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Amazon Terminates Illinois Affiliates

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Re: Amazon Terminates Illinois Affiliates

#51

Post by [deleted] »

thaumaturgy wrote: post #34
btilly wrote: post #26

Earlier quoted context omitted.

Here is an explanation. Residents of Illinois owe sales tax on their purchases. The state knows that people won't choose to pay this, so the state makes merchants collect the tax. If the merchants are based in the state, the courts say the state can do this. If the merchants are not based in the state, then the courts have ruled this to be interstate commerce, which is something that only the federal government has p…

Amazon sells Item X for $19.99. An Illinois retailer sells the same Item X, also for $19.99. Your claim is that the buyer will purchase from Amazon because there is no sales tax: Amazon: $19.99 Retailer: $21.24 Except, the item must be shipped from Amazon to the customer. If customer pays shipping, then: Amazon: $24.99 Retailer: $21.24 If Amazon pays the shipping, then the shipping costs must be deducted from their p…

[deleted]

Re: Amazon Terminates Illinois Affiliates

#52

Post by cgrand-net »

bambax wrote: post #46
repiret wrote: post #44

Earlier quoted context omitted.

I disagree. Consider the following sequence of examples: 1. I have a store in Oregon, a US state with no sales tax. You live in France, and while on vacation here, you buy a trinket, and carry it home in your luggage. Clearly, I don't have to pay French sales tax. You might owe some import duty when you bring it home. 2. Suppose instead that the trinket is big and heavy, so rather than putting it in your luggage, you…

The vendor never has to "pay" any sales tax: they collect it (my initial wording was wrong). It's the buyer who has to pay sales tax. Being French, if I buy anything anywhere in the world, I owe the French government 20% of the amount of that purchase; if I'm able to hide my purchase in my suitcase, then I'm evading taxes, but I'm certainly never exempt. The crux of the matter is whether Amazon is an "out of state se…

> if I buy anything anywhere in the world, I owe the French government 20% of the amount of that purchase; if I'm able to hide my purchase in my suitcase, then I'm evading taxes, but I'm certainly never exempt.

You are not evading the system, there is an exception:

http://www.douane.gouv.fr/page.asp?id=533

Sont exonérés de la TVA [...] les biens contenus dans les bagages personnels des voyageurs en provenance de pays extérieurs à l’Union européenne.

(Goods contained in personal luggages of travelers coming from a non-EU country are exempted from VAT.)

Re: Amazon Terminates Illinois Affiliates

#53

Post by A1kmm »

burgerbrain wrote: post #24
eykanal wrote: post #11

Earlier quoted context omitted.

The message being sent is simple; Amazon is receiving an unfair competitive advantage by not paying taxes (all their prices can be lower), and the legislature is trying to figure out some way they can "force" Amazon to have a local presence through people like you. Amazon, being the 800-lb gorilla they are, just said the equivalent of, "I'm taking my ball and going home." They did this because you were the "arm" of A…

What these government numbskulls don't seem to understand is that what Amazon is doing isn't fundamentally any different from what Sears was doing over a century ago with their mail-order catalog. Amazon it's receiving an "unfair" anything, they are operating well within the law and long established acceptable business practices. Politicians are just being greedy, plain and simple.

Operating within the law doesn't imply something is fair - especially when we are talking about a law change.

I think that the law should fairly target mail-order companies as well as Internet-order companies.

Of course, levying taxes based on where the buyer lives makes things difficult for the seller in terms of compliance costs; I think the best solution would be for the federal government (or even organisations like the WTO) to request that jurisdictions provide a register of who taxes should be paid to, and enough information to automate tax payments, by geographic region. The private sector could do this, but a government or International Organisation backed solution might see more participation in the scheme by tax jurisdictions.

Re: Amazon Terminates Illinois Affiliates

#54

Post by A1kmm »

Encosia wrote: post #23

Ethics aside, this seems extremely shortsighted on the part of the legislature. Amazon might compete strongly with local big boxes ("Main Street", my foot), but how much shipping business (and resulting jobs and tax revenue) is ultimately created by Amazon's sales in IL?

If the shipping is paid for by Amazon out-of-state, I'd be surprised if they see any sales tax from it.

Amazon hasn't stopped shipping to Illinois - they have simply stopped allowing affiliates in Illinois, so the decision is unlikely to change the amount of shipping. If they did manage to force Amazon to collect 10% sales tax, people might spend at most 10% less, because collecting sales taxes reduces their means, but all of that would be captured by the state immediately, rather than more taxation through indirect mechanisms like increasing the number of shipping employees, where they would capture far less of that 10%.

If they did force Amazon to collect the tax, they might also cause some people to buy at retail stores instead of online, but shipping to homes is probably more efficient in terms of labour than shipping to stores and having salespeople employed to sell them - so more tax capture there. People might instead buy from online stores in Illinois, now they no longer have a tax advantage - that would also mean more tax capture because more of the supply chain is in Illinois.

All in all, of all the possible outcomes, it seems very unlikely that tax revenue will be decreased because of this. Amazon is trying to bully the state of Illinois because it is one of many states; if other states follow suit, Amazon will almost certainly have to back down or give up on having affiliates altogether.

Re: Amazon Terminates Illinois Affiliates

#55

Post by iwwr »

kgermino wrote: post #17
glesica wrote: post #15

Earlier quoted context omitted.

Won't work, Wal-Mart probably already bought everyone in Springfield.

Hey man no politician in Illinois has ever been bought off. I'm sure this law passed strictly because the representatives in Springfield felt it was the best thing for the state, and definitely not because Walmart made a $25,000 campaign contribution.

It's sad that pittances like these ($25K) influence (direct?) decisions that then divert hundreds of millions or billions.

Re: Amazon Terminates Illinois Affiliates

#56

Post by billpg »

true_religion wrote: post #45
ars wrote: post #29

It's time for the Congress to get involved here. Pass a law that each state can specify a single tax rate for any shipments into that state. Then all retailers everywhere would have to collect that tax and pass it on to the state. If the state wants to distribute the money locally let them handle it themself - the retailer sends a summary with the city names, and total amount, and the state can figure out how to dist…

> Pass a law that each state can specify a single tax rate for any shipments into that state. Then all retailers everywhere would have to collect that tax and pass it on to the state. At that point states would be able to set higher rates for shipping than for in-state sales tax. That would create a protectionist economy for their in-state businesses which is precisely what the founders feared would occur if you allo…

I imagine the federal sales tax would be set to the same level as the state sales tax. States couldn't change one without changing the other.

(I've not really thought this through. The above is just a random thought. Be nice.)

Re: Amazon Terminates Illinois Affiliates

#57

Post by dpatru »

shareme wrote: post #48
wheels wrote: post #38

Earlier quoted context omitted.

Amazon's competitors in France also pay tax. That's the difference. The issue here is that the law is such that out of state vendors don't have to pay tax; Illinois is just trying to jigger a way to make Amazon have to pay anyway, because Amazon sells lots of stuff and they'd like the tax revenue. But that effectively gives their competitors a 10% pricing advantage, not to mention making accounting much more expensiv…

No, read the damn paper..Illinois is bankrupt they are asking for sales taxes to get them out of debt..

Illinois should cut its spending.

Re: Amazon Terminates Illinois Affiliates

#58

Post by MediaBehavior »

DianeKennedyCPA wrote: post #12

The so-called 'Amazon law' is in 4 states now: New York, Rhode Island, North Carolina and now Illinois. There are a number of states considering it, though, including California.

I'm pretty sure you can add Colorado: This being the reason I am not permitted by Amazon to become an affiliate.

Re: Amazon Terminates Illinois Affiliates

#59

Post by yummyfajitas »

bambax wrote: post #27

Amazon in France pays sales tax, just like everybody. Sales tax in France is 20% (19,6% to be precise). Is that a problem for Amazon in France? It doesn't seem so. I can't find a justification why online retailers should be exempt from sales tax; the reason invoked by Amazon US is that sales tax are a local tax, at the state level, and they happen to be located in a different state (they're always in a different stat…

The issue is that Illinois has no right to issue laws governing the actions of people not located in Illinois.

Illinois is free to demand that people who are located in Illinois pay sales taxes on their out of state purchases. If it has probable cause for believing one of it's citizens is evading taxes, it can even file a subpoena with Amazon for sales records.

Re: Amazon Terminates Illinois Affiliates

#60

Post by yummyfajitas »

bambax wrote: post #41
thematt wrote: post #32

Earlier quoted context omitted.

It's not that the purchase is exempt from tax, it's that Amazon isn't responsible for collecting it. The onus falls on the consumer to pay the sales tax directly to the state. Nobody does though, which is why they want Amazon to collect it. If you're looking for justification, refer to the Supreme Court ruling that established it, which said that requiring these companies to comply with the varied sales tax rules and…

Why don't they fight in court then? Cutting their affiliates lose looks really low; they should stand for them instead.

They probably will. They already have in other states.

http://techcrunch.com/2009/01/13/new-york-court-dismisses-am...

I'm not a lawyer, but I believe they cannot file a lawsuit until they are actually harmed (i.e., after the law takes effect).

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