Amazon Cuts Off North Carolina Affiliates 411
Amazon.com has reportedly cut off all affiliates in North Carolina as a preemptive response to the sales tax change being pushed through the state legislature. The Seattle-based online retailer warned affiliates last week that such a move might be necessary, but the early shutoff seems to be a move in hopes of swaying opinion on the proposed legislation. "Local affiliates say they were 'blind-sided' by the company's action. 'I got this e-mail at 4:30 this morning,' said James Barrett, a technology consultant from Winston-Salem. 'It wasn't saying your account will be shut down. It said it is shut down. That just blew me up right there.' Barrett said that he is frustrated at lawmakers for considering the tax, but equally aggravated with Amazon. 'They're trying to tick off all their associates and get them to call down to Raleigh,' Barrett said. 'I think that is pretty tacky. That's not the way to use people who are referring business to your business.'"
That's the real meaning of "voting with your feet" (Score:5, Insightful)
Actually, I think it's a great tactic (Score:5, Insightful)
... even if it is a bit assholeish. It sends a loud and clear message to the NC government that the legislation will hurt local businesses.
It's not tacky (Score:5, Insightful)
That's exactly the way to use people who are referring business to your business. The only thing that motivates a business "relationship" is the exchange of value. If the proposed law was going to cause this change anyway, making it early as an example is the way to get people to "call down to Raleigh."
Re:Are Online Retailers Going to Contribute or Not (Score:1, Insightful)
So NC is acting like a typical "me first" government and ignoring its responsibility to the community. What else is new?
The fact is, governments have been leeching off communities for far too long.
Fixed that for you.
not tacky (Score:5, Insightful)
They're trying to tick off all their associates and get them to call down to Raleigh,' Barrett said. 'I think that is pretty tacky.
Sounds like an excellent way to motivate your local associates to get their arses over to the capital and ride their representatives. There's not a great deal Amazon can do directly to fix this, they have to rely on their local affiliates to keep the local conditions amicable to their business. If the locals aren't moving, then it's time to light a fire under them.
Got their attention too didn't it? Sounds like it's working as intended to me...
Re:While your at it...... (Score:1, Insightful)
What has happened to North Carolina lately?
Bravo North Carolina. (Score:4, Insightful)
>Bravo to North Carolina for calling these online retailers to be responsible.
Hope they enjoy no Amazon-related resellers operating in their state.
Taxes are how states compete for business. Raise taxes on a business that can operate anywhere else and avoid the tax, guess what? They are leaving town.
Re:Are Online Retailers Going to Contribute or Not (Score:4, Insightful)
The Balkanization of commerce isn't a good thing.
Amazon pays its taxes. Get Amazon to head quarter in your community and then you'll get its tax money.
The overhead of tracking tax codes down to the city level (and keeping up to date) would be overwhelming. The only winning move in this case really is not to play and that's what Amazon did.
Re:Are Online Retailers Going to Contribute or Not (Score:5, Insightful)
OK then, riddle me this: what is the sales tax rate for any address in the US? Note that you can't stop at the city plus ZIP code level, in San Diego County there are ZIP codes that're partly in a city (where city sales tax applies) and partly outside the city (where city sales tax does not apply). Where can a company go to find out authoritatively what the sales tax rate is for a customer address? I don't know of any, and it's just not reasonable to require a company to pay sales tax without giving them a way to find out how much sales tax they're supposed to collect.
good for amazon! (Score:5, Insightful)
Tough Shit (Score:1, Insightful)
Kudos to Amazon for making a decision and implementing it. Interstate commerce is hardly mandatory, and it sounds like there are some North Carolina lawmakers that need to get their heads held in a toilet and have it flushed a few times until they get the message.
Unfair? (Score:5, Insightful)
The legislator claims it's not fair that brick and mortar stores collect sales tax and Amazon doesn't. I say the brick and mortar collects taxes according to ONE tax structure in ONE place. What's fair about an out of state retailer having to understand potentially thousands of sales tax structures in many different combinations? Not to mention then needing to keep books on thousands of accounts to make sure the various state and local tax collectors get said taxes.
Unless and until the various legislatures are willing to get together on a simple clearing house to make it easy for retailers to figure out how much to collect and where to send it, they have little choice but to not do business in places that insist on it.
NC is already proving that such questions could be hard to answer. Whose taxes do we collect, the billing address? the ship to address? The address where the affiliate's server is located? NO! We must collect for the physical address of the person who owns the affiliate site. At least this week. No doubt the eventual answer (at least the one legislators will want) is ALL OF THE ABOVE AND MORE! In all different amounts with a whole table full of thresholds, percentages, and exceptions. OH, and different addresses to send the checks to with different required documentation and forms to fill out. Each and every one of them will claim that their tax is very simple and effortless to collect. None will recognize that the sheer volume and lack of standardization makes the matter impossible.
It's happening in a few states (Score:1, Insightful)
Got the email that it will happen shortly here in Hawai'i too.
What about NY? (Score:3, Insightful)
Re:blindsided? (Score:4, Insightful)
Trouble is...most of those people will still buy TV's first, and then complain they can't feel their kids.
Re:While your at it...... (Score:4, Insightful)
It doesn't matter whether the person in question is a customer, employee, or visiting dignitary. The only criteria that matters is that they entered the property willingly, knowing the conditions. That is as true for employees as it is for customers.
That fact that the business in your anecdote settled doesn't mean they would have been found liable in court--or that they were actually liable, which isn't always the same thing. The customer was liable, if anyone, for breaking the glass and thus creating the situation. However, it doesn't look good for employees to sue customers even when doing so would be justified, so I'm not particularly surprised that the employer settled the matter itself as an act of goodwill.
Re:While your at it...... (Score:3, Insightful)
Re:That's the real meaning of "voting with your fe (Score:5, Insightful)
Yes, it is unfortunate that N.C. sellers had to suffer for it, but I have to agree with Amazon's action on this. At every turn, government at all levels seek more and more money rather than taking a hard look at where they are spending it. Ultimately, I believe, they simply want more money to vote themselves higher pay and to return favors of their campaign donors. I wish there were a better way to run government. I vaguely recall one or more SciFi movies in the past where a city became a business or something to that end... the prospect was frightening, but I have to wonder if such a project were applied properly, if it wouldn't be run more efficiently. One problem with current styles of government is that there is little to no incentive to save money or to use it wisely. They have no profit motive and clearly no personal integrity or desire to serve motives. So I have to wonder, what motives would cause governments at local, state and even federal levels to deliver "good service" to the people at the lowest cost possible?
Re:While your at it...... (Score:5, Insightful)
A better example than a patron would be an employee - the vast majority of bars i've frequented left their employees in situations where the had no choice but to breathe in second hand smoke. I know the free-market extremists will disagree, but i think your employer should be responsible for a safe working environment.
I certainly know of someone who got a nasty laceration in his foot from broken glass from a customer spill. The bar settled and covered his medical costs.
That's certainly a different situation than being exposed to second hand smoke, though. If you apply to work at a bar/restaurant where smoking is allowed (which you could easily tell when you were picking up your application), I think you should expect that you'll be around second hand smoke and if that is objectionable - choose not to work there! If you object to working outside in the heat, perhaps you shouldn't apply for a construction job in California - it's not the hiring construction companies job to provide a portable air conditioning unit for you. If you object to working with children - you should probably not try to become a second grade teacher. If you object to working around alcohol - you should not apply to a liquor store. If you object to working around smoke, you should choose not to work at a place WHERE PEOPLE FREQUENTLY SMOKE. You are not entitled to work at whatever job you want with whatever conditions you want, no one owes you the type of job you dream of.
Re:Actually, I think it's a great tactic (Score:5, Insightful)
I agree. Amazon is losing sales on this too, so it's not like they're just screwing the little guy. They're putting their money where their mouth is.
Re:not tacky (Score:2, Insightful)
Oh? They couldn't boycott NC themselves?
So its good for them that they go ahead and push it off to someone else, but they don't take a hit themselves?
'I'm not going to let you sell my stuff because your state did something bad sorry it hurts you, by the way, I don't really want to get hurt myself, so I'm going to keep selling all day long and continue making money while you don't.'
Are you serious? Don't give me this bullshit like Amazon is doing the right thing or has its hands tied, thats just bullshit.
They are using their affiliates like pawns, while taking very little risk themselves. It may not be illegal, but it sure as fuck doesn't fall into the 'right thing to do' category.
If they wanted to do the right thing, they'd stop selling in NC completely, but that would cost them money, far easier to use the little pawns in a bad economy to do your bidding.
Theres a word for this sort of treatment ...
Re:Are Online Retailers Going to Contribute or Not (Score:4, Insightful)
Re:Are Online Retailers Going to Contribute or Not (Score:3, Insightful)
Without any kind of business expenses, I would be taxed 89% on every dollar I made. eighty. nine. fucking. percent.
Bullshit. If that were true, there would be no employers in NC.
Re:That's the real meaning of "voting with your fe (Score:3, Insightful)
Re:blindsided? (Score:3, Insightful)
What should he have said? "People who can't afford to buy TVs?" When those are the people you're talking about, it's easier to say "those people." There's no reason to bring your insecurities or sensitivities into this.
Re:not tacky (Score:3, Insightful)
Oh? They couldn't boycott NC themselves?
Why are you advocating the nuclear option? This is an incremental escalation, and a focused response to the specific issue. Amazon would consider boycotting NC if NC made a credible play at their direct sales. NC hasn't, and NC can't.
Good Lord, why don't you just suggest Amazon hire ninja assassins to off NC's legislature? That's about as over-the-top.
So its good for them that they go ahead and push it off to someone else, but they don't take a hit themselves?
They're losing affiliate commissions. It's not huge, but it's a hit. And more to the point, the lost revenue is less then the probable costs of compliance, so it's a sensible business decision.
'I'm not going to let you sell my stuff because your state did something bad sorry it hurts you, by the way, I don't really want to get hurt myself, so I'm going to keep selling all day long and continue making money while you don't.'
You have an odd habit. You make up internal monologue for other people. This allows you to project whatever suspicions, frustrations, and unproven biases you have into the words and thoughts of other people. Maybe if you make your own explanations for other peoples' actions, you can justify your spittle-flinging ranting about them? I bet you're lovely in traffic. Why yes, they are cutting you off to PERSONALLY offend you.
Let's at least pretend to be factually accurate. Amazon said "We are discontinuing our affiliate relationship with you (i.e., no longer advertising your products and facilitating your sales) because it exposes us to unjustified taxation." The rest of your little "quote" is just in your head.
They are using their affiliates like pawns, while taking very little risk themselves. It may not be illegal, but it sure as fuck doesn't fall into the 'right thing to do' category.
I'd be curious to hear a reasoned, rational explanation of the "right thing to do" according to you. If that's possible. As far as I can tell, Amazon has done the right thing: refuse to be bullied into a taxation relationship it has no obligation to enter into. Or are you one of those "the government is always right, because it's the government" whackjobs? We don't get many of those here.
If they wanted to do the right thing, they'd stop selling in NC completely
Why? That has nothing to do with the issue. The issue is tax exposure. Direct sales, they have no tax exposure, so they have no issue. Affiliate sales, they do. So, avoid the issue, terminate the affiliations, problem solved.
Theres a word for this sort of treatment ...
Yeah. It's called rational business.
Re:That's the real meaning of "voting with your fe (Score:3, Insightful)
That's been tried many times. People always ignore it until it's too late. By actively and immediately halting business, you can bet the affiliates will raise hell in a timely fashion.
Re:That's the real meaning of "voting with your fe (Score:1, Insightful)
There are better ways to argue against a law than hurting people not responsible for it.
I agree, but I think it is a bit much for you to claim the people of N.C. (whom are responsible for it, by voting the people whom passed this law into office and supported it by inaction) are hurting Amazon (A company who is not responsible for it) one little bit. Amazon will be fine, don't worry.
Oh, I get it, you meant that the other way around.. Ha, that's funny
Re:Actually, I think it's a great tactic (Score:3, Insightful)
Okay, currently in NC businesses which sell directly to NC residents collect sales tax, but NC businesses which sell to NC residents via Amazon don't. Whether or not you agree with NC's proposal, there are more factors here which I don't think you've considered.
the founders of this great nation realized that smuggling was a good thing
To the contrary, the United States was set up as a nation of laws and with the assumption that there would be taxes. There's nothing that excuses smugglers from the legal system.
But there is no reason why the governments should have license to grow when its supporting economy just dropped 20%.
Firstly, the proposed change in no way "grows" the government. It is simply an additional revenue stream. Secondly, since as you say the economy has dropped 20%, that means that NC is collecting about 20% less revenue. I highly doubt that this proposal will even come close to making up for this, so in total NC's revenue will be shrinking, not growing.
To argue otherwise is to argue that you can tax a nation into prosperity, or that you can lift yourself up by your boot straps.
Actually, there are good reasons why you want to do this.
First of all, the state's expenditures naturally increase during a recession. Why? Firstly, the basic costs of maintaining infrastructure do not decrease drastically: potholes in highways still need to be fixed, electric poles which fall during a storm need to be repaired, etc.
Secondly, consider that the 20% drop in the economy is not applied evenly. This year nearly 50% of college graduates didn't manage to find jobs. That is a lot of talent that is being wasted. Also, for example, some friends of mine used to be a two-income family until, in one week, one was laid off and the other had a 30% pay cut. That's a family that is now trying to live on one-third of their usual income, but their mortgage payments aren't any lower. As a result there is a lot of capable people who suddenly find themselves in deep financial trouble, if not homeless.
Because of this, the state's unemployment insurance program, its support for working families who aren't able to afford enough food for their children, homeless shelters, etc experience a large increase in the number of applicants. So, the costs of these programs rise, at the exact time that revenue falls.
What is the state to do? Not only would it be immoral to let people starve to death, it is foolish: dead people will never get jobs and help the economy in the future. You want all these talented people to be earning money, not dying in a tent city.
Instead, you DO want to have new government programs to help the economy. Take some of those unemployed civil engineering graduates and have them design better infrastructure for the cities, and then hire other unemployed people to build it. Not only do you get to enjoy the benefits in the future, but the newly employed people then spend their pay at local shops and stores, which means that those businesses have more sales, which means that they no longer have to lay people off or go bankrupt. This will improve the economy, and once it has recovered any loans that had to be made can be paid off. This just makes sense, and has worked before.
Re:That's the real meaning of "voting with your fe (Score:3, Insightful)
How and why is Amazon supposed to be treated differently than say, Walmart?
Walmart seems to be able to handle the tax issue, why is it Amazon can't do the same?
Re:Actually, I think it's a great tactic (Score:3, Insightful)
What message is that?
Is that the message you're referring to?
Amazon doesn't have the guts to stop selling to NC itself, that would cost them too much money, they just want to hurt the little guys. You know, the affiliates they use as cannon fodder on a regular basis?
Hopefully NC will amend the law to require anyone shipping a product into the state to collect sales tax on the sale and distributed it to the state. Of course Amazon will pull their typically big bully bullshit and point out their lack of presence in NC. But this will just go to serve the point, Amazon is just throwing their weight around.
Why should they get out of paying taxes for business done in the state, yet Walmart has to?
The state is supposed to make the companies that employee people in its state and provide the money that Amazon is taking, but let Amazon not contribute anything back?
It doesn't take a math major to figure out if you are sucking all the money out of an area and not putting anything back that it won't last forever.
Re:That's the real meaning of "voting with your fe (Score:5, Insightful)
Unfortunately, Amazon probably needed to demonstrate how serious they were, or NC might well have called their "bluff," leaving the affiliates out in the cold for much longer, if not permanently. Once some government erects a new law / regulation / tax / bureaucracy / program, it's harder to get rid of than mildew.
In fact, these things really are quite like an aggressive mildew. Do nothing, and they grow, advance, and encroach on your clean space. Work really really diligently and consistently, and you can sometimes beat them back to manageable levels. But get a little lazy once or twice, and boom... they're ba-ack, worse than ever.
If Amazon had merely warned their affiliates, there would be a big "yeah, right" factor on the affiliates' parts, and a big "yeah, right" factor on the legislators' parts. The tax might well pass, and Amazon's negotiating position would become that much weaker. Amazon *needs* big numbers of pissed off people -- really pissed off right this minute people -- to beat this thing. People who are merely imagining being pissed off in some potential future just don't act. Legislators need to see a thunderstorm, not a possible drizzle advisory; a storm of phone calls, not a flurry of tweets and a new Facebook group called "stop the tax."
With private economies shrinking but public spending expanding most everywhere, we are going to see more egregious tax grab strategies popping up more and more often over the coming months and years. The ones who don't get their pockets picked clean will be the ones who get brutal, or have someone get brutal on their behalf as Amazon did in this case.
Re:While your at it...... (Score:4, Insightful)
Re:That's the real meaning of "voting with your fe (Score:3, Insightful)
Perhaps North Carolina is upset because local business are closing due to the tax disparity?
Chicago infamously addressed an automobile tax disparity by forcing suburban car dealerships to collect City taxes. City dwellers could no longer escape the inordinate tax by buying in the suburbs; Chicago argued that place of residence, not place of purchase, determined the sales tax. Except, that is, for suburban dwellers who might have bought a car in the city. For them, it was the other way around. Now they're trying the same thing with *all* car rentals in the entire 6-county suburban area. (They *might* be driven into the city at some point, don'tcha know.)
Mightn't NC address the tax disparity by competing with the surrounding tax environment, or by using residence-based sources like real-estate taxes to shore up their shortfalls? People often feel it's their right to seek relief from (what they feel are) unfair or inordinate taxes by not purchasing in that jurisdiction. Without such competitive pressure, there is insufficient drive for any kind of fiscal responsibility by governments (though if you know of a better way to incent governments to efficiency, please share; I personally trust neither corporate leaders nor government leaders to innately have my financial best interests at heart). At any rate, if jurisdictions can start taxing beyond their boundaries left and right, we might as well just turn governing over to Bernie Madoff or Enron or Halliburton. At least then we'll know there's going to be a-screwin' coming our way.
Re:Actually, I think it's a great tactic (Score:4, Insightful)
> What is the state to do?
Well, one thing they could do is create rainy-day funds during times of prosperity instead of growing the government a corresponding amount. Some states do this, but I think most don't bother, because a big lump of cash sitting there is too much of a temptation to spend. And investing the rainy day funds raises the risk of being wiped out in the same downturn that the funds were for.
Regarding maintaining roads, at least in my state that's the first thing they cut out of the budget in a downturn. Speaking as someone who recently had a $3,000 insurance claim for damage done to my vehicle by a really deep pothole downtown.
But back to the question above, "what is the state to do?", it is a conundrum, because increased taxes in a downturn invariably stalls recovery, putting the government in an unwelcome position -- charity now, or prosperity later? The additional cost of the taxes to pay John Q. Unemployed's extended unemployment benefits may have been the money the company needed to hire him. Or worse, it may be the impetus for the company to move to a more business-friendly state, causing the jobs to disappear forever.
Re:While your at it...... (Score:4, Insightful)
Re:That's the real meaning of "voting with your fe (Score:1, Insightful)
WHO IS JOHN GALT?
Re:That's the real meaning of "voting with your fe (Score:3, Insightful)
Granting all your arguments for the sake of argument, what would be the limiting factor against this annexing power? In my experience, the further the power center gets away from the individual, the less responsive it is to individual needs. It may be that this is a good thing in your view... that the individual should subordinate his or her individual needs to the needs of society at large. In the current state of affairs, the limiting factor is the inconvenience of moving; if a city's fiscal penalties to its residents (compared to surrounding jurisdictions) aren't sufficiently harmful to overcome the costs of uprooting & moving, then the residents will endure them. If they are, then the city will have to take notice and take corresponding steps to lure residents back. These same factors apply at a lesser scale to the act of making a purchase, e.g. gas, cigarettes, automobiles and such.
I tend to think that cities often create the conditions that lead to crappy schools, higher unemployment, and higher unit taxes despite a higher population density (and thus presumably better economy of scale). I guess I'm wondering why you think it is that a large city as a system unto itself couldn't blow the doors off a nearby suburb (also as a system unto itself). As a city grows, if it's governed as you envision, shouldn't people want to move into it rather than away from it?
Re:Actually, I think it's a great tactic (Score:3, Insightful)
Minimize the impact of fluctuations in revenue by minimizing government services and expenditures.
Solve the problem of bureaucracy ("the bureaucracy is expanding to meet the needs of the expanding bureaucracy") and apply the fix to every state and local government.
The state should be fiscally prudent so that it is able to borrow money to make it through temporary tough times. Then, since it is fiscally prudent, it will be able to pay that debt off during good times.
Obviously no state government is going to do those things, but that's a better arrangement than what we have now (spending higher than revenues all the time.)
Re:That's the real meaning of "voting with your fe (Score:3, Insightful)
Usually, it comes down to the question of who has more guns.