July 1, 2009
Amazon vs the taxman round three
Update. Now Hawaii is in play as well. Looks like there is a whole series of States wanting to play this game. Does Amazon have the guts to keep cutting? I hope they do. –
Amazon (NSDQ: AMZN) has informed its marketing affiliates in Hawaii and Rhode Island that their business relationship with the online firm has been ended. Amazon has been dropping its affiliates in states that approve the collection of sales taxes for online transactions.
It is a massive game of chicken. The only people getting hurt are the citizens affiliates in these States. Thanks Legislators. You are screwing your own citizens and not gathering any taxes.
Filed under ecommerce by Dr. Dog
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Comments on Amazon vs the taxman round three »
Big media is starting to pick up on this, but they’re getting it wrong too. It’s important to understand that the proposed sales taxes are based on the affiliate’s location, which is probably not the same as the location of the buyer or seller. There seems to be no will to make that one very important distinction.
Well good.Now if I were an enterprising governor I would propose a change in my State’s tax laws that would favor web sites and affiliate deals as nontaxable. Then all the States taxing affiliates will see their revenues head for that State. The Affiliate only has to do a deal with a web provider in that State and set up banking there too or us PayPal exclusively. Fact the perfect trifecta would be favorable tax treatment, favorable hosting environment, really low rates on foreign incorporation fees all treated as a package.
No paper trail of assets in the tax State. Be nearly impossible for them to know to collect. Use the account to pay business only bills and ship from on purchases the State would be hard pressed to make a case.
Are you listening Governor Perry or soon to be Governor Hutchison?