ergophobe - 11:30 pm on Mar 9, 2010 (gmt 0)

During a recession, with over 10% real unemployment in this country, states are forcing small businesses OUT OF BUSINESS by creating new taxes?

The stupid part is that they use the the physical presence of affiliates as the criterion for deciding whether a merchant has to pay taxes. And really, that wouldn't be a problem if the tax had to do with the residence of the consumer.

The not so stupid part is the short-term math.
$1000 item.

As an Amazon affiliate, I get about $50. Once I take away my deductions and writeoffs, I'll pay about $15 in income tax. Maybe less if I have a bad year or a major capital writeoff or who knows what.

Now if they charge sales tax on that item, in my county that means $87.50.

So, the state is theoretically up $72.50.

Where the states are screwing up, is creating laws that allow merchants to sidestep them simply by dropping affiliates in that state. In which case, the state loses both the $87.50 and the $15, which is what's happening now.