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Government The Almighty Buck The Internet United States Your Rights Online News Politics

Rhode Island Affiliates Banned From Amazon.com Sales 532

Rand Huck writes "Amazon.com has now added Rhode Island to its blacklist of affiliates in response to its proposed budget changes to enforce a tax on Internet sales, which includes commissions on their affiliate program by content providers based in Rhode Island. The first state to be blacklisted was North Carolina, for the same reason. If you go to a Rhode Island-based or North Carolina-based website that advertises Amazon.com goods as an affiliate, that website will no longer have the goods available because otherwise Amazon.com would be forced to pay sales tax to the State of Rhode Island and Providence Plantations or the State of North Carolina. The state's rationale is, if someone clicks to buy a good from Amazon.com via a site based in Rhode Island, it's equivalent to buying a good from a brick and mortar chain store located in Rhode Island."
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Rhode Island Affiliates Banned From Amazon.com Sales

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  • Tax 'em! (Score:2, Interesting)

    by NineNine ( 235196 ) on Tuesday June 30, 2009 @11:58AM (#28529497)

    I run a brick and mortar store AND an online store. No more than 5 minutes ago I was talking to a customer in the store, and she was asking what the sales tax was to see if she could buy the product cheaper online. That's ridiculous. People are short sighted and selfish. If this continues, we will have very little retail anywhere in the country in a few years, because everybody will be trying to avoid the sales tax. The gov't needs to close this huge loophole. Amazon needs to compete on a level playing field with other retailers. I know that I'd much rather add a bit of code to my web site to collect sales tax correctly all over the country than to have people avoid my brick and mortar store to try to shave a few pennies off elsewhere. I support online retailers having to collect sales tax.

  • by Iphtashu Fitz ( 263795 ) on Tuesday June 30, 2009 @12:01PM (#28529541)

    I'm in Massachusetts. If I happen to visit the website of the Trinity Repertory Theater (www.trinityrep.com), a theater located in Providence, RI, then my internet traffic doesn't even pass through Rhode Island, much less end in Rhode Island. Their website is hosted by a low-cost provider out in California. The only tie to Rhode Island is that the website was created by an organization in Rhode Island. If I visit that website I don't "visit" Rhode Island. So why should Rhode Island have ANY claim on anything I might purchase from an affiliate program hosted on that site? I'm visiting a website hosted in California and if they were an Amazon affiliate then that would involve a company located in Washington. RI doesn't have any valid claim to tax such a transaction.

    By their own logic, I'm buying goods from a brick & mortar store in California (or more appropriately Seattle), NOT Rhode Island. If anything, the company in RI is simply acting as an advertising agency. They designed an advertisement (the website) that's on display in California for a company that actually does business in Washington.

  • The local state has the right to tax their residents out-of-state purchases. When you buy something in another state, you're supposed to pay your local sales taxes, and then file for a reimbursement from the state you paid the original tax to - but it's not enforced. Now the individual states ARE saying - hey, here's a way we CAN enforce it.
  • by Xaedalus ( 1192463 ) <Xaedalys@yaho[ ]om ['o.c' in gap]> on Tuesday June 30, 2009 @12:02PM (#28529579)
    I think that would work out very well: Congress dictates ONE tax for the internet in terms of sales tax. It's ludicrous to force anyone (even if they do have the resources) to have to divert resources to figure out fifty different sales taxes. Also, there is the risk of being double-taxed at stake (Company A pays sales tax wherever its accounting division is located, and passes it on to customer, and then customer has to pay sales tax again of his/her home state).
  • by Maltese Falcon ( 11786 ) on Tuesday June 30, 2009 @12:03PM (#28529581)

    By the very same reasoning they use for Amazon, if anyone goes to a phone located in Rhode Island and makes a purchase of anything, it's the same as going to a brick and mortar of that shop in the state and is also subject to equivalent taxes. Even ordering by US mail out of a catalog would reason out to the same logic (providing the catalog and/or mailbox is physically located in R.I.). Amazon might even be able to use that to force R.I. to either include phone orders across the board or drop the bill/law.

  • Re:Catalogs (Score:3, Interesting)

    by teg ( 97890 ) on Tuesday June 30, 2009 @12:17PM (#28529873)
    For Amazon, this is certainly not about complexity. It's about the sales tax - it will no longer have a "discount" compared to local brick and mortar stores, by avoiding this extra cost that they have to pay. Thus, it will either lose some of its edge - or reduce its profits.
  • by C_Kode ( 102755 ) on Tuesday June 30, 2009 @12:22PM (#28529955) Journal

    Amazon is basically screaming: "Taxation Without Representation" and taking a stand against what it believes is unconstitutional taxation. (ie being taxed by a foreign (different state) government) This is exactly what happen in the mid-late 1700s and the reason the US is it's own country rather than part of the United Kingdom.

    I completely agree with Amazon. I happen to have an Amazon shop (I'm not located in either of those states) I know it screws the webstore owner, but Amazon is doing the right thing and THEY need to stand up to their own state's goverment and let them know that they are hurting their own people by being greeding and trying to tax people that don't even live in their state.

  • by Sir_Real ( 179104 ) on Tuesday June 30, 2009 @12:23PM (#28529979)

    So the store doesn't get a sale, doesn't pay the stakeholder, who was presumably going to spend money in the state on taxable goods and services. The state still loses. The original sale doesn't generate revenue and the seller won't be purchasing anything that generates tax revenue with the proceeds of the sale that didn't happen. Sorry states, there will always be at least one state that will take advantage of this and host amazon friendly affiliate websites. This is kinda like how you can incorporate an LLC in any state you have an "agent" in (100 bucks a year gets you agent representation in any state) but no one in their right minds incorporates an LLC outside of Nevada or Delaware because of the incredibly low taxes and business friendly body of case law they've produced. You still have to pay personal income tax in the state you perform work but you get a credit for taxes you pay to other states for your state of residence taxes.

  • by 0100010001010011 ( 652467 ) on Tuesday June 30, 2009 @12:28PM (#28530063)

    Hawaii is close...

    It's not passed yet (but this is the best time to catch it).

    If you're in Hawaii get on the phone lines to your state senator and harass them about this.

    http://www.starbulletin.com/business/20090627_Amazon_poised_to_cut_affiliate_program_in_Hawaii.html [starbulletin.com]

  • by alen ( 225700 ) on Tuesday June 30, 2009 @12:29PM (#28530087)

    NY's AG started this whole thing and I think it's still being litigated. If Amazon stops doing business with NY affiliates then it may be seen as evidence of admission of guilt or whatever and NY's AG wins. If they continue to litigate and win they can then go back and start up their other affiliates

  • by JPLemme ( 106723 ) on Tuesday June 30, 2009 @01:19PM (#28531265)
    For the zillionth time, RHODE ISLAND IS TRYING TO COLLECT TAX FROM RHODE ISLANDERS! It has nothing to do with out-of-state anything. RI is trying to force amazon to collect RI sales tax from RI residents (or at least people with RI shipping addresses) by claiming that amazon has affiliates based in RI, and thus has a physical presence just like Walmart or Target.
  • by Anonymous Coward on Tuesday June 30, 2009 @01:20PM (#28531287)
    1) How much is my fair share, and who decides?
    2) Who should I pay my share to?

    Please show justifiable legal explanation to these 2 questions. Or, drop the smug overly righteous tone, please.
  • by Anonymous Coward on Tuesday June 30, 2009 @02:18PM (#28532317)

    Wow. Those commercials really are working. You are aware that political commercials are rarely accurate. You really should try researching things yourself before spreading misinformation.

    With the exception of a couple of unions, most California state workers are paid less than their city, county and private sector counterparts. And that was before the furlough program that effectively gave most state workers a 10% reduction in pay.

    I find it interesting how many people are willing to hit a small group of people (who are already paid less than the norm) for 10-20% (there is talk of up to 2 more furlough days) so that they don't have to take a 0.5% hit.

    There is definite bloat that can and should be trimmed from the state agencies, but I would also look closer at the special interests. They are scapegoating the unions to take attention away from themselves.

    Consider the source of your information and notice how they don't actually provide details, just unverifiable generalities.

  • by falconwolf ( 725481 ) <falconsoaring_2000.yahoo@com> on Wednesday July 01, 2009 @12:22AM (#28538539)

    I believe all sales taxes should be abolished in favor or progressive income taxes

    And I believe just the opposite. The federal income tax should be abolished, then the size of the federal government cut back to it's Constitutional limits. Once that's done if user fees aren't enough them have a federal sales tax. People should not be taxed for their hard work, just for what they buy and or use and the pollution they create.

    Amazon should charge sales tax on those states that pass these laws.

    Why should Amazon or any other business pay sales tax to a state they do not operate in? They shouldn't period!!!

    The fight is between the citizens of those states and their publicly elected governments, not between Amazon and the government.

    This is as it should be between Amazon and those states who would require Amazon to collect taxes for goods sold to residents of those states. Those states are demanding Amazon spent more money to collect and distribute taxes. And the US Supreme Court has already told states they could not do that to a business that was not located in those states that want collect sales taxes from businesses that are not located in the state.

    This has everything to do with the commerce clause.

    That's right, these states are trying to get around the commerce clause of the Constitution of the USA. And they should not be allowed to. Now if the federal government had stayed within the limits put on it by the Constitution or is forced to then it got rid of or lowered income taxes then states could raise their own taxes to pay their own needs.

    Falcon

He has not acquired a fortune; the fortune has acquired him. -- Bion

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