Amazon surrenders to nationwide state sales taxes.

Amazon is no longer doing business in certain states (i.e., California) where online retailers must collect and pay sales taxes. However, the new proposed legislation extends to nationwide if the bill is passed.

Actually that would be great to for IL affiliates who all got the boot back in May.

My guess is that everyone would register their business in one of the 'safe' states--would that still be possible?

It has been the law of the land, until recently, that unless you have a physical presence in a state, you are not required to collect sales tax on orders shipped to a state. US Supreme Court Decision 1992. I couldn't find the case this time, but I have posted it previously. They held that it was an undue burdon to make them collect sales taxes for other states.

Now having an advertising contractor in a state can hardly be considered a physical presence. That would be pretty flimsy.

I don't understand why Amazon lawyers haven't found that case to dispute these states claims instead of dumping the affiliates.

Ah, I am just amazing, I found it. Quill Corp. v. North Dakota, 504 U.S. 298 (1992)

So as far as my non legal mind can tell, all of these laws, including this proposed one are unconstitutional. I would just show them that case and say read it and weep. But then I am not a lawyer so what do I know. Maybe the SCOTUS is not the supreme law of the land, even though the Constitution says it is. Of course, I have heard that the Constitution is out of date. Who knows?

I think it's voluntary by the state too. Amazon will keep moving until it finds somewhere safe to do business though, and doesn't seem to mind pulling the plug on other states to prove it's point.

I believe CA is the exception. It impact Amazon badly and that is why it had to go with the wind.

If it was a state with lower sales, wouldn't even bother

Misleading thread title.

Amazon has not 'surrendered" to anything, and their readiness to drop affiliates shows that they aren't going to let this happen without a serious fight.

I would imagine if such a law went through that paypal and other processors will just set up a tax box on their shopping carts so merchants can keep track of what they owe, and everyone will pass the taxes on to the purchaser - where they have always been up til this time. If it was done that way, there would be few hassles for merchants other than fewer sales here and there on larger ticket items that tax would make a large difference in the price of the item. They'd have to at least give merchants a means to know which state sales came from. How can you be charged a sales tax if you don't know from where the sale originated?

Cool Hand Luke,

Amazon is compromising (surrendering) to a "a simple, nationwide system of state and local sales tax collection, evenhandedly applied to all sellers, no matter their business model, location or level of remote sales." This quote (according to LA Times) appears in Amazon's letter to Senator Durbin (and Conyers).

Amazon dropping affiliates had nothing to do with them having to collect sales taxes. It had everything to do with affiliates earning a living in certain states and paying taxes on that income which was produced by amazon commissions.

Amazon still sells stuff in CA. They just wanted to reduce the tax the government gets from affiliate income in that state.

I wonder if the bill gets passed if Amazon will reinstate the affiliates in all the states that it dropped?
Deb