Forum Moderators: skibum
FarmBoy
News coverage here [news-record.com].
I don't think they thought this through very well. Most of the affiliates are selling used books, low prices with razor thin margins.
I don't know where they get the idea of how much money they can raise. It seems a fantasy.
And when all the money sites move off-shore they will try to figure out a way to tax the letter "a" or "y" or "z" in email messages...
Mark my words. :)
they will try to figure out a way to tax the letter "a" or "y" or "z" in email messages
Is this the state where the governor wanted to turn down the federal stimulus money they were offered?
Nope, that was South Carolina. North Carolina voted Democrat this year, hence taxing the Internet.
Or something to that effect
No affiliates from that state, no legal presence, and Amazon doesnt have to pay taxes in that state.
of course, WA also has no income tax.
And also on this deal, it is probably not just Amazon doing this. It is just that Amazon is the biggest one doing this.
The law has not caught up with the internet and the nature of the digital age yet.
Maybe I'm dumb, but no money changed hands in NC.
How is a nationally targeted website maintained by an NC resident different than a magazine sold with an ad that generates an NC sale?
It isn't like NC residents still won't make those same purchases through Amazon or its affiliates who happen to be in other states.
I see opportunity for someone to set up a site/blog blasting the latest news on the these developments. Perhaps helping small affiliates navigate the LLC process in a "good" US state and charging a reasonable fee.
Wish I had expertise in US taxation!
Israel
There is still time to fight!
What if you buy a magazine in NC and respond to an advert. Does the company selling the goods now have a legal presence in NC? What if the magazine publisher was based in NC?
Is the internet any different from a magazine? Should it be any different? Ok the commission per sale model is slightly different but there's nothing stopping a newspaper or magazine running an offer and making a commission per sale per se?
Perhaps if Amazon switched to a CPC model instead of comission this would no longer align it with these tax laws. The CPC can then be based on the affiliates performance.
They have so far lost their lawsuits in New York. All their affiliates in New York are already gone.
Not true. Amazon Associates in NY are still in the Amazon program. I believe that Overstock dumped their NY affiliates, but Amazon did not.
These laws are ultimately going to be dealt with by the Supreme Court. Real problems with the commerce clause, IMO.
I've been pondering whether to close my site down, and I think this is the final straw.
Thanks for the warning, A.
They sent out a warning previously, back when this thread was started.
I'm actually more frustrated with Amazon than with the state.
I'm more frustrated the state of NC can't control its spending and live within its means the same way a majority of the individual citizens within the state are doing with their personal budgets. The constant spending creates the constant need for more revenue - thus this legislation.
NC is trying to recoup the sales taxes they're losing on purchases made via the internet vs. bricks and mortar stores, and I can't say I fault them for that.
They are not losing unless the item purchased at Amazon would have been purchased at a local brick & mortar store anyway. It's probably impossible to accurately measure that across the populace, but the majority of things I have purchased from Amazon I wouldn't have purchased from a local brick & mortar store.
FarmBoy
the majority of things I have purchased from Amazon I wouldn't have purchased from a local brick & mortar store.
So if there was no such thing as online shopping, you just wouldn't have bought them at all? They were luxury items, impulse buys? I think that makes you unusual. Most people buy things they need online, whether at Amazon or some other company. In some places, that has had a real impact on bricks and mortar stores--I live in New York, and there have been several specialty bookstores closed due not to competition from Barnes and Noble but to loss of sales from Amazon. And that's just one example.
If current trends continue, it's possible to imagine companies like Amazon locating in friendly locations (like banks do in Delaware) and gradually draining sales tax revenues from other states while also killing off B&M businesses.
The issue won't be solved by state-by-state action, though. I understand there is legislation in Congress that would create a framework for dealing with this--which would probably benefit us, because it would remove the incentive for companies like Amazon to stop working in individual states.
1. Those monthly checks to NC Associates constitute taxable income. Now NC has lost that revenue.
2. In Raleigh, there is an AP history and government teacher who is a somewhat noted blogger. She notes on her site that her commission checks from Amazon are used to purchase related materials for her students/classroom. Now, that's gone unless she pays out of her pocket, the students pay direct or she gets tax dollars to make the purchases.
It's not easy to measure the total gain/consequences of something like this.
FarmBoy
FarmBoy
[edited by: farmboy at 3:06 pm (utc) on June 26, 2009]
So if there was no such thing as online shopping, you just wouldn't have bought them at all? They were luxury items, impulse buys? I think that makes you unusual.
Maybe. Maybe not.
Most of what I buy from Amazon is books - usually How-To or Reference books that I've read about in an article, blog, etc.
Where I live, there is only one brick & mortar bookstore with any degree of selection of new books - a small Waldenbook store in a small shopping mall about a 20-25 minute drive away. They seldom stock the books I purchase, so I have to call or go there and order the book, wait for them to call and let me know it has arrived, then drive there to get the book.
With Amazon, I read a few reviews of the book from the comfort of my home then do the one-click ordering thing and a few days later the mailman leaves it at my door.
Faced with those two options, if not for online shopping, I would purchase fewer books.
I live in New York, and there have been several specialty bookstores closed due not to competition from Barnes and Noble but to loss of sales from Amazon.
That's part of the dynamic marketplace in which we live. A hundred years ago, upwards of 95% of Americans has to work in food production/agriculture. Due to technological advances, now that number is a distinct minority.
After Henry Ford came along, a number of horse buggy manfacturers went out of business.
If current trends continue, it's possible to imagine companies like Amazon locating in friendly locations (like banks do in Delaware) and gradually draining sales tax revenues...
You and I view revenues to government bodies in a different manner. I don't view activities by citizens as opportunities for government bodies to generate income for collective uses. I view government revenue as needed to pay for the necessary services associated with the activity.
Suppose 1,000 people in a NC city today decided to purchase a copy of the Michael Jackson CD "Thriller". If they did it online via Amazon, they would make the purchase from their home computer and the USPS delivery person would deliver it a few days later as part of his regularly scheduled route. That creates relatively little demand for government services and need for government revenue.
Now suppose those 1,000 people decide to get in their vehicles and drive to a B&M store to make the purchase. That increases the wear & tear on government infrastructure, creating the need for government revenue. The presence of the B&M store increases the need for government services.
Plus, that's 1,000 more vehicle trips belching exhaust that so many people seem concerned about these days.
FarmBoy
Those monthly checks to NC Associates constitute taxable income. Now NC has lost that revenue.
Plus, that's 1,000 more vehicle trips belching exhaust that so many people seem concerned about these days.
It's also that many more potential vehicle accidents- and those really DO use up a lot of government resources! Especially if one of those vehicle trips results in a death.
Oh, and guess what politicians- that death means even FEWER tax dollars coming into your state in the future because dead people don't generate revenue or buy things!
