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INTERNET TAXES NOT google, not SEO, California

...and not sure where to headline this...

     
9:42 pm on Jul 26, 2011 (gmt 0)

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...because California is making a land grab which will affect all of us.

REPEAT this is not a GOOGLE thing, but one which will giggle all of us...

A big tax battle is erupting in California. The immediate numbers involved are not big—about $200 million—but the principle is huge, and the outcome will have an enormous impact on our economy. The battle is over applying sales taxes to products sold on the Internet. If California gets away with its new, unconstitutional tax, consumers nationwide could be hit for billions and the economy will be harmed.

The Supreme Court ruled in 1992—as it had before—that retailers cannot be required to collect sales tax in a state where they do not have a physical retail presence. The battle back then was not about e-commerce but the billions of dollars in products sold through catalogs. For instance, if L.L. Bean didn’t have a store in California and you bought a pair of boots via its catalog, L.L. Bean did not have to charge you and then fork over sales tax to Sacramento.

Tax-hungry pols these days are eyeing not catalog but Internet retailers, particularly the biggest one of them all: Amazon (AMZN). The Golden State legislature recently adopted the so-called Amazon tax, which dictates that the Seattle-based retailer and other e-retailers must collect a sales levy on everything it/they sell to California residents and turn the proceeds over to the state treasury.

How in the world does Amazon, which has no physical presence in the state, get hit up for sales tax? This is as flagrant a violation of a Supreme Court decision as one will ever find. The legal fig leaf is Amazon’s “affiliates” program. Since 1996 Amazon has had a marketing program, whereby Web sites can offer their visitors a link to Amazon-offered products and services. These “associates” get a monthly fee for sales generated by those links. In California there are some 25,000 individuals and small businesses that are profiting from their partnership with Amazon and others. These individuals hardly constitute the definition of what lawyers call a “nexus” or a physical presence ŕ la a store or warehouse. (Amazon does have a traditional physical presence in four states and collects sales taxes from customers in those states.)
[blogs.forbes.com...]
10:45 pm on July 26, 2011 (gmt 0)

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this is not a GOOGLE thing

Then why the post in the Google forum?
12:06 am on July 27, 2011 (gmt 0)

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A heads up? Me, I think this is huge, and where is huge these days... ?

No apologies.
5:45 am on July 27, 2011 (gmt 0)

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I agree ~ it is an important opening salvo in a coming war to raise more tax revenue, and for those of us that do business online, we are going to be in the crosshairs. One way or the other, we'll be needing to submit paperwork and keep records of any internet based income, so we can pay it to our residence state or to ALL states (where customers are located) or to the Feds. It will start with the biggest players ~ Amazon et al ~ but eventually will encompass everyone, and it's my guess that any shopping cart payments received via Visa/MC/AE/Disc will require mandatory government oversight & tracking. Either they'll take their cut directly or we'll get a bill. With this country and many others drowning in debt, it's inevitable. Hope I'm wrong.

..........................
7:32 pm on July 27, 2011 (gmt 0)

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One thing I don't understand is how having an affiliate who is located in California is considered "having a presence," while advertising on adwords PPC provided by google (which is based in Mountain View) is NOT considered having a presence in California?
8:31 am on July 28, 2011 (gmt 0)

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One thing I don't understand is how having an affiliate who is located in California is considered "having a presence," while advertising on adwords PPC provided by google (which is based in Mountain View) is NOT considered having a presence in California?

Presumably the latter case is considered equivalent to advertising your mail order catalogue in a magazine printed in California.

This is all very confusing to us on this side of the Atlantic but is a warning about issues that may arise from Holyrood. We already have different rules for promotions on alcohol depending on which side of the Tweed you are on.
 

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