How many affiliates are they willing to terminate? All of them (besides the 5 states it already collects for http://www.amazon.com/gp/help/customer/display.html?nodeId=4...) ?
This isn't Amazon trying to skirt paying sales tax, it's merely amazon making a level headed business decision in the face of irrational and grasping legislation.
I don't see why a "[adjective] business decision in the face of [adjective] and [adjective] legislation" is in any way different from "skirt paying sales tax".
It should be pointed out, since so many people forget this in this discussion, that as a resident of a state you are frequently required to pay the sales tax to the state directly in the form of a "use tax". This isn't about consumers owing sales tax, technically the states have already made that happen. It isn't about Amazon "not paying" this tax, because it is the consumer's responsibility at that point. It is about one state forcing an entity not in its jurisdiction to do something for the convenience (and little more) of that state. Amazon's got a pretty strong case here; any principle that makes this compulsion legal is likely to have numerous and manifold "unanticipated results" beyond merely getting Amazon to collect tax.
California residents should be paying the California sales tax on things they buy, and the state has a right to make that happen. Nobody's talking about forcing Colorado residents to do anything.
I agree that they should find a way to make it a reasonable burden for Amazon to collect that information, but if local retailers have to collect and Amazon doesn't, that seems unfair and noncompetitive.
That's the whole point of this issue. It involves parties in different states.
You're argument is that if someone from state A does business in state B, then it is the responsbility of the business in state B to collect the sales tax required by state A.
How can you not understand why this is a terrible argument? It means that every business would have to know and calculate the sales tax for all 49 other states and that every purchase would require proof of residence to verify which sales tax needed to be charged. Then the business would have to deal with filing taxes in 50 separate states.
Ugh...I can't even imagine how this makes any sense to anyone.
This way "user A" in Washington doesn't owe the state any taxes for that purchase, and doesn't have to declare it on any tax forms.
Now someone in California ("user B") purchases an item from Amazon. Amazon is located in Washington and in accordance with federal law is only required to collect taxes for the state it is located in. So "user B" buys the product and Amazon does NOT collect the California state tax. "user B" now has to put all of his purchases down on his tax forms, and pay the tax for the items he bought.
Amazon had an affiliate program in California. This affiliate program was claimed by the state of California to mean that Amazon was located in California ("to constitute a physical presence"). If that is the case, then Amazon would legally be required to collect tax for "user B"'s purchase and remit it to the state of California.
This would effectively mean that Amazon would now have to file taxes in Washington as well as California. Not a problem for a big corporation you say, imagine then that all 50 states implement said system, Amazon would now be on the hook for filing and paying tax in 50 different states, even-though it technically does not have a physical presence in the state.
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Local retailers have a physical presence in the state, and are by law required to be registered businesses and thus are required to collect state sales tax for the state they are in. If however they also shipped out to other states (lets say they are located in CA, and ship to NJ) they would not have to collect sales tax on the sale when shipping to NJ since that is interstate commerce.
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This may not seem fair, but if any company doing any business with another business or individual out of the state where they have a presence has to keep track and file tax paperwork for each state they do business with it would become unmanageable, especially for smaller businesses where doing tax for one single state is already a big burden, imagine having to do it for all 50 and each one having different laws or different rules regarding taxation.
The states are basically attempting to close a loophole consumers are using, whereby they purchase items out of state so that they don't have to pay taxes on it, and then technically they are breaking the law by never declaring those items.
Can you explain the benefits? Why would we want to tax local goods and not goods that are shipped across state boundaries?
Again, it's not a tarriff on out-of-state goods, it's assessing the same tax on out-of-state as you do on in-state goods.
A non-reverse-tarriff, if you will. Level playing field is all I'm arguing for here, don't see how that message keeps getting lost.
I'm sorry this is actually an issue about cross-state jurisdiction, rather than the duty of large companies to be responsible to society and dutifully pay as many taxes as they can, but this is the situation as it actually is.
Governments do not have rights. Only people have rights. Governments exist to protect the rights of people.
The "government of the people, by the people and for the people" has a right, in the people's name, if you'd prefer.
Actually, the "corner store" doesn't have to collect sales tax. The "corner store" collects sales tax for the jurisdiction it is in. (Car dealers are an exception because of licensing.)
CA says that its residents owe sales tax on anything that they use within the state. For example, if a CA resident walks into a store in Nevada, buys something, and takes said something back to CA, CA thinks that it is owed sales tax.
I've never seen a Nevada store collect CA sales tax for sales to CA residents. I've never even seen someone suggest that said store has an obligation to collect CA sales tax. Why is Amazon different?
And yes, most Nevada stores will ship.
The principle is "same amount of taxes for everyone". I don't live in California but if I did, I wouldn't be huge on the idea of tax-disadvantaging local businesses against out of state businesses.
Having a business collect sales tax for a state it has no presence in is not in accordance with federal law, and California law does not apply due to interstate commerce laws. Thus there is no way to force Amazon to collect tax for sales to California residents.
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Go tell the consumers to pay taxes for all of the stuff they have bought, it is the consumers who should be paying the taxes and aren't.