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Amazon Terminates Illinois Affiliates

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Re: Amazon Terminates Illinois Affiliates

#71

Post by Vivtek »

iwwr wrote: post #55
kgermino wrote: post #17

Earlier quoted context omitted.

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.

In all honesty, the pittance is just a token, an indication that everybody is on the same page. The real compensation is that there are lots of sub rosa benefits to the politician during their time in the statehouse or Congress or what have you, and as soon as he or she has had enough of public service, there's always going to be an extremely well-paid consultancy waiting. You have to look at the overall career path.

Re: Amazon Terminates Illinois Affiliates

#72

Post by chopsueyar »

raganwald wrote: post #5

If an affiliate in Illinois constitutes a presence for Amazon in Illinois, what happens when Amazon Adsense Ads appear on a web site hosted out of Illinois but run by a blogger who is a resident of Illinois? By my reckoning, Amazon is paying Google who in turn pay a resident of Illinois. How is this different from an Amazon affiliate?

There was a HN post about how AdSense affiliates in Philidelphia had to pay a large filing fee for being considered a business in the city.

http://news.ycombinator.com/item?id=1624250

Re: Amazon Terminates Illinois Affiliates

#73

Post by CWuestefeld »

tsycho wrote: post #64
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…

Well, to be fair to the physical retailers, all online retailers should pay sales tax since you are giving them a 10% pricing advantage otherwise. Amazon (and others) are exploiting a tax loophole, and the state governments are trying to stop that. They should, however, make such rules for all retailers, and not target Amazon specifically (I am not sure if they are doing so, but the parent comment makes it seem like…

You're making a big assumption, that it's Amazon that's exploiting a loophole, rather than the the State being exploitative. You're assuming that the State has some inherent right to grab whatever money it can get its hands on. Can you explain why a retailer that's not in the state ought to be on the hook for these taxes?

In other words, rather than simply assuming that states have essentially unlimited authority to tax (subject to their courts and legislatures), is there a point where the authority to tax ends? At one extreme, I would submit that they can't tax me, sitting here in NJ. (However, I once had the State of Connecticut contact me, forcing me to prove to them that I didn't need to pay them income tax, so it appears to me that States do believe that their power is unlimited). On the other hand, few would argue that, say, a local shop ought to be exempt. Where do we draw the line?

Re: Amazon Terminates Illinois Affiliates

#74

Post by Vivtek »

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…

When an Illinois resident buys something from Amazon from the comfort of their own home in Illinois, they are not importing something from another state.

Yes, legally they are. That is exactly what they're doing. We don't call it imports simply because we have a federal law that prohibits any non-federal regulation of interstate trade (i.e., imports) and there is no such law beyond the boundaries of the United States, but there's a reason we're called the United States. In an important sense, we're 50 different countries that have delegated most of their law to a federation.

Re: Amazon Terminates Illinois Affiliates

#76

Post by Encosia »

A1kmm wrote: post #54
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, b…

The affiliate program must increase the number of sales that Amazon makes or it wouldn't still exist. Of those additional sales generated by IL affiliates, some portion of them would have been shipped to IL - probably a disproportionate amount due to most IL-local sites being owned/maintained by IL residents.

The local ecosystem that Amazon indirectly supports is difficult to quantify, but I think you're dismissing it too quickly. Everything from the affiliates' state income tax to the tax on the fuel used to deliver the boxes needs to be considered.

We don't tax grocery stores for putting the milk man out of business, computers for eliminating type writer repairmen, nor email for the imminent demise of the USPS. Why Amazon?

Re: Amazon Terminates Illinois Affiliates

#77

Post by Vivtek »

storborg wrote: post #33
erikpukinskis wrote: post #31

Earlier quoted context omitted.

They're not always in a different state. If you live in California, you pay sales tax on online purchases pretty much always.

That's because California has tax-hungry laws concerning what defines a "nexus" (a business's presence in the state). It's difficult for many companies to avoid creating a California presence, so they're stuck collecting California sales tax as if they were based there.

Doesn't every state have similar laws? Indiana does - yet I don't normally pay sales tax online, because most of the companies aren't based in Indiana, whereas online companies really do tend to be in California.

Re: Amazon Terminates Illinois Affiliates

#78

Post by CWuestefeld »

shalmanese wrote: post #50
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…

5. Suppose you get so many orders from France that you figure it makes more sense logistically to bulk ship items to a central location in France and then drop ship from there with the French office merely acting as a forwarding location. Surely this is roughly equivalent to the previous scenario. 6. Since demand from France is fairly predictable, you figure you can actually ship based on anticipated sales, shortenin…

Congratulations, you've invented the slippery slope.

Re: Amazon Terminates Illinois Affiliates

#79

Post by ylem »

I think part of the nightmare for an internet company is dealing with the myriad of tax laws--not at the state level, but at the county/city level. Sometimes some cities for example declare tax holidays on certain goods. How do you deal with that regularly? Perhaps a company of Amazon's size could, but suppose you are just a small company? If you are local, then you're aware of such things, if you're not...

Re: Amazon Terminates Illinois Affiliates

#80

Post by baddox »

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…

By that logic, it's certainly fair for your family to pay sales tax if you live in, say, Illinois. But isn't it also reasonable to leave one state for another because of sales tax?
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