Amazon Shutting Down Colorado-Based Associates Over Sales Tax Issue
from the tax-avoidance dept
You may remember last summer that Amazon shut down its affiliate programs in North Carolina, Hawaii and Rhode Island in response to new laws being put in place in those states, which would effectively make any Amazon affiliate an "official" representative of the company in that state, thus requiring that Amazon start collecting sales tax. This followed a similar mess in New York the year before. This is really short-sighted on the part of the states, pushing for additional tax revenue (of course). But it stretches the definition of what it means to have a physical presence in a state to the point where someone who is running an ad for you (all that an affiliate really is) is treated as an employee.It appears that some states still haven't gotten the message. Michael Long sends over the email he received from Amazon, alerting him that Colorado has now passed a similar law, meaning that no one in Colorado can be an Amazon affiliate any more. Though Amazon is being a bit disingenuous in saying "no other state has similar rules," when other states have, indeed, passed similar rules, and many others are considering similar rules as well.
Of course, this strategy does risk backfiring on Amazon, as it's effectively using its affiliates as pawns in trying to get the state government to repeal this law. The alternative, of course, is that the affiliates just jump ship to another provider.
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Filed Under: affiliates, colorado, taxes
Companies: amazon
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"jump ship"?
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And thats why....
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Re: And thats why....
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Don't they compare notes
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Confused
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I didn't think it would work either.
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Re: Re:
Lauren
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A little sloppy this time Mike...
- Colorado is NOT requiring Amazon to collect sales tax due to an affiliate presence or "nexus". The new requirement is that Amazon must INFORM THE CUSTOMER of the tax they should be paying. I believe the intent is to have the customers pay the tax as a "use tax" with their income tax filing.
- Additionally, for online merchants making more than $100,000, Colorado can request data on annual purchases broken out by individual residents, but not individual transactions.
- Any association between Colorado associates and sales tax collection was actually REMOVED from the bill
The way I see it, Amazon is doing this as a political statement and not as a way to side-step new tax collection requirements. They will still have to code sales tax calculations for Colorado whether they have affiliates or not. They just don't have to collect said tax.... yet.
Additionally, while you feel their "no other state" comment is "disingenuous", I believe it to be true. Is there another state that requires online merchants to calculate but not collect sales tax as well as track total sales by individual per year?
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About time...
Freedom
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Amazon is Deliberately Killing Off the Affiliate Programs.
As for online merchants, a serious online merchant is willing to _move_ to an advantageous state. Moving to a more favorable tax regime is less risky than moving to take up a new job (which may turn out to be an optical illusion), or to enroll in a school. Again, I doubt that Amazon is really unhappy about weeding out the amateurs, the ones who are unwilling to install suitable automation to get their processing costs down.
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YOU DOGZ IS DUMB
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States in Trouble
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the trend is headed - but which way
Rather than fighting this the merchants should figure out how to best support it. If Amazon said "OK, we'll do this, but we want Colorado to make the process dead easy." then that would be a real win for all internet retailers.
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Re: the trend is headed - but which way
The answer is not to ask the public to bend over everytime politicians want to impose a new tax, but to ask politicians not to spend more every year.
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Re: Re: the trend is headed - but which way
That's not entirely true - the item is still driven from somewhere to your house. But maybe the shipping company is paying taxes to cover that.
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Re: Re: Re: the trend is headed - but which way
Would you rather have one truck on the road making least-distance-travelled optimized deliveries to 50 people, or have those 50 different people all climbing into their SUVs and heading off to 50 different destinations to buy something?
The later has significantly more impact, wouldn't you agree?
Sales tax also helps cover the services (roads, sewage, police, fire, etc.) provided to all of those local stores and businesses.
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Amazon should
You can be against sales taxes, that is fine, but as to who has to collect them, it is a no brainer. The tax has to be collected by every retailer in the world who sells in the US.
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Tax Until There is Nothing Left
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Affiliates
I guess there won't be any Virginia affiliates for much longer, either.
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It seems politicians create more problems, than they solve.
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The CO law is different
The law requires the business to notify customers in CO that they owe tax to the state, send them and annual summary and, if the company does over $100K in a year, submit the buyer's information to the state. I suppose that we could call that the "rat on" provision.
What I am at a loss to understand is, what gives Colorado the right to pass legislation that that specifies what a business with no business nexus in the state must do? How are they going to enforce it? Isn't this a little like Italy convicting Google execs?
Then there is the privacy concern. I am not sure that I am comfortable with a business sending a list, or even a summary, of what I purchased from them to the state government or anyone else for that matter. How long before we need to submit a SSN to buy a book?
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Re: Tax and other annoyances
She sent out an email. It might be synced up with the physical shipments, so you'll get an email first about your shipment, then a few days later an email with the download link.
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The strategy taken by the states led by NY was to create a business nexus based on the existence of the affiliate. In CO the legislation doesn't involve the affiliates but places requirements on online businesses selling into the state.
The law requires the business to notify customers in CO that they owe tax to the state, send them and annual summary and, if the company does over $100K in a year, submit the buyer's information to the state. I suppose that we could call that the "rat on" provision.
What I am at a loss to understand is, what gives Colorado the right to pass legislation that that specifies what a business with no business nexus in the state must do? How are they going to enforce it? Isn't this a little like Italy convicting Google execs?
Then there is the privacy concern. I am not sure that I am comfortable with a business sending a list, or even a summary, of what I purchased from them to the state government or anyone else for that matter. How long before we need to submit a SSN to buy a book?
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