8 ms·

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

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.
gojomo 17y ago
"[O]riginally heard about" is a weak analogy. The issue with Associates is that actual money is changing hands. It's almost like having a storefront physically in NC, which would traditionally require a multi-state retailer to collect sales tax in that state. I am a very anti-tax individual overall but the cross-state-delivery sales-tax loophole, which advantages distant sellers, has grown with the rise of e-commerce and efficient long-distance shipping to now seriously distort economic activity. Why should a distant seller have an 8+% cost advantage over local sellers? Why should extra fuel/pollution/time be expended because of that jurisdictional anomaly? Consider the similar case of NewEgg vs. Amazon for purchases by California residents. Amazon has subsidiaries in California. Amazon employs people in California. Amazon advertises in California. Amazon enters into long-term business agreements with California residents and businesses, including through the Associates program. But because of some legal maneuvering, and keeping a few offices and warehouses outside California, Amazon can avoid collecting sales tax, while NewEgg must. Simply because NewEgg has more operations in California -- operations that are already subject to payroll, property, and income taxes -- it also faces an extra tax on each customer transaction. (And as much as I would like to eliminate sales tax for all merchants, the state's legitimate activities have to be financed somehow, and often the alternatives to a broad consumption tax like a sales tax are even worse: higher income or property taxes.) The best constitutional solution would be for the federal Congress to equalize the playing field somehow. (Note also that if the sales tax base is broadened, the rate can go down.) But until that day, I don't blame states that see large-scale retail, contractual, commission-paying, operational activity happening inside their own borders and say: this counts as in-state commerce, and should be treated the same as other retail activity.
- ghshephard 17y ago
  California residents who purchase from Amazon owe a use tax. Nevada Residents don't. The rationale is that if you are charging out of state residents sales tax when they don't pay it in their state, then they won't do business with you - unfairly creating an advantage for merchants in other states. http://www.ftb.ca.gov/current/usetax.shtml http://www.ftb.ca.gov/current/usetax.shtml My company is pretty good about paying the Use Tax, and, in general, encourages our vendors to charge us California Sales tax where possible.

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.

gojomo 17y ago

"[O]riginally heard about" is a weak analogy. The issue with Associates is that actual money is changing hands. It's almost like having a storefront physically in NC, which would traditionally require a multi-state retailer to collect sales tax in that state. I am a very anti-tax individual overall but the cross-state-delivery sales-tax loophole, which advantages distant sellers, has grown with the rise of e-commerce and efficient long-distance shipping to now seriously distort economic activity. Why should a distant seller have an 8+% cost advantage over local sellers? Why should extra fuel/pollution/time be expended because of that jurisdictional anomaly? Consider the similar case of NewEgg vs. Amazon for purchases by California residents. Amazon has subsidiaries in California. Amazon employs people in California. Amazon advertises in California. Amazon enters into long-term business agreements with California residents and businesses, including through the Associates program. But because of some legal maneuvering, and keeping a few offices and warehouses outside California, Amazon can avoid collecting sales tax, while NewEgg must. Simply because NewEgg has more operations in California -- operations that are already subject to payroll, property, and income taxes -- it also faces an extra tax on each customer transaction. (And as much as I would like to eliminate sales tax for all merchants, the state's legitimate activities have to be financed somehow, and often the alternatives to a broad consumption tax like a sales tax are even worse: higher income or property taxes.) The best constitutional solution would be for the federal Congress to equalize the playing field somehow. (Note also that if the sales tax base is broadened, the rate can go down.) But until that day, I don't blame states that see large-scale retail, contractual, commission-paying, operational activity happening inside their own borders and say: this counts as in-state commerce, and should be treated the same as other retail activity.

ghshephard 17y ago
California residents who purchase from Amazon owe a use tax. Nevada Residents don't. The rationale is that if you are charging out of state residents sales tax when they don't pay it in their state, then they won't do business with you - unfairly creating an advantage for merchants in other states. http://www.ftb.ca.gov/current/usetax.shtml http://www.ftb.ca.gov/current/usetax.shtml My company is pretty good about paying the Use Tax, and, in general, encourages our vendors to charge us California Sales tax where possible.