States Are Trying to Force Internet Sales Tax

8:20 PM - March 9, 2010 - By Kevin Parrish - Source : Tom's Guide US

They say more taxes will help us in the long run, which supposedly puts more money back into our pockets, somehow.

A recent Colorado sales-tax regulation on out-of-state online retailers has forced Amazon to pull the plug on its marketing affiliates in that particular state. Previously members of its associates program earned a small fee for providing links to Amazon on their websites. However on Monday, the online retail giant sent out an email to all of its affiliates in Colorado, announcing that the state has forced it to halt all advertisement in that area.

Colorado is not the only state cracking down on online retailers. According to CNET, fifteen other states have considered--or are currently considering--enacting similar laws that would force e-commerce companies to charge sales tax for shipments outside their home state. Apparently four states, including Colorado, have already implemented the new law.

Previously federal law prevented states from requiring out-of-state e-commerce companies to collect sales tax on purchase if they're not based in the state. However in February Colorado governor Bill Ritter signed into law a regulation that forces Amazon and other online shops to report all purchases made by residents within the state, or collect sales tax on every purchase.

Additionally, Colorado law states that online retailers with active affiliate programs--those that provide referral payments--are subject to tax collection requirements. New York, North Carolina, and Rhode Island have also implemented this new law. CNET said that California, Illinois, Iowa, Maryland, New Mexico, Vermont, and Virginia are among those states with similar measures currently pending.

Late Wednesday afternoon, the Denver Post reported that Colorado governor Bill Ritter fired back at Amazon in regards to its termination of the affiliate program. "Amazon has taken a disappointing – and completely unjustified – step of ending its relationship with associates. While Amazon is blaming a new state law for its action, the fact is that Amazon is simply trying to avoid compliance with Colorado law and is unfairly punishing Colorado businesses in the process."

It's the end of the virtual (tax) free world as we know it.

Comments

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razercultmember1 03/10/2010 3:14 AM
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oh no steam tax?!!

frozenlead 03/10/2010 3:14 AM
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This was pretty much inevitable. The question is - where is all this new money going?

gekko668 03/10/2010 3:17 AM
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Looks like several states are trying to milk the e-retailer but in the end the retailer is going to pass it on to the consumers.

MotionMan 03/10/2010 3:29 AM
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Can you imagine being a small business owner /etailer 5 or 10 years from now? Having to file 50 different sales tax returns monthly or quarterly or even yearly is kind of gruesome for an entrepreneur.

False_Dmitry_II 03/10/2010 3:30 AM
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I don't see that as doing anything helpful with this development. It's enough to make you think that none of the people writing laws have ever taken econ 101.

hopiamani 03/10/2010 3:32 AM
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gekko668 :
Looks like several states are trying to milk the e-retailer but in the end the retailer is going to pass it on to the consumers.



And consumers can pass it on by not buying.

How much in sales tax revenue are they really hoping to get? Do they really think that was the solution to the enormous budget shortfalls?

I just wish they would cut spending more.

AMW1011 03/10/2010 3:38 AM
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"Amazon has taken a disappointing – and completely unjustified – step of ending its relationship with associates. While Amazon is blaming a new state law for its action, the fact is that Amazon is simply trying to avoid compliance with Colorado law and is unfairly punishing Colorado businesses in the process."

HAHAHAHAHA

Hypocrisy at its god damn finest.

Sorry Bill Ritter, you've just passed a bill that is sure to kill some small-time etailers in your state, you know the best type of etailer, so you shouldn't be bitching at Amazon at all.

I'll fight this one in my state if it ever gets put on the table, tooth and nail.

lasaldude 03/10/2010 3:47 AM
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I hate greedy little fucking people. i hate buying stuff and having to pay taxes. If i could get a summary of where my taxes go individually, then wouldn't bitch. it likes paying insurance, its just money down the drain. I specifically buy from amazon and newegg for the no tax and usually no shipping.

Anonymous 03/10/2010 4:03 AM
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May God bless you Mr. Ritter and your state. You'll need it cause your businesses won't be getting any of my money!
Politicians, enough said.

montezuma 03/10/2010 4:13 AM
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hopiamani :
And consumers can pass it on by not buying.How much in sales tax revenue are they really hoping to get? Do they really think that was the solution to the enormous budget shortfalls? I just wish they would cut spending more.



Cut spending more? The tax situation in Georgia is so bad that the State is raping the education system. Of course, this is mostly due to idiots in power and wasteful spending, but that does nothing to help those victimized by this bullshit. The numbers speak for themselves.

Education has already been piliged enough, but Georgia is cutting another $1.3 billion USD($1 billion from K-12 and $300 million from higher education). The educators in public education have said that the cuts will hurt them, but will kill higher education. They are absolutely correct.

As a student in Georgia, my tuition continues to sharply increase, while the quality of my education is decreasing. This is wrong on many levels, but what is more wrong is what the legislature is letting go into effect.

Governor Purdue is getting around $9 million USD for some fucking horse stables, but he is letting the State kill education. I can promise you that Georgia is not the only state that is screwing over so many of its citizens. While I do enjoy the tax-free purchases at Amazon and Newegg, they are beyond stupid to believe they can avoid sale-tax. Those two companies can afford to process sale-tax for all customer's state governments and even the local governments. The problem will be with the smaller retailers.

I believe there should be a cap at which a state can demand sales tax. If a company is raking in billions in sales, then they should have to pay. The hardworking citizens in the United States are not immune from paying their share of taxes, so neither should corporations in the United States. If they do not like it, then stop doing business.

cadder 03/10/2010 4:17 AM
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The politicians are not doing their jobs to use taxes to run their states (or country). They are looking for the easy way out- by collecting more money from things like lotteries, toll roads, and taxing businesses in other states. They want the people in their state to pay more taxes, they want to use the taxes themselves. They may or may not collect more taxes because the out of state businesses can terminate their in-state affiliates, but they have already affected the jobs and incomes of the residents of their states.

nforce4max 03/10/2010 4:35 AM
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The more they tax the less they will get. In the end they may just get that pound of flesh. I have already accepted that this country is long gone however I can't take it no more with the fat cats on top sucking the working classes of every thing while the bankers get "their" bonuses. The monetary system is nothing more than a system of enslavement compared to it was a hundred years ago when every one had a chance in life to make something of them selves while now if you are not rich you're screwed. Just go look it in the states alone 40% of all the wealth is in the pockets of 5-10% of the population. The average CEO takes home $500 dollars to every one dollar the average income earner makes. This country is ripe for total collapse and a violent revolution. As in the days of the French revolution "off with their heads".

pharge 03/10/2010 4:46 AM
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montezuma :
The tax situation in Georgia is so bad that the State is raping the education system. Of course, this is mostly due to idiots in power and wasteful spending, ...Education has already been piliged enough, but Georgia is cutting another $1.3 billion USD($1 billion from K-12 and $300 million from higher education).



While I do agree most of your point, but do you think how much this "new" tax are going back to the education system instead of going to the big spending black holes the states are having?

nforce4max 03/10/2010 4:53 AM
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Anonymous 03/10/2010 5:12 AM
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They can do it with sales tax, but they can't with MJ? Nice job, states.

mayne92 03/10/2010 5:16 AM
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pharge :
While I do agree most of your point, but do you think how much this "new" tax are going back to the education system instead of going to the big spending black holes the states are having?


Same with New York...taking from education, nursing homes, hospitals, etc.

mayne92 03/10/2010 5:22 AM
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"Amazon has taken a disappointing – and completely unjustified – step of ending its relationship with associates. While Amazon is blaming a new state law for its action, the fact is that Amazon is simply trying to avoid compliance with Colorado law and is unfairly punishing Colorado businesses in the process."

WTF?! LMFAO!!!

Anonymous 03/10/2010 5:41 AM
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Just think... income tax, sales tax, property tax, registration tax, fuel tax, disposal tax, service tax, internet tax, and soon health tax. Anyone think government is really looking out for us poor working slobs?

How much longer can the working man survive the liberal plan of FREE everythiing for everyone regardless of how hard "they" don't work? I work hard, why take more and more of my paycheck? I say there should be a politician tax!!!

gh360 03/10/2010 5:51 AM
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nforce4max :
Tax and Spend by Barack Obamahttp://www.youtube.com/watch?v=GK5hrKHrFzIAll the while the average man and woman who now has ended up sleeping in tents, besides the rail road tracks or in the woods.http://www.youtube.com/watch?v=eih67rlGNhUJust some food for thought



Do you know the difference between a federal and a state tax?

nebun 03/10/2010 5:57 AM
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fuck this shit, before you know it you will only take home 20 cents out of a dollar, wait it's already happening. US economy = fuilure
US = modern day communism

mikeynavy1976 03/10/2010 6:25 AM
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The only way I'd support a tax like this is if I was assured the money was going to a service that the majority of the state could use, especially if it is something I could use, or have a high probability of using in the future. Most of these taxes are going to frivolous social programs, and supporting the unproductive (who are impersonating those that are truly in temporary hard times) members of society. I've been taxed enough. If we could thin out our population we'd have fewer social, medical, AND economic problems that are used as excuses for "Internet Tax" necessity.

Hilarion 03/10/2010 6:39 AM
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I love these tax laws that are being enacted by people who get pay raises every year unless they vote against it which they never do. They don't care who they screw as long as they are pocketing our money.

Chrys 03/10/2010 8:04 AM
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If I was amazon, I would laugh at them and cut all ties to businesses in their state and not pay them a cent. You only have to follow federal law and the laws of the states you or your people are in... and being as they aren't in Colorado they have no reason to follow Colorado law, a state can't extend their laws into other States. What is Colorado going to do, monitor UPS and FedEx to keep amazon from shipping stuff into Colorado?

Gin Fushicho 03/10/2010 8:10 AM
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Awwwww.... =( But.. our taxes go nowhere.

Anonymous 03/10/2010 8:46 AM
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I'm going to buy something from Amazon now. Amazon rocks. Fuck Colorado, and fuck any other state that tries the same thing.

False_Dmitry_II 03/10/2010 9:44 AM
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@montezuma

I liked what you were saying until you got to "businesses like newegg and amazon can afford this so they should pay it". (I'm a student in Georgia too) Clearly your education was affected because you never took 2 seconds of econ 101. If anything at all makes a company pay money, income taxes, buying new facilities, buying product/components of a product; the company will label this as a cost then raise the price a bit and pass the "savings" on to the consumer. That's how it works, that's how it always worked. You can't simply expect random companies to randomly eat the added cost of anything and continue the same prices and whatnot too. They won't, they can't.

Besides which, most of that is moot. Sales tax has never been invisible to people. (besides the double taxing on the same transaction, the customer gets to pay taxes on an item, and, hey that seller just made some money selling that thingy. Pay your income tax seller!) It just gets added on during checkout, you see it in the list and pay it. That's how it would be implemented. (and is if said etailer is operating in your state)

As such it isn't a company having to pay it at all that's the problem. It's the fact that customers were using the sites to buy things, including from small sites, to not have to pay that extra amount. It's people not wanting to pay this, or it brining local stores to the same level in some cases, that will cause the volume of business to go down.

Princeofdreams 03/10/2010 10:40 AM
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I wonder how this will work with international sales, For example if someone purchased an item here in the UK, would Colorado be demanding sales tax from the UK company?

I know the reply they would get, two words begins and ends in F :)

M-ManLA 03/10/2010 10:40 AM
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Look like it is time to buy up all you can. This is almost going to become law in the foreseeable future.

maigo 03/10/2010 12:01 PM
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How do they expect to FIND most of these people?

Syndil 03/10/2010 12:11 PM
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Pssh, too easy to fight. The Internet is global, remember? You do the math.

jtt283 03/10/2010 1:53 PM
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Frapping parasites... One can hardly turn around without one of them sticking a figurative gun in your face, saying "pay up, or else!" The graves of the Founding Fathers contain only chips and dust, they've been spinning so fast for so long...


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