Posted on 03/04/2011 3:30:36 PM PST by SmithL
Is Amazon.com getting nervous?
How else to explain its intemperate letter threatening to put more than 10,000 Californians out of work should the state even think about enforcing the collection of unpaid sales taxes on Amazon and other Internet retailers?
"I'm not surprised by what Amazon's done," said Board of Equalization Chairwoman Betty Yee. "I think it's their way of getting California to back off."
Support has been growing for legislation, backed by Yee, that would clear the way to collect an estimated $1.145 billion in unpaid taxes that out-of-state online merchants such as Amazon, and catalog houses such L.L. Bean, have thus far successfully evaded.
"If any of these new tax collection schemes were adopted, Amazon would be compelled to end its advertising relationships with well over 10,000 California-based participants in the Amazon 'Associates Program,' " the company wrote to a receptive Republican tax board member, George Runner.
The "associates," or affiliates, get a cut of every sale Amazon makes to customers via a click-through from affiliates' websites.
"Amazon has made it clear to me that the checks they send Californians will be cut off overnight if pending legislation aimed at regulating their operations becomes law," said Runner, one of the elected board's five members.
(Excerpt) Read more at sfgate.com ...
I’m kinda not on Amazon’s side here. They are coming off as imperious as in “only suckers pay taxes”
only suckers do pay taxes.
Amazon has done this to Colorado and has threatened to do this to Illinois as well.
They are well within their rights to, in my opinion. If those are the rules, they have to right not to do business in the State.
Otherwise, it’s slavery.
Maybe if California did not have confiscatory taxes, the residents of CA would not be looking so hard to avoid them. With the lowest sales tax rate in CA being 8.75%, and some counties running 10%, who would not want to avoid the sales tax, especially considering how high the state income tax is. It doesn’t take a great deal of income before one finds oneself in the 11% income tax bracket.
That sounds like something out of Atlas Shrugged.
the problem in most states has nothing to do with a shortage of taxes...
Agree with you, they are not in the business of taxing people in california. Thats what drives lots of business over seas. Tax the company until its cheaper to build or buy overseas and pay shipping and tariffs than produce in this country....greedy basturds in government think they own everyones money....
I am completely on the side of Amazon here.
How does California collecting taxes from a person buying a book over the Internet make sense?
What did California do to deserve that income?
Kalifornia needs to do the math, income tax from 10,000 workers or sales tax on purchases. Amazon will not back down. These doofus legislators in the golden state are running out of folks to tax and businesses to run off. Idiots. I suspect that a few more folks will run out on their property taxes too.
So I guess that freepers WANT Internet taxes for the greedy states that are illegal to begin with.FR has become like a ship with no course/agenda lately.
Forget California. Amazon has pulled this anti-taxation stunt elsewhere
Amazon has followed through in Colorado, North Carolina, and Rhode Island and stopped affiliate programs there.
I don't think Amazon has the gonads to push it that far in California with its huge number of Amazon affiliates
"Amazon is no stranger to battles with states over collection of Internet sales taxes, and has dropped its affiliates in Colorado, North Carolina, and Rhode Island over similar tax bills."
This is the kicker line. CA is assuming that every commission paid by Amazon to a CA resident is based solely on purchases made by CA residents. CA has no grounds for collecting sales tax on merchandise not shipped to CA that I am aware of.
I wish more companies had the balls that amazon does. What some of the states have been trying to claim is that amazon’s “associates”, web sites that get a tiny cut for driving traffic to amazon, represent a “physical presence” in that state, and therefore amazon must tax ALL of their sales in that state. This activity is really just a form of advertising, but states are trying to pass laws making this advertising equivalent to “physical presence”.
Too date, several states have tried to pull this. In every case, amazon sent them a letter stating that if they passed a law to that effect, then amazon would simply rid themselves of all associates in that state. In every case amazon has followed through with that strategy, and in very case the state didn’t collect a penny from amazon, but did put several thousands of small businesses out of work.
No doubt California will pull the same stunt, thereby knowingly killing 10,000 small businesses.
“I don’t think Amazon has the gonads to push it that far in California”
How hard is this to understand? Confiscatory taxation kills businesses. Cause and effect. CA wants to raise taxes on Amazon. Business retaliates by relocating in a low tax state.
Amazon can make WAY more money by dropping CA altogether than putting up with their nonsense.
That's right... "In the name of the general welfare, to protect the people's security, to achieve full equality and total stability..."
You hit the nail on the head!Great post!
Art 1, Sec 9:
No Tax or Duty shall be laid on Articles exported from any State.
Pretty plain statement, I would say.
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