regret to inform you that the North Carolina state legislature (the General Assembly) appears ready to enact an unconstitutional tax collection scheme that would leave Amazon.com little choice but to end its relationships with North Carolina-based Associates. You are receiving this e-mail because our records indicate that you are an Amazon Associate and resident of North Carolina." There are two factually false parts to this quote. "enact an unconstitutional tax collection scheme" Its fine to say it should be challenged in court, but its not at all clear its patently unconstitutional. "would leave Amazon.com little choice but to end its relationships with North Carolina-based Associates" I'm willing to bet if other states followed suit, Amazon would find the "choice". State taxes on internet sales are going to be sought after as states look for ways to solve their revenue problems. I'm not arguing in favor of such taxes but do see this as a sign of the times.