Amazon will end affiliate program in California if new law passes

Post by [deleted] » Wed, Jun 29, 2011, 9:16 PM UTC

tomp wrote: post #55

btilly wrote: post #11

Some important background on this. At issue here is sales tax. By state law, the tax is owed by the citizens to the state no matter where they make the purchase. To make enforcement easier, the tax is supposed to be collected by businesses. In theory the tax is owed regardless, but as a practical matter when businesses do not collect the tax, customers don't volunteer the information and the state loses revenue. This…

So... if I understand correctly, if I am a resident of California and I buy books from Amazon, I pay no sales tax (isn't that the same as VAT)? Does this mean that Amazon books in Washington are more expensive (because I Amazon must collect the taxes, because the state can force it to, because it has a physical presence there)?

Post by modoc » Wed, Jun 29, 2011, 9:18 PM UTC

jbooth wrote: post #56

InclinedPlane wrote: post #27

Earlier quoted context omitted.

Sales tax tends to be 5-10%, affiliate kickbacks tend to be less than that, which means that the increased revenue from affiliate links is in the same ballpark. It would be bad enough if these laws forced amazon to pay sales tax on purchases where the affiliate lived in the same state as the purchaser. Instead these laws force amazon to pay sales tax on all sales where the purchaser lives in a state where there is a…

Amazon (or more accurately, the purchaser) should be paying all sales taxes in the state where the purchaser lives, period. Seems cut and dried to me. If the corner store has to run sales tax, Amazon should too. I don't see why a "[adjective] business decision in the face of [adjective] and [adjective] legislation" is in any way different from "skirt paying sales tax".

Post by tedunangst » Wed, Jun 29, 2011, 9:20 PM UTC

scarmig wrote: post #39

gte910h wrote: post #14

Earlier quoted context omitted.

Or do the obscenely complex logic for each of the tens of thousands of jurisdictions each year required to calculate sales tax.

And yet somehow companies like WalMart and Target manage this terrific feat. It'd be better if there were a unified system of national sales tax. But for a company Amazon's size, it's a laughable idea that it's somehow impossible to do this magnificent feat of implementing a lookup table.* The hard part is keeping things up to date, but a good faith effort to do the previous would get Amazon pretty far. *I worked for…

Post by btilly » Wed, Jun 29, 2011, 9:22 PM UTC

throw_away wrote: post #57

jbooth wrote: post #52

Earlier quoted context omitted.

I see your point that this could be a problem, but it's also a problem that brick-and-mortar shops have to pay tax while Amazon doesn't, no? Equal protection (or competitiveness) goes both ways.

Neither have to pay the tax, it's just a question of who the state can compel to collect the tax on behalf of customers. The real tax evaders here are the customers, who are required to pay a use tax for out of state purchases. Of course, clamping down on this is political suicide so it doesn't happen. I think the classical argument as to why the brick and mortars have to collect is because they actually see a benefi…

Post by [deleted] » Wed, Jun 29, 2011, 9:24 PM UTC

btilly wrote: post #40

gte910h wrote: post #14

Earlier quoted context omitted.

Or do the obscenely complex logic for each of the tens of thousands of jurisdictions each year required to calculate sales tax.

Not true! Amazon already has all of that obscenely complex logic coded up! Amazon allows third party vendors to sell through Amazon. Amazon knows for each vendor of what states they are resident in, and properly collects sales tax in that company's behalf where that is required.