Jan
21
2012
2

#rsrh What the Indiana/Amazon.com deal means – and doesn’t mean.

Came across this article via Hot Air on Indiana and Amazon.com coming to an agreement on collecting sales tax – short version; Amazon.com will start being liable for collecting sales tax in Indiana in 2014, or when federal legislation is passed, and not a moment before – and I was struck by the lack of information in it.  Specifically, on why Amazon.com was going along with this in the first place.  Generally speaking, Amazon.com‘s response to having individual states (they’re actually supportive of a federal program to straighten out state sales tax schemes) try to force it to collect sales tax is to refuse: it has a Supreme Court decision (Quill Corp v. North Dakota) that has established that companies do not need to collect states sales tax in states where they do not have a physical presence, and recent state legislative attempts to define ‘local online affiliates’ as ‘physical presence’ simply results in Amazon.com ending its affiliate programs in those states*.

So I looked it up… and it turns out that Amazon.com has a legitimate physical presence in Indiana (distribution centers); it had negotiated an agreement in 2007 with the state government to not be liable for collecting sales tax anyway.  Somebody sued over that, and Amazon.com has apparently decided that it might not win that particular lawsuit… so it made a deal where it will start being liable for sales tax collection a couple of years down the road.  All of which probably should have been in the story from the beginning, huh?

I shouldn’t complain: the inability of supposedly trained professionals to actually report the news has been a great personal boon to me and mine.  But it still bemuses, sometimes.

Moe Lane

Full disclosure: I am an Amazon.com Affiliate for Maryland.

*Except in New York, where they’re still fighting it in the courts.

Sep
10
2011
6

California caves on Amazon tax. For now.

The can has been kicked for another year.

Lawmakers on Friday sent Gov. Jerry Brown a compromise bill that delays California’s effort to force online retailers such as Amazon.com to collect the state’s sales taxes while retailers lobby Congress for national rules governing online sales taxes.

Essentially, California legislators passed a bill earlier this year that ‘exploited’ a loophole in federal case law that would have required Amazon.com (and others) to collect sales tax on purchases made by California residents.  Amazon.com (and others) promptly ended the affiliate program that provided the loophole.  California legislators blinked with surprise, because apparently they completely missed noticing that Amazon.com always does this (except in New York, where they’re fighting the law in court).  Shockingly, California legislators have now apparently gotten a rush of oxygen to the brain and delayed ‘implementation’ of the tax until September of 2012; this time is supposedly to allow Amazon.com and other online retailers to petition Congress to straighten out national sales tax guidelines (something that Amazon.com has been pushing for, actually). Assuming that Governor Brown signs off on this – and, given that the original bill has pretty conclusively been already shown to be wildly if not insanely optimistic in its estimated revenue*, he’d have to be extremely dumb not to** – Amazon.com will turn its affiliate program back on. (more…)

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