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.'"
blindsided? (Score:5, Interesting)
2. Time for the referral businesses in NC to relocate. Or close up shop. We'd be happy to have them (and their income & property tax revenues) here in NJ.
Of course, now it's only a matter of time before most states have similar laws. Then it'll be time for these businesses to relocate to the Cayman Islands.
Re:Actually, I think it's a great tactic (Score:5, Interesting)
While your at it...... (Score:1, Interesting)
Get them to reverse the public smoking ban they just nazi'd through.......
As a small restaurant owner, I have the right to decide if the use of a COMPLETELY LEGAL substance such as tobacco hurts or helps me bring people through the door to keep my employees and bills paid.
I wish I could shove the horse you rode in on straight up your southern expressway with your opinionated legislation.
Re:blindsided? (Score:5, Interesting)
2. Time for the referral businesses in NC to relocate. Or close up shop. We'd be happy to have them (and their income & property tax revenues) here in NJ.
Or they could setup a proxy LLC in Delaware [wikipedia.org] through a registered agent [delaware.gov].
Re:Are Online Retailers Going to Contribute or Not (Score:3, Interesting)
Re:Are Online Retailers Going to Contribute or Not (Score:3, Interesting)
Right, because it's not bad enough that the affiliates in North Carolina are already taxed on their earnings, but now they have to be taxed on the sales they refer to Amazon? You're talking taxing the same people three times on every sale (Local, State, and Affiliate). Let's not mention the bigger affiliates that are taxed 5 times (2x corporate earnings taxes, IRS personal, State personal, Affiliate)
Oh, and yes, the IRS and states tax the shit out of individuals in business. I don't know where people get the idea of mystical business tax relief, because if you're in business and playing by the law, you don't get a refund check, you send in a damn check every fiscal quarter.
Without any kind of business expenses, I would be taxed 89% on every dollar I made. eighty. nine. fucking. percent. And I'm just barely hovering around the poverty line doing this shit. Then you and your backwards populist shitheads yell at me for not spending money to better myself on college, or buying a car, or some other bullshit.
If your community is in such a dire condition that they absolutely need to tax a person a third time on the same dollar, then your community is completely fucked, needs to be dissolved, have its assets liquidated, and a new structure put in place.
In short: go fuck yourself.
A question for any legal geeks (Score:4, Interesting)
Can a company move to a US territory and still get all the perks ?
i.e. Puerto Rico ?
Re:That's the real meaning of "voting with your fe (Score:3, Interesting)
Too bad it has to be that way, but it is much easier to kill a bill than to kill the resultant law. I hope NC's (attempted) money grab was worth it.
Re:Are Online Retailers Going to Contribute or Not (Score:5, Interesting)
OK then, riddle me this: what is the sales tax rate for any address in the US?
I've had to deal with sales tax in both Virginia and North Carolina. The truth of the mater is they don't want you to know what the current tax rate is because they make more money when they audit your small business and apply fines a couple years later.
In Virginia my business was fined for not anticipating our GROSS income correctly. We GROSSED more money one year and because of that we had to pay the tax difference plus a couple thousand in fines. I'm just happy we had a CPA because the tax people where screaming murder until I said they would need to talk with our CPA then they where much nicer...
Small business owner's really can't win by playing by the rules...
Re:Are Online Retailers Going to Contribute or Not (Score:2, Interesting)
Do you have any idea what a nightmare it would be for a small online retailer if they had to figure out what sales tax to charge on every transaction in every locality in the country.
Well, we have the internet, databases and computers. Automating this would not be difficult at all. States/cities/etc. would submit their tax rates based on GIS data and the federal government could maintain a database searchable by merchants. If the local units don't accurately represent their sales tax rates, then the onus is on them to fix it.
The technology is not a problem here. We can solve that problem. The real problem is a culture of disinvestment in our communities.
Re:Are Online Retailers Going to Contribute or Not (Score:3, Interesting)
"The fact is, online retailers have been leeching off communities for far too long. They make use of the infrastructure these communities provide but use tax evasion to make sure they don't contribute to its upkeep."
What infrastructure is Washington based Amazon using in North Carolina?
That's the rub. They aren't.
That is the whole point behind "No Nexus = no tax"
Go For It Amazon (Score:4, Interesting)
Yes I'm sorry that people are getting hurt along the way with this, but go out there and get your state back in order once more and this won't be happening.
Disclaimer 1: I sell on Amazon and I'm still all for this.
Disclaimer 2: I lived in California and breathed that air every day.
Re:What about NY? (Score:5, Interesting)
What's ridiculous is that this law doesn't seem to tax based on the location of the seller or the buyer, but instead on the location of the referrer. Sales tax is supposed to be a tax on the buyer, and it just happens to be the responsibility of the seller to collect it. So NC is trying to charge a sales tax of a buyer that isn't a resident.
It might sound sensible to take a cut of that referral money (since that's the party that's in state), but they're already taxing that by charging income tax to the referrer.
Re:Are Online Retailers Going to Contribute or Not (Score:2, Interesting)
"Do you have any idea what a nightmare it would be for a small online retailer if they had to figure out what sales tax to charge on every transaction in every locality in the country."
As an online AND brick and mortar retailer, I can imagine. It would be DIFFICULT! I mean, you'd have to have some sort of computer program that accessed a table, geez, maybe HUNDREDS of records large, and then report to the business owners where to pay the tax to! I mean, it would take a good, 5-10 minutes for somebody to program, and it would have to be updated every few months. Whoa! Talk about an inconvenience.
That's a LOT more difficult than trying to run a brick-and-mortar store that pays significant amounts of taxes and having to compete against businesses that don't have to collect sales tax from their customers.
Please not this entire post was tongue in cheek. Except for this line. Oh, and the quote I was responding too... that was literal.
Re:They Had Warning (Score:3, Interesting)
Re:Are Online Retailers Going to Contribute or Not (Score:3, Interesting)
Without any kind of business expenses, I would be taxed 89% on every dollar I made. eighty. nine. fucking. percent.
I call bullshit. Seriously. I've worked for a number of small companies, and I've never seen any loading or tax liability anywhere near that. What the hell are you doing wrong to get to 89% (my guess? He's calculating it horribly wrong).
Really, I would really like to know, because I would love to rally against it like nobody's business, but I just can't even come close to conjuring up a scenario where 89% is the actual tax liability.
Re:Bravo North Carolina. (Score:3, Interesting)
If you think a company looks at the arts culture before looking at the local tax structure then you're delusional.
Imagine a CEO in front of a meeting of shareholders, and they're asking him why all of their dividends just fell. His answer is because he wanted to move his company into a state with a "thriving arts culture", even though he's now paying twice as much to do business there. How much are his shareholders going to care about the arts culture in a city they don't live in?
Here's a question: why are so many companies based in Delaware? Is it because Delaware has a "thriving arts culture", or is it because Delaware is once again in the top 10 states for favorable business tax environments in 2009?
Re:That's the real meaning of "voting with your fe (Score:5, Interesting)
"Threatening" government with pulling out is often weak and empty and used far too often. Eventually, with all the posturing that goes on, someone has to make a move that is exact and meaningful. Amazon made a move rather than attempt to actually "play" politics through threats and posturing. So I have to disagree. Amazon is not playing politics. Surely they have taken into account that they would alienate some people in N.C. but they have to prove they are serious.
Amazon isn't sending lobbyists with bags of cash. Amazon isn't asking sellers to plea to the government. Doing so would, in fact, be playing politics. By making a decisive and definitive action, they are make their statement in the only clean and honest way possible. Begging and threatening politicians is only playing their game. To withdraw is the only way... unless you can think of another?
Undoing a law after it has passed is a good deal harder than preventing it from passing. The DMCA seems to be sticking around regardless of how frequently it is abused and how much it harms the people. It's a bad and unpopular law that could only have been passed in the way it was (subversively) and it's not going away. Amazon is speaking not only to N.C., but to every state of the union. Taxing the internet is a very bad idea just as a state seizing a domain name because the operators who do not operate in the same state is violating that state's law is a bad idea. States should never exceed their borders and yet attempt to do so at every opportunity.
Re:That's the real meaning of "voting with your fe (Score:3, Interesting)
They have no profit motive and clearly no personal integrity or desire to serve motives.
Yes, clearly, all politicians lack personal integrity -- and if they had a profit motive they would be full of integrity. </sarcasm>
At every turn, government at all levels seek more and more money rather than taking a hard look at where they are spending it.
Wait, I thought they had no profit motive...
Perhaps North Carolina is upset because local business are closing due to the tax disparity? Amazon sneaks in as an interstate institution, and they know that if residents have to pay tax in addition to shipping, their customers will be more likely to patronize local business. The same places that provide property tax and pay for things like schools. I doubt this has anything to do with "campaign donors and higher pay", which sounds like knee-jerk AM radio conservatism.
Re:They Had Warning (Score:1, Interesting)
I imagine that the legal theory is that because the affiliates are paid for their referrals, they are acting as agents, and so are in effect something like a franchisee.
Re:Actually, I think it's a great tactic (Score:3, Interesting)
So just curious, as more and more companies do like Amazon and more and more purchases are made from out of state due to this sort of web service ...
What do you think states should do to deal with the lost revenue.
Amazon seems to have no problem taking money from people in North Carolina. I don't see them paying their own state any taxes on those sales.
Its not like they don't just pass sales tax along to the customer like every other business ANYWAY.
Its not like Amazon itself is paying the taxes to NC.
Don't feed me some bullshit about how their system doesn't support it and how expensive it would be to add, if QuickBooks can deal with mutlistate taxes its your own damn fault for buying/creating something for a company the size of Amazon that can deal with global accounting.
So when your state ends up with no instate businesses, so theres no more sales tax, and suddenly you have no money to fund all the shit that you take advantage of on a daily basis, then what? When you start losing city services that these taxes subsidize ... now what?
Its nice to rant and rave about how evil taxes are, but you're tone will change the instant you lose some precious amenity that you probably think of as a god given right.