Update To California Amazon Sales Tax

Update To  California “Amazon Sales Tax”

As you may recall from my post  about Amazon Sales Tax in California, not many people were happy.
For affiliate who reside in California and dropped by Amazon, this may be of interest to you. According to “The Sacramento Bee” Amazon has persuaded California lawmakers to delay tax collection.

Tentatively, Amazon has reached an agreement with California state lawmakers and brick-and-mortar stores to stop fighting a requirement that Internet retailers collect sales tax on any California purchases. Under a handshake deal, Amazon has accomplished delaying the sales tax in California until September 2012.

What does lay the groundwork for? Could it be a national online sales tax law. It’s seems that Amazon and retails like Wal-Mart and Barnes & Noble has agreed to lobby Washington over the next 11 months for an Internet sales tax law that would go across 50 states.

However, if no federal deal emerges by July 31,2012, Amazon would have to begin collecting California sales taxes starting on Sept. 15, 2012.

Currently state lawmakers are going to introduce a bill that will delay implementation of the online sales tax law until that date according to Assemblyman Charles Calderon D-Whittier. However, Gov. Jerry Born has not weighed in on the issue as yet.

For complete details you can read the Sacramento Bee.

Okay, this could help all affiliates if Amazon and other retailers can get a federal sales tax law implemented. Can our Congress stop arguing enough to do it? Hm-m-m, that’s an interesting question isn’t it.

This article is from myaffiliateplace.blogspot.com

California and the new Amazon Tax Law

California and the new “Amazon Tax Law”

Who do you think will see the greatest impact, affiliate or the state when it comes to passing the California online sales tax law?

In my opinion, I believe that it will be the state of California or any time that imposes the tax. Why? If affiliates are making their income online, they cannot afford to stand by and continue to see a major drop of revenue of 50% or more due to the new Amazon law. And it is happening to some. Why? Many of the online retailers, not just Amazon, are opting to drop their affiliate programs in the state, or any state that has the “Amazon Tax Law”, to avoid the tax. Simple solution for the online retailer? But a crushing blow to the affiliate.

That leaves the affiliate deciding whether to regroup with different products or moving from the state to recover their lost revenue. Well, for those that have the means to move, that is what many are choosing or contemplating. I can’t blame them. Granted, the small affiliate without the means will be hurt because they will be forced to re-establish themselves with new products to make up the drop of income.

The end result, in my opinion, is lost revenue for the state that imposes the tax, and more revenue for states that have not imposed the tax, when “big money” affiliates or small online businesses leave the “Amazon Tax” state for states with friendlier taxes for those working online. Gee, what was the state thinking?

This article is from myaffiliateplace.blogspot.com

Amazon, California Affiliates and Taxes

Amazon, California Affiliates and Taxes

To my surprise and many others, the California state law which went into affect on July 1, 2011 came quickly.

And as you can expect, Amazon and other online retailers will or are going to shut down their affiliate programs in the state. It has been estimated that for Amazon affiliates alone, that amounts to about 25000 sites that will no longer be able to advertise Amazon products. All sites, no matter how much money they have made for Amazon will shut down because of the new California law.

The governor of California thought that this is a “common sense idea”. However, did the state government just take an overview of how much revenue they thought they were going to make, without figuring in the possible lose of revenue, or the possibility that the bigger affiliates would move from the state? I wonder?

For those states that do not have these laws, it may be wise to court these companies, they may end up being the greatest revenue gainers in the long run.

Check out below to determine where your state is in the mix of the new law.

States where Amazon collects sales taxes:
Kansas
Kentucky
New York
North Dakota
Washington State

Why only these states? These are the only markets where it has physical stores or offices.

States where Amazon has cut ties with affiliates:

California
Illinois
North Carolina
Colorado

States at risk of being cut off by Amazon due to possible legislation:
Nevada
New Mexico
Missouri
Arkansas (Law Passed)
South Carolina
South Dakota
Minnesota
Vermont
Massachusetts
Rhode Island(Law Passed)
Connecticut (Law Passed)

Amazon has continued to use the 1992 Supreme Court Ruling of (Quill Corporation v. North Dakota) that prohibits a state from forcing a business to collect sales tax unless it has physical stores in the state.

However, because of the recession, and the shortfall many state budgets now have, the state governments are trying to get around these restrictions by passing laws that expand the definition of physical presence.
The states target are e-commerce sites that work with affiliates.

In essence if an affiliate is within the said state that has these new expanded laws of physical presence, they (Amazon) must pay the sales tax because of the sale that was created by the affiliate living within that said state.

As the states attempt to find ways to collect revenue, a new situation could be looming. Could it be federal law or the constitutionality of the state laws regarding this matter.

This article is from myaffiliateplace.blogspot.com

Amazon Ends Affiliate Relationship in Illinois

Amazon Ends Affiliate Relationship in Illinois

Well, I guess you can say Amazon is good to it’s word when they say that they would end their affiliate relationship with affiliate marketers if Illinois put through the Internet sales tax.

As I stated in an earlier post the Illinois state government wanted to start collecting sales taxes from affiliates in the state, for all sales made by Illinois residents. How many affiliates will this affect in Illinois? 9000.

So far, Amazon has closed its affiliate program in: Colorado, North Carolina, Rhode Island, and now Illinois. Will other states look to the Internet to close their deficits? They are trying.

California was considering the same such move. However, Amazon threatened to choke off their affiliate marketing program in California if  (10,000 affiliates would be affected in that state) state lawmakers proceeded with  legislation that would require the Internet retailer to collect sales tax from their state residents.

California, not deterred, decided to have a study done, to see the revenue affects it would have on their state. According to a study by the State Board of Equalization Staff Legislative Bill Analysis in CA it showed that if Amazon shut it’s affiliate program down,  it would affect the state adversely. It estimated that Amazon currently comprises roughly 50 percent of the Internet sales of large firms who have no
residence in California.

If Amazon and Overstock stayed on board and other people continued to sell on Ebay, the sales tax that California would collect would be:

$152 million in 2011-12
$317 million in 2012-13

Since Amazon stated that they would not continue their affiliate program, the revenue would shrink to:

$114 million in 2011-12
$234 million in 2012-13.

Mind you, that is just Amazon. If other online businesses followed the same path as Amazon, the revenue would be further diminished. In addition, the termination of the program would further lower revenues because it would adversely affect employment, which would translate into less revenue from personal income taxes and corporation taxes.

I wonder if the other states did a comparison study?

In addition, Texas slapped a  $269 million bill for uncollected sales taxes at Amazon distribution center in Texas. Amazon threatened to close the doors on the distribution center if they proceeded with the billing.

Why is Amazon proceeding in this manner? They feel the law is unconstitutional and there is a U.S. Supreme Court ruling in 1992 that is also relevant. The ruling stated that retailers can’t be forced to collect sales tax on out-of-state shipments unless they have offices in those states.

Eventually, this issue will have to be addressed by Congress. Don’t you think.

This article is from myaffiliateplace.blogspot.com