State of Texas and Amazon

30 replies
Just heard on the afternoon news here in Texas that

"The State of Texas" wants $269 million dollars in taxes

it says Amazon should have collected. Amazon is disputing

the claim based on how did the State arrive at these numbers.

Not sure what this means for us marketers at this time here in Texas.

Robert Oliver
#amazon #state #texas
  • Profile picture of the author tritrain
    Wow! Texas was one of the last states that I would have expected to try for that Nexus tax crap.

    Fight it while you can. Contact your state rep and governor and tell them how this will effect your livelihood.
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    • Profile picture of the author salegurus
      Oh Great
      Say goodbye if you are an Amazon affiliate in TX
      F&%#$$@ politicians
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      • Profile picture of the author Robert Oliver
        Not a pretty picture at this time for us Texas

        Amazon affiliates. Really sucks.

        Major budget cuts in education and other programs,

        but less important programs seem to survive and then

        they go and pull this crap. I guess I know Amazon's next move.

        Robert Oliver
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        • Profile picture of the author Robert Oliver
          Well,

          It looks like Amazon is closing the gigantic warehouse facility

          in Texas laying off an undisclosed number of employees. Just what

          the economy needs at this time. Let's all stand up and clap for the

          State of Texas for these actions.

          Robert Oliver
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        • Texas big time in debt like other states....they need some money
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  • Profile picture of the author Ofthemix
    This is just depressing.
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  • Profile picture of the author 1960Texan
    Originally Posted by Robert Oliver View Post

    Just heard on the afternoon news here in Texas that

    "The State of Texas" wants $269 million dollars in taxes

    it says Amazon should have collected. Amazon is disputing

    the claim based on how did the State arrive at these numbers.

    Not sure what this means for us marketers at this time here in Texas.

    Robert Oliver
    Yeah, the writing is on the wall. I've made a little being an Amazon affiliate but I haven't put much effort into it because I saw this coming. I don't remember the exact post, but about 2 years ago I saw someone in another state mention here that they were losing a six figure income with Amazon because of a similar situation. At that time I was just getting started with Amazon and knew that it was going to happen sooner or later.

    Now, if I'd been plugging away at it and had anything of consequence to lose, I'd be looking real hard at setting up an LLC and an office in Delaware right now. In fact, it might not be a bad idea for a group of warriors to get together, pool their resources, and rent office space. You get a broom closet sized office with ten different people splitting the rent and it would be pretty affordable, no matter what the cost per square foot of office space in Delaware.

    Will
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    • Profile picture of the author Lee Murray
      Originally Posted by 1960Texan View Post

      Yeah, the writing is on the wall. I've made a little being an Amazon affiliate but I haven't put much effort into it because I saw this coming. I don't remember the exact post, but about 2 years ago I saw someone in another state mention here that they were losing a six figure income with Amazon because of a similar situation. At that time I was just getting started with Amazon and knew that it was going to happen sooner or later.

      Now, if I'd been plugging away at it and had anything of consequence to lose, I'd be looking real hard at setting up an LLC and an office in Delaware right now. In fact, it might not be a bad idea for a group of warriors to get together, pool their resources, and rent office space. You get a broom closet sized office with ten different people splitting the rent and it would be pretty affordable, no matter what the cost per square foot of office space in Delaware.

      Will
      Will, I couldn't agree more. There are 50 states. Texas is pretty cool. I used to live there myself (Austin). But if the Amazon Associates program is putting food on a Texas family's table, then perhaps they'd be just as happy becoming a Delaware family. Colorado is really nice this time of yea... oh wait.

      Seriously, it's something worth considering.
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    • Profile picture of the author crennyw
      all you really need do is get a local business that has post office type of boxes, you can call it a "suite" and you get a street address. That should be good enough, just, then you have a business and owe taxes in that state...
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  • Profile picture of the author BlondieWrites
    I wonder what effect this will have on Kindle publishing and Create Space. If they shut down affiliates in Texas over this, could it also crash our opportunies to get revenue from Kindle books and Create Space?

    Isn't it North Carolina that Amazon shut down the affiliate program on in the past over tax issues with that state? I wonder how things are for NC as far as Kindle and Create Space go....


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  • Profile picture of the author Rich Kent
    This is depressing. I've been thinking of building some Amazon sites, but may have to rethink that until after the dust settles.
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    • so does this mean that amazon affiliate's who reside in the state of texas should start looking else where ?

      Please say no as I have just starting seriously getting into promoting amazon and actually making some decent money ...........
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  • Profile picture of the author mreyn
    I'd be interested in knowing also. I was going to order a couple of products on the forum, but now I'm thinking I should wait. Any new info for Tx?
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    • Profile picture of the author myob
      I've been watching this closely, because similar action is going on in California. The fact that Amazon has such a huge distribution center in Texas is a big plus, and has enabled them to pull off what appears to be a bluff by threatening to close down. The Texas governor intervened saying "this may be a mistake", and the legislature is frantically crafting some new rules to keep Amazon from leaving.
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  • Profile picture of the author mydream247
    man this sucks, I finally figure out how to make money with amazon, and Texas pulls this crap, what happened to all the money from the lotto, guess to many trips to Vegas has finally caught up.
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  • Profile picture of the author website12
    Banned
    It means texas might be next one kicked off amazon affialte list.
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    • Profile picture of the author myob
      Originally Posted by website12 View Post

      It means texas might be next one kicked off amazon affialte list.
      Not likely; the governor has not agreed to sign the bill. As I mentioned the state legislature is also now frantically trying to keep Amazon from shutting down their huge distribution center and leaving Texas for Tennesee or other "ecommerce friendly" states. In addition, states such as North Carolina and Rhode Island are reviewing the Nexus Law and it may be up for repeal because of its devasting economic consequences. They now know that Amazon is not just bluffing.
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  • Profile picture of the author kurtistb
    I guess there is one benefit to actually living in Delaware. I guess I am safe being an amazon affiliate who happens to reside in Delaware but having a sizable portion of my meager earnings earned through amazon I do keep an eye on whats going on. All I can say is that you should contact your state rep to exert what little pressure us common folk can, hopefully it will be enough.
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  • Profile picture of the author Steve Faber
    Thankfully, I live in Washington State, where Amazon is not likely to leave any time soon. Unfortunately, I do relatively little with Amazon, although it has been growing lately. I have made enough to buy a nice tennis racket.

    What I do worry about is when other companies start, ah, reviewing, their affiliate programs, which we all know is coming sooner, rather than later. Sure we can all rush off and create our own products, and I have.

    The fact remains though, that I make far more from affiliate programs at this point, and I have about 15 websites and blogs all monetized primarily with affiliate programs. Redoing it all would make "pain in the ass" not even begin to apply.
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  • Profile picture of the author lisakleinweber
    Now, if I'd been plugging away at it and had anything of consequence to lose, I'd be looking real hard at setting up an LLC and an office in Delaware right now. In fact, it might not be a bad idea for a group of warriors to get together, pool their resources, and rent office space. You get a broom closet sized office with ten different people splitting the rent and it would be pretty affordable, no matter what the cost per square foot of office space in Delaware.
    When this first happened in Hawaii and ... another state, I forget which one, a man with a sizeable chunk of his income coming from Amazon set up a virtual corporation in Las Vegas - which means his corporation was licensed in vegas and he hired a company to open his mail and answer his phone there. I think it cost him something like $200 a month.

    He wrote about it online. I paid close attention because I lived in Hawaii at the time. Luckily, the governor did not sign the bill in Hawaii and although I was booted from the affiliate program I was allowed to rejoin.
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  • Profile picture of the author Tsnyder
    What I don't get about Amazon is that this really isn't
    that big a deal. Network marketing companies have dealt
    with this issue for years.

    Collecting and remitting sales tax is not a complicated thing.
    Amazon is just being stubborn... they may stubborn themselves
    out of the game.
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    • Profile picture of the author myob
      Originally Posted by Tsnyder View Post

      What I don't get about Amazon is that this really isn't
      that big a deal. Network marketing companies have dealt
      with this issue for years.

      Collecting and remitting sales tax is not a complicated thing.
      Amazon is just being stubborn... they may stubborn themselves
      out of the game.
      Amazon is not the only company fighting this. The volume of sales makes it prohibitively expensive for compliance; as it is far more cost effective just to drop affiliates to eliminate this tax liability. Many such states also have variable tax rates depending on the county, which in fact does make it quite complicated.

      Besides, customers are already required to add sales tax for all online purchases when filing their state income tax. Are you paying your fair share of state online "use tax"? Didn't think so.
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      • Profile picture of the author Tsnyder
        Originally Posted by myob View Post

        Amazon is not the only company fighting this. The volume of sales makes it prohibitively expensive for compliance; as it is far more cost effective just to drop affiliates to eliminate this tax liability. Many such states also have variable tax rates depending on the county, which in fact does make it quite complicated.

        Besides, customers are already required to add sales tax for all online purchases when filing their state income tax. Are you paying your fair share of state online "use tax"? Didn't think so.
        The issue is no more complicated than having the right software.

        If I'm not mistaken, Amazon has a facility in the state of Texas.
        If that's true how do they figure they aren't responsible for collecting
        and remitting sales tax on purchases made by Texas residents?
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        • Profile picture of the author myob
          This is the issue; the state of Texas is billing Amazon retroactively for $290 million in back retail sales taxes. Similar action is being pursued by other nexus tax states. Amazon does have a large distribution center in Irving, Texas. And they do pay their state corporate income tax.

          By simply dropping all affiliates and abandoning the distribution center in Texas and in all other nexus tax states will not affect Amazon sales in those states at all. It is a simple solution for Amazon if pressed, and they have already proven they're not bluffing. People will still buy, but since there would be no affiliate "presence" the states will not have any sales tax revenue. The existing nexus tax states are at a net loss economically and some are actively considering repealing it.

          Technically and legally, state sales taxes should have been paid by the purchasers, not by Amazon. The tax law is already on the books that online buyers pay their own sales tax. Just because this sales tax cannot be enforced should not be of any concern or responsibility for Amazon, as so goes their argument.
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  • This is not good as I just got a WSO that will help me set up my Amazon blog and be profitable in 2 weeks. I live in Texas, and I really hope that Amazon finds a solution to this. At the rate that Amazon is growing, I would love to take a piece of the pie.
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    • Profile picture of the author TheCG
      A foreign LLC or corp, local phone number (to that same state) which can easily be gotten through a variety of providers and a local mailing address (again, a service that can be gotten through one of several sources) should easily solve issues for anyone in any state that Amazon decides to jet from.

      Total cost should be less than $200 a year, depending on the state you pick.
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  • Profile picture of the author GeorgeReed
    oh this is getting bad, these politicians are getting desperate to raise some midterm campaign dollars....probably running out of big business cash so resorting to extortion of the everyman. Not Nice.
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  • Profile picture of the author Zeus66
    I live in TX and have been earning a decent income from Amazon for many years now. I keep up with this pretty closely and it appears at this point that TX sees the writing on the wall and is going to blink first. I sure hope so. It would suck to have to find an alternative and replace probably 1,000 pages of content (at least) with some other affiliate links. Yikes.
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  • Profile picture of the author HeySal
    If I were making 6 figures - or even a highly healthy 5 figures from Amazon and my state decided to pull this one off, I would not have one whit of a problem with contacting my legislator and telling them I will move if it goes through and they can kiss every other tax I do pay there - and all the other money I spend consuming in the state - a happy and hearty farewell.
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  • Profile picture of the author Mike McAleer
    This sucks. I don't see how Amazon can just shut off affiliates from certain states.

    Really sucks for you guys.

    That is why I think I will hold off on Amazon sites.
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