23 {{ upvoteCount | shortNum }}
23 {{ upvoteCount | shortNum }}

Amazon will start collecting sales tax in TN in 2014!

by TNAM
19 replies
It was just on the local news that Amazon has agreed to start collecting sales tax in TN starting in 2014. I can't believe they are doing this! They already have an agreement with TN that gives them an indefinite waiver on collecting the sales tax. Ever since that agreement was made public earlier this year, people and businesses have been griping about it. Regardless of that, the governor had agreed to honor the agreement rather than fight it. The previous governor was the one who made the agreement with Amazon. Amazon's decision may have something to do with a legal opinion from the state Attorney General on Tuesday that supposedly could require the exemption to be revoked, according to an association of retailers. I don't know how this will affect Amazon's affiliates in this state. Since they are doing this willingly, maybe they won't pull the rug out from under their affiliates. They will also be adding an additional 2,000 jobs to the state and $350 million capital investment in three counties, but this still sucks. Anyway, just a heads up in case anyone is interested.
#2014 #amazon #collecting #sales #start #tax
  • Profile picture of the author JeanneLynn
    They've been collecting tax in NY for several years. It adds 10% to the price of everything!
    {{ DiscussionBoard.errors[4823727].message }}
    • Profile picture of the author TNAM
      Wow! You guys have an even higher sales tax than we do. It varies across the state, but it's 9¼% in my county. Of course, we don't have a state income tax, so that makes it easier to deal with. I'm still surprised that Amazon gave up their free ride here, especially since they've been fighting the tax whenever a state tries to impose it on them.
      {{ DiscussionBoard.errors[4824014].message }}
  • Profile picture of the author JeanneLynn
    I hate it. We do have a state income tax in New York. The property taxes are outrageous too. I pay over $5000 a year in property tax and I live in a 960 square foot shack! If I didn't have so much family, I'd be out of here!

    I wonder how how many states are affected by Amazon taxes now. It's got to be hurting affiliate sales.

    My cousin lived in Tennessee (Tullahoma) for a while; I hear it's a gorgeous state.
    {{ DiscussionBoard.errors[4824096].message }}
    • Profile picture of the author TNAM
      Originally Posted by JeanneLynn View Post

      I hate it. We do have a state income tax in New York. The property taxes are outrageous too. I pay over $5000 a year in property tax and I live in a 960 square foot shack! If I didn't have so much family, I'd be out of here!

      I wonder how how many states are affected by Amazon taxes now. It's got to be hurting affiliate sales.

      My cousin lived in Tennessee (Tullahoma) for a while; I hear it's a gorgeous state.
      Wow! That is outrageous! I've always heard that NY was super expensive, and now I know it's true. It sure makes me appreciate this area even more now.

      I'm not sure how many states have the "Amazon Tax" now, but I think there are quite a few. Unfortunately for affiliates, as each state passes the law, Amazon closes their affiliate program in that state.

      Yes, for the most part, TN is a beautiful state, though I still love WA State more. That state is so beautiful it hurts.
      {{ DiscussionBoard.errors[4824471].message }}
  • Profile picture of the author microfac
    Originally Posted by TNAM View Post

    It was just on the local news that Amazon has agreed to start collecting sales tax in TN starting in 2014.
    Got an email from Amazon today stating that I can get my cancelled account back as a California affiliate. Apparently, Governor Brown rescinded the recently passed statute and made some kind of deal with Amazon.
    {{ DiscussionBoard.errors[4824867].message }}
    • Profile picture of the author TNAM
      Originally Posted by microfac View Post

      Got an email from Amazon today stating that I can get my cancelled account back as a California affiliate. Apparently, Governor Brown rescinded the recently passed statute and made some kind of deal with Amazon.
      Yes, I read about that. It's really great news for people living in California. Unfortunately, the deal was that Amazon will start collecting sales tax in CA in Sept. 2012 if there isn't a federal solution before then. So, that means that CA affiliates may be right back in the same boat this time next year. That is really lousy, but at least you guys can make money until then. This is perfect timing to allow you guys to cash in on the upcoming holiday season. Grab it while you can. Good luck!
      {{ DiscussionBoard.errors[4825144].message }}
  • Profile picture of the author JeanneLynn
    In New York, we're still allowed to be Amazon affiliates. I wonder why Amazon is only blocking affiliates in some of the states that they collect tax in.
    {{ DiscussionBoard.errors[4825425].message }}
    • Profile picture of the author TNAM
      Originally Posted by JeanneLynn View Post

      In New York, we're still allowed to be Amazon affiliates. I wonder why Amazon is only blocking affiliates in some of the states that they collect tax in.
      Hmm.... I don't know. For some reason, I thought they were dropping affiliates in any state that passed a law that would force them to collect sales tax. That's weird. I know that their lawsuit against NY got revived late last year, but it's anyone's guess how it will all play out. I believe there are 19 states that have passed some sort of legislation against Internet retailers, though at least two of them just require the Internet retailers who don't collect sales tax to provide notices to customers that sales taxes are due. I wish I knew what Amazon is going to do in my state now that they have agreed to collect sales tax starting in 2014. I'm still hoping that they won't drop affiliates since they must have agreed to this voluntarily. I guess TN affiliates will just have to wait and see.
      {{ DiscussionBoard.errors[4826517].message }}
      • Profile picture of the author AlexSid
        I'm wondering if this will affect International amazon affiliate also. If so I better start ramping up all my amazon affiliate campaigns to squeeze as much money from them before they start taxing me
        {{ DiscussionBoard.errors[4826710].message }}
        • Profile picture of the author Kay King
          I think many people have interpreted Amazon's actions in a few states incorrectly. My view is Amazon has refused to operate in states where the wording on a tax bill put Amazon at risk.

          Maybe state taxes that are legislated in a way that makes sense won't get resistance from Amazon. State legislation that is vague and leaves the door open for a money grab from Amazon will lose access for Amazon affiliates.

          kay
          Signature
          Saving one dog will not change the world - but the world changes forever for that one dog
          ***
          Live life like someone left the gate open
          {{ DiscussionBoard.errors[4826768].message }}
          • Profile picture of the author AUKev
            I wonder how this will play out in TN long term. I know that there is a large Amazon distribution facility (or more than one) in TN. I figured the exemption was due to the fact they employ so many people there. Amazon may play hardball and threaten to move the facility to another state if TN backs them into a corner.

            People in AL raise cain about a Hyundai factory near Montgomery that gets some pretty big tax breaks. But the facility employs over 2000 people at the plant, and add another 5000 to suppliers. The state is much better off having people with jobs, paying taxes rather than losing that to another state.
            Signature
            Lifetime Access to Seattle Clouds and BiznessApps for 1 Payment
            Android App Profits - The Definitive WSO on Profiting from Android Apps
            {{ DiscussionBoard.errors[4827354].message }}
            • Profile picture of the author TNAM
              Originally Posted by AUKev View Post

              I wonder how this will play out in TN long term. I know that there is a large Amazon distribution facility (or more than one) in TN. I figured the exemption was due to the fact they employ so many people there. Amazon may play hardball and threaten to move the facility to another state if TN backs them into a corner.

              People in AL raise cain about a Hyundai factory near Montgomery that gets some pretty big tax breaks. But the facility employs over 2000 people at the plant, and add another 5000 to suppliers. The state is much better off having people with jobs, paying taxes rather than losing that to another state.
              Kevin, since it appears that Amazon has willingly agreed to collect the tax, I can't imagine that they will play hardball. I can't wrap my head around this. They are fighting the tax tooth and nail in other states, but even though they have a free pass in TN, they decide to collect sales tax anyway, and they have pledged to add an additional 2,000 jobs and invest $350 million in the state. How strange is that? The original deal, which gave Amazon an indefinite exemption from collecting sales tax, came from former Governor Bredesen. Governor Haslam had agreed to honor the deal, but it looks like public outcry had him working behind the scenes to get Amazon to give up the deal. Three years is a long time, though, and anything can happen between now and then.

              I can understand why instate businesses want Internet retailers to collect sales tax. It's hard for them to compete with retailers who don't have to collect sales tax, because that's like giving customers a price break. At the same time, though, instate businesses don't charge shipping, and many Internet retailers do. Depending on the merchandise, shipping can be very expensive. I can't imagine why states want to force the issue when companies like Amazon have a history of just completely pulling out of a state rather than collecting the tax. That means lost jobs, which creates a ripple effect to the local and state economy. They also lose various taxes that are paid by the Internet retailer. Also, Amazon drops their affiliates in those states, so the state loses out on their share of those earnings too. Granted, TN doesn't have a state income tax like most states, but it's still less money people have to spend, which hurts the economy, even if only on a small scale.
              {{ DiscussionBoard.errors[4827681].message }}
              • Profile picture of the author AUKev
                Great info TNAM. I am betting there is another deal someplace. TN is probably quietly offering Amazon a break on property taxes, payroll taxes or some other incentive. Of course that is just the not trusting government part of me. I find it hard to believe that Amazon would give it up so easy without something in return. TN wins the PR war by settling down the complainers.

                I fear that it is only a matter of time before we have a nationwide internet sales tax across the board that has a percentage go back to the states. The big boys like Wal Mart and Home Depot have been hollering for years and it is only a matter of time before they get the right guys in Washington to sponsor and push this legislation through.
                Signature
                Lifetime Access to Seattle Clouds and BiznessApps for 1 Payment
                Android App Profits - The Definitive WSO on Profiting from Android Apps
                {{ DiscussionBoard.errors[4827799].message }}
          • Profile picture of the author TNAM
            Originally Posted by Kay King View Post

            I think many people have interpreted Amazon's actions in a few states incorrectly. My view is Amazon has refused to operate in states where the wording on a tax bill put Amazon at risk.

            Maybe state taxes that are legislated in a way that makes sense won't get resistance from Amazon. State legislation that is vague and leaves the door open for a money grab from Amazon will lose access for Amazon affiliates.

            kay
            I've been reading up on this since I heard about the newest development here in TN. Amazon only collects sales tax in five states, four of which it has a physical presence: Kansas, Kentucky, North Dakota and Washington State. It's all very confusing, but a couple of articles say that Amazon has to collect sales tax in New York in order to challenge the law. Even though Amazon is collecting sales tax in NY, it is holding it in escrow. If it eventually wins the case, it will refund the taxes back to the people who paid them. Amazon has put its warehouses and laboratories in other states under wholly owned subsidiaries of the company, but denied that the buildings amount to a physical presence. Other than the states listed above, it has dropped its affiliates and pulled out of any state that has passed legislation that would require it to collect sales tax. Recently, though, California gave Amazon a one year reprieve, during which time, they hope to get a decision in their favor at the federal level. If they don't, I'm assuming that CA affiliates will be dropped again come Sept. 2012. Like I said, to me, it's all very confusing. :confused:

            Amazon doesn't withhold income tax and social security from the money they send their affiliates, so they are private contractors, aren't they? If so, how does that create a nexus? If that's not the case, what are they considered? Are the states saying the affiliates are more like outside sales reps, thus meaning that Amazon and other retailers have a sales force in the state?
            {{ DiscussionBoard.errors[4827357].message }}
        • Profile picture of the author TNAM
          Sorry @AlexSid and @davejug1, I didn't see your posts.

          Originally Posted by AlexSid View Post

          I'm wondering if this will affect International amazon affiliate also. If so I better start ramping up all my amazon affiliate campaigns to squeeze as much money from them before they start taxing me
          I'm not familiar with the laws in other countries, so I don't know if what's going on in the US will affect other countries. Does Amazon charge sales tax in any parts your country right now? Of course, I can't imagine that there's anything wrong with ramping up your Amazon affiliate campaigns regardless of whether any of this eventually affects you.


          Originally Posted by davejug1 View Post

          Man you guys are lucky! Our sales tax in the UK (VAT) is 20%
          Wow, 20% tax!! That's crazy! Wait... Do you guys pay income tax and property tax too? If so, that's out of this world!


          Originally Posted by AUKev View Post

          Great info TNAM. I am betting there is another deal someplace. TN is probably quietly offering Amazon a break on property taxes, payroll taxes or some other incentive. Of course that is just the not trusting government part of me. I find it hard to believe that Amazon would give it up so easy without something in return. TN wins the PR war by settling down the complainers.

          I fear that it is only a matter of time before we have a nationwide internet sales tax across the board that has a percentage go back to the states. The big boys like Wal Mart and Home Depot have been hollering for years and it is only a matter of time before they get the right guys in Washington to sponsor and push this legislation through.

          Kevin, I've been wondering the same thing about the possibility of an under the table deal that allows Governor Haslam to save face. He has really taken a lot of flack over the original deal, even though he didn't make it. No matter how hard I try, I can't see any other reason why Amazon would give up such a sweetheart of a deal, not to mention investing so much in the state. There has to be something significant in it for them. I'm with you on not trusting the government. If Americans really knew what all went on behind closed doors with our politicians, we would probably all keel over dead.

          I keep wondering about the eventual possibility of a nationwide Internet sales tax too. With so many big players for it, it's probably inevitable. The tax itself should really be a moot point for customers, at least in my state. We are supposed to pay a "use" tax to the state if sales tax isn't collected by the retailers, though I'm sure few people pay it. From an affiliate standpoint, aside from having to pay sales tax on all our online purchases, I would think it would be better if there was a nationwide Internet sales tax law. If there was, there would be no reason for companies like Amazon to drop their affiliates. They would have to collect the sales tax regardless, so it would be a big win for affiliates.
          {{ DiscussionBoard.errors[4828038].message }}
  • Profile picture of the author davejug1
    Man you guys are lucky! Our sales tax in the UK (VAT) is 20%
    Signature
    FREE List Building help. Click here!

    Yes I do have freebies!

    Expertise comes not through knowledge or skills, but through practice
    {{ DiscussionBoard.errors[4826742].message }}
  • Profile picture of the author Duckyshucky
    I know it looks bad right now, but Amazon are spending a whole lot of money in order to fight this whole ordeal. Hopefully they'll be successful and can turn the situation around before 2014 is here.
    {{ DiscussionBoard.errors[4828371].message }}
    • Profile picture of the author TNAM
      Originally Posted by Duckyshucky View Post

      I know it looks bad right now, but Amazon are spending a whole lot of money in order to fight this whole ordeal. Hopefully they'll be successful and can turn the situation around before 2014 is here.
      As I said, that's the weird part. They already had a deal in place that kept them from ever having to collect sales tax in TN. They are voluntarily choosing to start collecting it. They are fighting these laws tooth and nail in every other state. It definitely doesn't make sense. Hopefully, since this is their choice, they won't dump their TN affiliates like they have in other states. I mean, really, why would they? *Keeping my fingers crossed*
      {{ DiscussionBoard.errors[4828663].message }}
  • Profile picture of the author InternetMarketingIQ
    Amazon is being hit from all angles by States trying to collect taxes.

    So at some point they have got to get themselves ready for what could be inevitable. It seems this would be as good a State as any to make sure they can adjust.
    Signature
    Internet Marketing IQâ„¢
    {{ DiscussionBoard.errors[4828933].message }}

Trending Topics