Ticking Bomb in California's "Amazon" Tax Law

13 years ago

Originally Posted by kindsvater

Almost all of the attention to California's new Internet tax law is being given to the affiliate referral provision which caused Amazon to terminate 25,000 affiliates.

Now for the really bad news...

The new law generally says this:

Sales tax is imposed and owed by any retailer according to any theory dreamed up by California that passes constitutional muster.

This includes, "but is not limited to", online retailers like Amazon that have at least $500,000 in sales to California each year with local affiliates.

Note the ramifications:

- There is NO dollar threshhold if California decides an online relationship or situation creates a tax nexus with California. Every merchant worldwide is impacted by this. Every single one.

As noted in one CA Assembly legislative analysis:

“[The California Board of Equalization] will be restrained only by its perceived probability of winning in the courts …”

- You may owe sales tax for using a California web host.

Again, CA legislative analysis noted the new law could cause retailers to abandon California web hosts to avoid paying taxes.

This potentially affects Yahoo Stores, eBay, and any other California ecommerce platforms.

The full ramifications of this are that you cannot simply look at a California statute and decide if sales tax is owed or not. If California says tax is owed you will have to litigate your factual situation in the courts.

I have a longer, more detailed analysis of the law on this blog:

California Internet Tax Law FAQ and Analysis

If there is a silver lining it is the new law is a dream 'full employment act' for attorneys

I'm sure you're as thrilled as I am.

.

I am a bit puzzled by the initial reactions to your post.
I for one appreciate this information. As a UK resident and very part time affiliate I have been concerned about the international repercussions of the US tax changes.

Do you know how this would affect Clickbank vendors (I am one)

Kenj

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kindsvater

13 years ago

Kenj, it's weird. This isn't about the Amazon terminations but a different, potentially more serious issue. The Amazon issue only affects California Warriors. This affects everyone.

Fortunately, though, there should be no affect on ClickBank vendors. The reason is the law only applies to sales of physical products. Not digital products ClickBank sells.

.

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Dan C. Rinnert

13 years ago

Originally Posted by kindsvater

This affects everyone.

Where is that discussed? Maybe I'm overlooking something, but I only see potential sales taxes for businesses with affiliates in California or hosting their websites through a California provider.

I'm not seeing where a company with no affiliates and using webhosting outside of California might have to collect sales tax.

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kindsvater

13 years ago

Originally Posted by Dan C. Rinnert

I'm not seeing where a company with no affiliates and using webhosting outside of California might have to collect sales tax.

You're right Dan. If you have no California connection. No Google. No Yahoo. No eBay. No Facebook.

Heck, no sales to anyone in California. Sales tax issues do not have a lot of case history, but California just asserted itself to collect sales taxes to the same extent it exercises jurisdiction for other legal issues - and that is really broad.

Add in not having a .com or .net domain, because the official registry for .com and .net domains is Verisign, which is based in Silicon Valley, and one court has already held this constitutes a property interest in California that can be seized and which California courts have jurisdiction over.

.

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Dan C. Rinnert

13 years ago

Originally Posted by kindsvater

Add in not having a .com or .net domain, because the official registry for .com and .net domains is Verisign, which is based in Silicon Valley, and one court has already held this constitutes a property interest in California that can be seized and which California courts have jurisdiction over.

Didn't Verisign move out of Silicon Valley to Virginia?

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Bill Farnham

13 years ago

Originally Posted by Dan C. Rinnert

Didn't Verisign move out of Silicon Valley to Virginia?

Verisign North America Offices

Worldwide Headquarters
350 Ellis Street
Mountain View, CA 94043

~Bill

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AnitaCross

13 years ago

Originally Posted by Ducksauce

What are the 6 states please?

I thought it was four...

In any event, I live in one of them: Oregon.

Montana is another one. (I have a friend living there, only reason I know of them.)

Originally Posted by weblink29

Isn't it the states argument that Amazon affiliates are "salesmen" for Amazon located in California and therefore sales tax is due on the sales?

If that's their argument maybe it's worth pursuing. I'd love to see them back peddle with 25,000 people filing for unemployment for lost income

I was thinking the same thing.

The truth is all affiliates are indepedent from the entity they are sending traffic to. The only way they would be entitled to unemployment insurance is if they paid into unemployment along with their taxes. Then they would still have to qualify by being unemployed. So if an affiliate has a job and was doing this on the side, they wouldn't qualify anyway...

Originally Posted by Kay King

... Reports are that a couple states who passed these laws early on are now considering repeal.

Odd that so many other states are now talking about adding this tax law even though states who did so aren't reporting increased revenue.

It amazes me how many of these politicians have college degrees, but can't comprehend anthing which is counter-intuitive.

Decades ago, then President John Kennedy spoke at a luncheon (I think they were accountants,) where he stated that you raise taxes to slow down an economy and lower taxes to stimulate it. Not an exact quote but close enough. (I actually heard the audio recording on a radio show a number of years back.)

The more money the politicians think they need, the more they should lower our taxes. The more money we individuals have, the more we tend to spend, which usually results in more people being employed and, you guessed it, paying taxes!

By attempting to force internet businesses to collect and pay state sales taxes, these states are creating the opposite of what they intend. Which explains why states that adopted new tax laws early on are considering repealing those laws

Regardless, we should fight any attempt by the federal government to get involved with a sales tax. No matter what their role starts out to be, you can count on them to morph it into something else entirely. Then it won't be long before we are paying state sales taxes AND federal sales taxes...

That means everyone will have less money to spend, and fewer sales for marketers, online and off.

Damn. I'm depressing myself!

I think I'll go crack open that bottle of wine that's been chilling in the fridge for the past month. Yeah. That should help... :rolleyes:

-Anita

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Dan C. Rinnert

13 years ago

Originally Posted by Bill Farnham

Originally Posted by Dan C. Rinnert

Didn't Verisign move out of Silicon Valley to Virginia?

Verisign North America Offices

Worldwide Headquarters
350 Ellis Street
Mountain View, CA 94043

I think that is VeriSign Authentication Services, now owned by Symantec. Verisign sold Symantec their authentication services division along with their offices in Mountain View.

For Verisign, which is the registry for .com and .net, and is not owned by Symantec, this is what I see on their website:

NORTH AMERICA OFFICES

Verisign Worldwide Headquarters
21355 Ridgetop Circle
Dulles, VA 20166

Washington, DC
1666 K Street
Washington, DC 20006

As far as I can tell, Verisign is no longer in California. Even their datacenters are now in Virginia and Delaware.

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Kay King 13 years ago

You should post this in one of the many threads already being discussed on this topic. I grow weary of seeing this same post rehashed a dozen times a day.

You are wrong - this is a different issue. I posted some very relevant NEW info in one of the existing threads yesterday and the posts that followed were proof that the threads had degenerated into posting by those who had not read the thread at all.

This is new information - and quite different than what was posted in other threads.

Brings up the question of how long before Cali needs another bailout, doesn't it? "I cut off my nose - could I have a new one, please?"
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- guitarjosh 13 years ago
  
  Originally Posted by Kay King
  
  You are wrong - this is a different issue.
  
  lol.. okay kay. if you say so.
  
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Sumit

13 years ago

Originally Posted by kenj

I am a bit puzzled by the initial reactions to your post.
I for one appreciate this information. As a UK resident and very part time affiliate I have been concerned about the international repercussions of the US tax changes.

Do you know how this would affect Clickbank vendors (I am one)

Kenj

I wonder same if tax people keep on rampaging on affiliates like this then I think affiliate marketing will no longer be like being free soul

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Alan Petersen

13 years ago

Originally Posted by kindsvater

]

If there is a silver lining it is the new law is a dream 'full employment act' for attorneys

I'm sure you're as thrilled as I am.

.

As usual attorneys always win in these deals (on both sides). No wonder so many are in the legislatures. Drumming up business.

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Stephen Adams

13 years ago

random thought here, as I am not affiliated with Amazon at all, but this somewhat seems like Amazon has "laid off" 25,000 affiliates, which means these 25,000 affiliates are eligible to apply for unemployment. Am I right?

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timpears

13 years ago

Originally Posted by scuba

random thought here, as I am not affiliated with Amazon at all, but this somewhat seems like Amazon has "laid off" 25,000 affiliates, which means these 25,000 affiliates are eligible to apply for unemployment. Am I right?

As a business person, they typically would not be paying the unemployment insurance on their selves. Therefore, no coverage.

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jmartinez

13 years ago

Originally Posted by scuba

random thought here, as I am not affiliated with Amazon at all, but this somewhat seems like Amazon has "laid off" 25,000 affiliates, which means these 25,000 affiliates are eligible to apply for unemployment. Am I right?

I don't think unemployment applies to the self employed. That is just a guess since this isn't an area of my expertise...

By the way if 25,000 affiliates have been dumped due to this that sounds newsworthy. Someone should contact a few local news stations and fill them in. It won't change anything but at least people will know what is going on.

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GirlyGurl

13 years ago

Originally Posted by scuba

random thought here, as I am not affiliated with Amazon at all, but this somewhat seems like Amazon has "laid off" 25,000 affiliates, which means these 25,000 affiliates are eligible to apply for unemployment. Am I right?

No. Affiliates are not employees.

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weblink29

13 years ago

Originally Posted by scuba

random thought here, as I am not affiliated with Amazon at all, but this somewhat seems like Amazon has "laid off" 25,000 affiliates, which means these 25,000 affiliates are eligible to apply for unemployment. Am I right?

Originally Posted by GirlyGurl

No. Affiliates are not employees.

Isn't it the states argument that Amazon affiliates are "salesmen" for Amazon located in California and therefore sales tax is due on the sales?

If that's their argument maybe it's worth pursuing. I'd love to see them back peddle with 25,000 people filing for unemployment for lost income :rolleyes:

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Kay King 13 years ago

Just reread Brian's comments and the "physical products" aspect is a point I missed. Guess that would eliminate the CPA thought I had.

Not going to play their game.

Maybe that's Amazon's view as well. Reports are that a couple states who passed these laws early on are now considering repeal.

Odd that so many other states are now talking about adding this tax law even though states who did so aren't reporting increased revenue.

kay
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timpears

13 years ago

Lets see how California is going to enforce their laws on a Washington corporation. If I was Amazon, I would just say, go to hell.

These states that are doing this are just cutting their noses off to spite their face. It is going to cut their tax revenues, not add to them. The unintended consequences of these actions is that their residence will earn less money and therefore pay less income tax if their state has an income tax, which most do.

Typical short sighted politicians though.

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kindsvater

13 years ago

Originally Posted by timpears

Lets see how California is going to enforce their laws on a Washington corporation. If I was Amazon, I would just say, go to hell.

Tim, I had a case earlier this year and a Washington corp made that type of claim. Asserted it had no business, offices, employees, etc., in California, and argued the CA based lawsuit against it had to be dismissed.

It lost. Then paid money.

.

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sherrieb

13 years ago

Originally Posted by kindsvater

Tim, I had a case earlier this year and a Washington corp made that type of claim. Asserted it had no business, offices, employees, etc., in California, and argued the CA based lawsuit against it had to be dismissed.

It lost. Then paid money.

.

How did the court get jurisdiction? Was it not challenged?

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Kay King

13 years ago

Brian -

Would be interested to hear what you think about this latest wrinkle.

I was watching the cable news coverage on this Cali-Amazon story today. By the time I saw the second news network coverage I had a vision of a huge boot (not a little shoe) that might drop sooner rather than later.

When I see coverage that is similar in wording about a story like this - I know someone's being fed info somewhere.

The take was that the state battles may be so "disruptive" that "what we may need is a federal sales tax that would apply to online sales in all states".

Sounded like a carefully poised boot to me.

kay

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sherrieb

13 years ago

Originally Posted by Kay King

Brian -

Would be interested to hear what you think about this latest wrinkle.

I was watching the cable news coverage on this Cali-Amazon story today. By the time I saw the second news network coverage I had a vision of a huge boot (not a little shoe) that might drop sooner rather than later.

When I see coverage that is similar in wording about a story like this - I know someone's being fed info somewhere.

The take was that the state battles may be so "disruptive" that "what we may need is a federal sales tax that would apply to online sales in all states".

Sounded like a carefully poised boot to me.

kay

Ditto.

Amazon actually favors a federal tax in one of the letters I read somewhere.

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kindsvater

13 years ago

Originally Posted by Kay King

The take was that the state battles may be so "disruptive" that "what we may need is a federal sales tax that would apply to online sales in all states".

Sounded like a carefully poised boot to me.

It's interesting. But what about the states that do not have a sales tax? Are their residents going to be forced to pay a federal sales tax?

Is it much different than a VAT?

Bear with me Kay, because I am about to be REALLY DISRUPTIVE ...

Looking at this part of the new law to whom sales tax applies:

"Any retailer entering into an agreement or agreements under which a person or persons in this state, for a commission or other consideration, directly or indirectly refer potential purchasers of tangible personal property to the retailer"

This likely covers California based Commission Junction and the Google Affiliate Network.

Nothing says the contract has to be "with" an affiliate. Just that contracts are entered into "under which" someone in California "directly or indirectly" generates referrals.

CJ and GAN most certainly "directly or indirectly" refer customers to merchants. Not only through their affiliates, but also via their websites which are the last 'stop' before the merchant's site. In return they get paid.

Acme enters into a contract with CJ/GAN for network referrals to their site. CJ even has its own affiliate websites (wonder if they terminated themselves?) In return CJ/GAN is paid. The CJ/GAN contracts state California law applies, and transactions and visitors are being routed through these California entities.

It may not do any good to terminate California affiliates if the California affiliate networks are used to create sales tax liabilities.

The full ramifications of this new law are still unknown. But if CJ/GAN are hit CA lawmakers may rejoice at their jackpot. For the rest of us - disruptive.

A New York merchant using CJ, and a Florida affiliate refer a sale to a San Diego buyer. The NY merchant is not going to be happy to hear they still owe a CA sales tax even after they terminated the CA affiliates in the CJ program.

.

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timpears

13 years ago

Originally Posted by kindsvater

Tim, I had a case earlier this year and a Washington corp made that type of claim. Asserted it had no business, offices, employees, etc., in California, and argued the CA based lawsuit against it had to be dismissed.

It lost. Then paid money.

.

That is really odd as the Supreme Court has ruled on this back in 1992 I think. That is almost before the internet started, but what ever.

The reference I found, after seeing a story on this on the news. The Taxation of Online Sales - Internet Sales Tax Exemption - e-commerce That is why they are dropping affiliates.

So your client got screwed in my mind. But I am not a lawyer and that is not the only thing that I don't understand about the courts.

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kindsvater

13 years ago

Originally Posted by timpears

So your client got screwed in my mind. But I am not a lawyer and that is not the only thing that I don't understand about the courts.

Actually, my client won and was paid. In 20 years I do not believe I have seen a California judge grant a defendant's jurisdiction challenge.

That's the problem. Creative lawyering can find ways to establish jurisdiction. Now you have the state of California asserting the same for imposing sales tax.

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myob 13 years ago

Doesn't anyone in California pay the required sales tax on all their internet purchases? Didn't think so.
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cyberws 13 years ago

"By the way if 25,000 affiliates have been dumped due to this that sounds newsworthy. Someone should contact a few local news stations and fill them in. It won't change anything but at least people will know what is going on. "

This is all over Fox, for one - the CA war with Amazon is getting all kinds of national coverage. I hope Amazon + eBay and others up and leave the state so that other parts of the country may hopefully be wiser and leave Net commerce alone. There are now six states with Internet taxes and politicians being as stupid as they are, I figure the future of affiliate marketing is dim.
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timpears

13 years ago

Originally Posted by kindsvater

Actually, my client won and was paid. In 20 years I do not believe I have seen a California judge grant a defendant's jurisdiction challenge.

That's the problem. Creative lawyering can find ways to establish jurisdiction. Now you have the state of California asserting the same for imposing sales tax.

Oh, I misread your post then. So good, a win for us little guys.

It is often not about who is in the right, but who has the highest paid lawyers.

My granddaughter just graduated from high school with her AA, and she has indicated she wants to go on to law school. Can't say I was thrilled with that, but I wish her the best.

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MichaelHiles

13 years ago

This is the part that I don't understand.

The collection and payment of sales tax is done so by a merchant as an AGENT working on behalf of the state. It's actually the end user purchaser who has the liability, which is why in many states the state income tax return has a section for people to voluntarily disclose their tax liability for out of state purchases.

Not that very many people volunteer this info mind you.

But that being the case, how can a state court assert such agency status jurisdiction over a corporation that has no organized and filed articles of organization within that political subdivision?

The business doesn't actually have the tax liability, the buyer does.

That's the part that I'm missing.

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noble 13 years ago

Originally Posted by MichaelHiles

The business doesn't actually have the tax liability, the buyer does.

That's the part that I'm missing.

That's what the law changes. The business now must collect (or take from their own pocket) these taxes and pay them.
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- MelKryger 13 years ago
  
  Hello all.
  I am... er... was an Amazzon affiliate. As an affiliate, I do not hold inventory, manage prices, process sales or really anything but market some other store's product. I am not buying or selling anything. I am redirecting the buyer from my site, which contains what is basically an ad for a product (pic + copy with link embedded), to wherever the product really is being sold at. I do not use a shopping cart or have a merchant account for payment processing... that is all done at the site I referred the buyer to. I get paid a commission for the referral. My websites are just giant versions of an ad. I understand how an Online vendor based in Ca would be affected by this new law, as they are actually doing the selling of the item & collecting a payment, whereas the affiliate is merely redirecting the buyer to the vendor from a really well designed ad (blog/item review/etc...). I, as an affiliate, have to pay income tax on any commissions earned.
  I do not understand how or why the affiliate is responsible for collecting sales tax.:confused:
  I do, however agree with the way Amazon, and probably others, are dealing with this: by dropping us. Even though this essentially "lays me off" from this type of online business, the market itself would soon do that to me anyway.
  I say this because the end user (buyer) wont buy something from an on line link that requires sales tax vs the same product from the same vendor found at Amazon without the sales-tax-causing-affiliate-commission-earning-link. Buyers are smart, when they get hit with a Ca sales tax item... they will search again until they find it without the BS... and they will find it. They wont be "had" by California's greedy politicians.
  The really horrible part is the LOSS to us marketers of our time and investment into these properties. SEO aint easy. So what do we do now? Take down our sites and reconfigure them for something else? Do we put our sites up on Flippa? Hey marketers in other states: STEP UP YOUR GAME -NOW IS THE TIME!! There is a 25,000 affiliate "Hole" in the market....
  What is up with Ca??? This law will not bring in revenue. It will lose revenue. 25,000 citizens are now going unemployed... they will not pay income tax on profit they cant earn, they will not support economy with the money they didn't earn, they wont pay any sales tax on items they couldn't afford to buy. Where out here (Ca) can a job be gotten?
  It is all bad.
  Real Bad.
  
  Warrior Mel -out.
  
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  GirlyGurl 13 years ago
  
  Warrior Mel, I totally agree. We are Marketers!!! I think of the affiliate links on my site as advertising, because, well thats what it is. No reason a marketer should collect tax for the company it is promoting.
  
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  nohype 13 years ago
  
  This is a lose-lose solution in California. As a previous 'east-coast' guy, living here in Callie for 20 yrs. Im ready to move! California definately has its head up its you-know-what! This brings up bigger issues of 'taxing the internet'. I agree with the post above. I am only an affiliate. I have been in sales/independent contractor (offline for over 25 years). I have NEVER had to pay a sales tax for customers I've signed up for services or products. The sales tax is charged by the provider of that product? Makes no sense.?
  
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HelpingYouBeAnExpert

13 years ago

It's normal what is happening it's happened 1000 times in the past the state spends money and only a few % of the population are productive so they have to tax them more this goes on until default then we start over. This is a normal cycle and nothing you or I can do about it.

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Ducksauce

13 years ago

What are the 6 states please?

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greenowl123 13 years ago

For all the affiliates in CA, and the other states, NC, IL, etc.

Replace all your Amazon affiliate links to other affiliate programs like Home Depot, Walmart, Sears and Overstock.

There are also other retailers affiliate programs on CJ.com, Google affiliate network and Linkshare.com

You can still have your sites monitized with adsense too. Look into what CPA offers might convert for your sites also.

Maybe sell an ebook too ? All my sites have at least 2 forms of monetization, adsense and amazon, and some have 4 or 5, with clickbank, cpa, and an ebook related to the niche.

Just throwing some ideas out there...

Adapt and overcome !
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tess47

13 years ago

Due to the tax laws and changes, I can no longer be an Amazon affiliate in the state that I live in, received an e-mail from Amazon about two weeks ago. I just thank the Lord that this wasn't a major source of income for me!

It seems that when you're successful they're going to get you from one direction or another

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Chris Sorrell 13 years ago

Very harsh and unfair. Perish the thought people may try and earn some extra money from home.

If you wanna stick around with Amazon though, just set your sites on doing it through Squidoo as you'll get paid through them into your paypal account. If you've already got niches and what not ready to go it's a pretty quick setup to get back on your feet.
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Kay King

13 years ago

It's interesting. But what about the states that do not have a sales tax? Are their residents going to be forced to pay a federal sales tax?

Is it much different than a VAT?

I'm not the lawyer in the room but I wondered if this would be a tax imposed on states or rules for enforcing such a tax for states who choose to enact it.

My guess (cynical hat here) is it would be accompanied by a federal rider tax in some way or open to creation of one for "administration and enforcement".

This may be a reach - but couldn't that CA law wording be stretched to cover things like CPA? Several articles I read on legal sites mentioned these nexus taxes as an end run around the Supreme Court decision of '92 or '93 so interesting to see that mentioned.

kay

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timpears

13 years ago

Originally Posted by Kay King

This may be a reach - but couldn't that CA law wording be stretched to cover things like CPA? Several articles I read on legal sites mentioned these nexus taxes as an end run around the Supreme Court decision of '92 or '93 so interesting to see that mentioned.

That is what I am thinking too. I am surprised that Amazon hasn't been more aggressive on this. Obviously they have a legal department. Why have they not claimed this SCOTUS decision of '92 instead of dropping the associates.

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CDarklock

13 years ago

Originally Posted by kindsvater

Sales tax is imposed and owed by any retailer according to any theory dreamed up by California that passes constitutional muster.

New policy: "Not available in California."

Problem solved. You're in California? You can't buy.

Most of my customers are non-US anyway.

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"The Golden Town is the Golden Town no longer. They have sold their pillars for brass and their temples for money, they have made coins out of their golden doors. It is become a dark town full of trouble, there is no ease in its streets, beauty has left it and the old songs are gone." - Lord Dunsany, The Messengers

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David McKee

13 years ago

Originally Posted by kindsvater

- You may owe sales tax for using a California web host.

Again, CA legislative analysis noted the new law could cause retailers to abandon California web hosts to avoid paying taxes.

This potentially affects Yahoo Stores, eBay, and any other California ecommerce platforms.

The full ramifications of this are that you cannot simply look at a California statute and decide if sales tax is owed or not. If California says tax is owed you will have to litigate your factual situation in the courts.

All I have to say is: I live in North Carolina, so if California says I owe taxes they are going to get a big FU from me - come and get me!

Idiots. Not going to play their game.

-DTM

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Justin Newcastle

13 years ago

This happened in Connecticut too... they shut me down.

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shmeeko69

13 years ago

It would appear that being an affiliate in the state of California is as much use a an ashtray on a motorbike.

These new tax laws suck for internet marketers in this area and I guess will be a mass exodus shortly.

Mark

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Sam England

13 years ago

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MelKryger

13 years ago

Hey All,
I stated this above, but here I am simply rephrasing it as a question:

If I am an affiliate marketer, and my sales medium is a comprehensive redirect from buyer to vender, for which I am compensated some miniscule percentage and do not actually make or process the sale... then how am I liable for collecting a sales tax?

I view my entire Amazon affiliate business websites as my own personally rented (domain+hosting fees) billboards(websites) where I display ads (affiliated links) for vendors (money collector/product giver) to potential buyers (money giver/ product receiver). I "intercept" the buyer and charge the vendor a small amount for the referral. :rolleyes:

I do not make or process sales... so...
HOW CAN I CHARGE FOR TAX??
...I do not collect and process sales...I do not have a payment processor!
so again I ask:
HOW CAN I CHARGE FOR TAX??
...Affiliates are not Vendors...

---Really I am puzzled by this...:confused:

-- Does the Sunday paper collect sales tax from anything I went out and purchased after seeing their Ad? -No, they don;t, although they were compensated for the referral! -- There is a lesson here:

"Ads" do not get taxed like a referral link (because they are paid up front? whether they drive sales or not?)... hmm...

...I need to find companies that sell the items I used to affiliate-referral link to, then "rent out ad-space" for the EXACT SAME PRODUCTS (or similar) that I previously had as an affiliate link (which I view as an ad that you only get paid when it works)... or ... just sell my sites...

Thanks for reading what I have to say.
Mel.

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2 replies

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AnitaCross

13 years ago

Originally Posted by MelKryger

If I am an affiliate marketer, and my sales medium is a comprehensive redirect from buyer to vender, for which I am compensated some miniscule percentage and do not actually make or process the sale... then how am I liable for collecting a sales tax?

The state is not asking the affiliates to pay the tax.

The state is saying that Amazon (and other retailers like Amazon) are responsible for collecting CA sales tax on all orders from CA residents.

If they do not have affiliates in CA, they do not have to collect the sales tax.

That's the short of it, but the link in the OP goes into more detail, and outlines other--scary--issues. Well worth the read.

-Anita

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thriftgirl62 13 years ago

[DELETED]

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CDarklock 13 years ago

Originally Posted by MelKryger

HOW CAN I CHARGE FOR TAX??

You don't. When required, the person who makes the sale collects the tax, then sends it to the appropriate state.

In general, you have to do this where you have employees.

The states are trying to change this and make it applicable to independent contractors.

Which would include affiliates.

Right now, they're leaning heavily on huge companies that have an army of affiliates.

But once they've set this particular precedent, they can start doing stupid things like saying "you paid a designer in California $47 in September, so you owe us sales tax on every sale you made to a customer in California all year."

The ultimate goal is to make YOU collect and file state sales tax for EVERY STATE THAT HAS ONE if you ever collect any money from anyone for anything.

And that's why you should care. Because they want you to file taxes 200 times a year.
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"The Golden Town is the Golden Town no longer. They have sold their pillars for brass and their temples for money, they have made coins out of their golden doors. It is become a dark town full of trouble, there is no ease in its streets, beauty has left it and the old songs are gone." - Lord Dunsany, The Messengers
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MelKryger

13 years ago

I DID NOT UNDERSTAND IT CORRECTLY!!

I do now... THANKS AnitaCross.

-Mel

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zenmack

13 years ago

I live in Cali and my girlfriend just got her notice and so has my son. I probably got mine and just deleted them without reading cause I get a ton of IM marketers emails all the time.

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David McKee 13 years ago

Go to this thread: http://www.warriorforum.com/main-int...ifornia-7.html

...and read about the site "SkimLinks" - you can be back in business in a day.

-DTM
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Ticking Bomb in California's "Amazon" Tax Law

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