No More Amazon Referrals For North Carolina Residents

This morning, Amazon e-mailed all North Carolina residents who are part of its Associates program to notify them that their accounts will be terminated in the next few weeks.

An impending change in North Carolina law would impose taxes on “digital click-throughs,” and Amazon is simply ending its relationship with N.C. -based affiliates rather than figuring out the logistics of paying these taxes. Once the law is in place, other affiliate programs may follow suit. Or not.

Amazon warns NC affiliates about tax issue [News-Record] (Thanks, Andrew!)
Amazon Associates to Terminate North Carolina Members [Insight: Makovision] (text of e-mail)

Comments

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  1. Mark says:

    I got this email today and am sorely disappointed in my legislators who promised me that there would be no new taxes.

    Sadly, this provision is buried deep in a much larger bill so it is likely to get overlooked.

    • HunterZ says:

      @Mark: Maybe they’ll repeal the law quickly if enough companies pull out like that.

    • LadySiren is murdering her kids with HFCS and processed cheese says:

      @Mark: A hearty “way to go!” to Gov. Bev Perdue and our bumbling legislosers. Maybe we can bring back Mike Sleazly instead?

      • Eyebrows McGee (now with double the baby!) says:

        @LadySiren: Naw, Sleazly was going to lose you all your federal highway funding. GOD FORBID.

        (Also, Sleazly refused to commute any death penalty sentences, even when presented with fairly strong evidence of innocence, because as a prosecutor he put some of them there and then was asked to commute sentences on men he had locked up who now appeared to be innocent. Conflict of interest much?)

        • Paul Puri says:

          @Eyebrows McGee (now with more baby!): And his name was Sleazly. Do we really need someone running in the government named Sleazly? I mean, come on! Sleazly. I’m just saying…. And what about airline food. What’s up with that stuff?

          • LadySiren is murdering her kids with HFCS and processed cheese says:

            @Paul Puri: Uh, it’s actually Easley but given his track record of guvmnt, Sleazly is a better moniker for him.

        • LadySiren is murdering her kids with HFCS and processed cheese says:

          @Eyebrows McGee (now with more baby!): Pshaw, who needs federal funding when we’ve got the highest gas tax in a 17-state region? Heh, there are even stickers put out by some pro-oil association that show what the gas tax is in NC versus the surrounding states; my favorite gas station has these plastered all over the pumps.

          Welcome to North Carolina…we’ve got great roads.

          • Eyebrows McGee (now with double the baby!) says:

            @LadySiren: First in roads, last in schools!

            I do miss NC, though I do not miss your pollens. :)

            • bravohotel01 says:

              @Eyebrows McGee: You got it wrong! Their real motto is:

              “First in Tights”

              When I lived there, I even considered *altering* my own license plate thusly, but decided not to when I realized

              a) most people wouldn’t get it, and
              b) Police in NC don’t take kindly to Damnyankees, ‘specially in them small towns like Hickory, Asheville, etc.

              • LadySiren is murdering her kids with HFCS and processed cheese says:

                @bravohotel01: All of you Yankee types are restricted to Cary, aintcha?

                • Eyebrows McGee (now with double the baby!) says:

                  @LadySiren: It *is* the Containment Area for Relocated Yankees.

                  (I lived in Durham, down near Streets at Southpoint. We got our power back first in that 10 day outage around 2003ish because GOD FORBID the mall not have power!)

            • LadySiren is murdering her kids with HFCS and processed cheese says:

              @Eyebrows McGee (now with more baby!): Oy, you got that straight. I will say that my kids’ school (luckily) is one of the better ones in our county. Otherwise, I’d be selling an organ or three to send them to private school.

              And pollen…OMG, it’s TERRIBLE this year, especially with the heavy rain in May and so far in June. I’m addicted to my allergy meds. :(

    • Gramin says:

      @Mark:

      Likely to get overlooked? I doubt it. Amazon caught it and I’m sure others will too. And if they don’t catch it right away, they’ll definitely see it when that new tax comes across their sheets.

    • winshape says:

      @Mark: You know how to tell if politicians are lying?

      If they are breathing.

  2. nucwin83 says:

    “The tax on the category “digital click-throughs” under which the Amazon agreements fall would raise $13.2 million next year, according to estimates by the General Assembly’s fiscal research arm.”

    I’m guessing those folks are also the ones who think that everyone reports income from internet sales on their tax returns every year.

    • MaytagRepairman says:

      @nucwin83: I think these might also be the folks who believe companies will stand still and allow themselves to get hit by such a tax.

      • RecordStoreToughGuy_RidesTheWarpOfSpaceIntoTheWombOfNight says:

        @MaytagRepairman: Indeed. I think the tax will raise significantly less once businesses simply pull out. Way to encourage economic growth, North Carolina.

    • Gramin says:

      @nucwin83:

      Maybe the little guy doesn’t report revenue, but anyone with any type of market share does report income from internet sales. It’s much cheaper to report it than to get hit with fines after the IRS catches them. Say what you will about government, but their are only two certain things in life: death and taxes.

      • dragonfire81 says:

        @Gramin: There are two problems with your theory:

        1) The IRS is massively undergunned and does not have the resources to handle all the tax fraud/evasion that goes on.

        2) Most medium size and major business people, those with “market share” as you put it are experts in finding ways to pay next to no tax (major corporations do it all the time too).

        Being taxed is certain, but the government actually getting all the tax dollars they are owed is far from it.

        • Gramin says:

          @dragonfire81:

          Actually, it’s not flawed. The IRS is not capable of pursuing the average Joe who evades the IRS.

          The market share businesses pay taxes. Period. Show me a large corporation that avoids taxes. Your claim is unfounded. I see financial information for middle market companies on a day to day basis and I can say, without a doubt, they’re paying taxes.

          • Gramin says:

            @Gramin:

            Oops… I didn’t finish my first thought. They don’t have the manpower to pursue the average Joe who avoids paying 10K in taxes. However, they’re perfectly capable of pursuing a large corporation attempting to avoid taxes.

          • H3ion says:

            @Gramin: The large corporations have the resources to avoid taxes by structuring their business in certain ways. Or as we were told, “avoidance” is perfectly legal; “evasion” is not. I can’t see Joe’s Deli setting up an offshore corporation to keep his taxes down.

    • Trey Mahaffey says:

      @nucwin83: wonder how much of that 13.2 million will be reduced because of amazon leaving… not to mention any other companies that follow suit

  3. Saboth says:

    Heh, the government tries harder and harder to find every penny that John Doe is hiding away from them. “Sir, we are aware that your World of Warcraft rogue by the name of “Stabbity” is sitting on 91,234 gold. If you were to sell this digital currency, it could equate to several thousand dollars. We are going to have to arrest you for not claiming this on your tax forms at this time.”

    • pop top says:

      @Saboth: I would love to see someone come up with a plan for taxing the in-game currency of MMORPGs and other online games. Would the value of the gold in WoW be worth more than Linden Dollars? Would they also put a tax on armor, weaponry and other items?

    • bohemian says:

      @Saboth: State governments have lost their minds. South Dakota announced they were going to pursue people for not paying use tax on anything they purchased out of state. Anything being all the way down to a pack of gum. Since the population base of the state is on the borders of IA, MN and NE this is a problem.

      California sent me a letter wanting me to pay income tax on some funds. The money wasn’t wages, I have not been to CA for decades. So simply having someone in CA send you money could set off their revenue department coming after you.

      • Saboth says:

        @bohemian:

        I really think we need to just start over…scrap the government, throw the bums out and start from scratch. It is getting ridiculous when your tax combined is approaching 40%+, and you STILL have to buy your own healtcare.

    • RedwoodFlyer says:

      @Saboth: Technically, we’re supposed to be paying state tax anyways, so this isn’t a “new” tax…

  4. samhell says:

    Good ol’ government. Trashing this country one state at a time with their ridiculous taxes. Way to screw the citizens. Keep up the good work. Maybe if this crap keeps happening people will actually put a little research into who they vote for. I say good job (honestly) to Amazon.

    • wee0x1B says:

      @samhell: I’d gladly give up my entire paycheck for more social programs.

      Well, not really. I’d actually like to have more of the 60% the government currently steals from me, but the needs of the lazy outweigh the needs of the hard-working.

      I’ve been told that’s a very anti-social idea. I’m fine with that. You want to eat, live and be happy? Great! Do work.

      • samhell says:

        @wee0x1B:

        What?! How did you get away with only 60%? You just don’t care about all those poor people do you? Selfish….

        I actually broke even on my tax bill this year… I was just going to mail them a picture of my middle finger and a bold print “NO!”

        :-P

  5. tungstencoil says:

    What gets me is the whole “law of unintended consequences”. In this case, NC wants their grubby hands on folks’ money. The result?

    Business just leaves.

    The best part? It sounds like they’re not leaving because of the tax per se, but because of the logistics of paying/enforcing it.

    Yay for big government!

  6. Canino says:

    The entire country has gone tax crazy. I wish elected officials would do something other than sit around thinking up more ways to tax tax tax and spend spend spend.

    I posted to a city council member’s blog asking him to think of ways to save my money instead of thinking of ways to spend it. The reply was basically something like “your comment has been noted, now let’s talk about the new arts center we want to build”.

    • kamel5547 says:

      @Canino: The thing is that raising taxes is the easy way out. It takes thought and effort to craft a well detailed plan for dealing with less revenue, it takes very little thought or effort to raise taxes. And lets face it, while there may be bright minds in government, they generally don’t exist in positions elected by popular vote (with some exceptions). The unfortunate truth is I don’t think most politicians have the ability or will to do very much to oversee or reduce spending.

    • mythago says:

      @Canino: That’s because all of your fellow voters (if not you) are telling your council member “Stop spending, except on the things I care about.”

      • morlo says:

        @mythago: No it’s simple corruption. City workers are overpaid and city projects are overpriced–by a lot. Millions of dollars are siphoned off at every level, and very few people have the integrity not to take their cut, and those few people are currently employed as Buddhist monks.

        • mythago says:

          @morlo: And who is siphoning those dollars? Think they’re all government workers?

          Sure, local governments have corruption and waste, but it’s dishonest for voters to say that’s *all* it is. One man’s fat and waste is another man’s crucial government services. People are all for “reduced spending” right up until it reduces spending on fixing the potholes in front of their house, or on keeping the DMV open at hours convenient for them.

        • Canino says:

          @morlo: Yep, there’s some truth to that. You would be amazed at all the money my city has wasted on “consultants” and similar things. Millions of dollars. And it’s no surprise that the consultants are friends with people on the council.

          They also paid some “artist” $100K to design some sculpture garden next to city hall and he put about 3 simple ideas on paper. Then they decided they didn’t like it and he quit, taking his money with him.

          • Quill2006 says:

            @Canino: I worked for a while in museum exhibit design, which is a really awesome field until you try to actually get any of your projects built. The company I worked for wasn’t tied to a specific museum; instead, they got jobs from smaller museums and organizations, especially ones that had been given grants or state funding for their project.

            There was one project they’d been working on on and off for 10 years, getting paid for their billable hours when they worked on it, and it never got built. 10 years of delays and political appointees changing plans for nothing, no to mention the money paid out for something that was never built. The taxpayers were lucky the company was very honest and didn’t bill for stuff they hadn’t done.

            Unfortunately, this was a really common story for the company, and it was really frustrating, even for those of us who were benefiting by the stupidity of the government and organizations who were throwing money away on designs they didn’t use. It wasn’t that the designs were bad, either. Most of the projects were simply never completed because the people in charge of the project were replaced or retired, and the new person decided to put their own stamp on the project. Such a waste.

    • vastrightwing says:

      @Canino: Don’t ask the government to do anything. This is crazy. Every time the government does stuff, it’s always bad: it costs us money. Instead, stop funding them: don’t buy any government debt instruments. They raise our taxes. Don’t vote for more regulations, they always raise taxes. Don’t request more regulation. Don’t vote for more spending. Instead, save money: the government only taxes money that is flowing. Barter with family and friends. Create a local currency.

    • samhell says:

      @Canino:

      As long as the keep the public stupid and hungry they can always sell them education and a meal…. and we keep buying the same thing over and over and over and over and over. The government isn’t going to change.

      The “change” is your employment status, as in, you are now unemployed. The “hope” is you hope you can pay your mortgage and you hope you can find a new job. Careful who you vote for……..

  7. There's room to move as a fry cook says:

    North Carolina residents who get click-revenue already declare it as taxable income (at least they are supposed to). Google, Amazon et al issue a Form 1099 so it’s not something that’s easy to hide.

  8. cristiana says:

    I wish Amazon dropped referrals in New York also. Because the referral system was how the NYS government got Amazon to make NYS residents pay sales tax. And if more businesses did this, maybe someone will take notice, and stop all this tax madness.

    • Zyzzyva100 says:

      @cristiana:

      I was just thinking that myself. Probably too much money in it for Amazon to drop the state of NY though. But thats OK, I just buy used via Amazon. Its cheaper, there’s no tax and Amazon still gets their cut – and NY doesn’t. Seems like a win-win-win to me.

  9. vladthepaler says:

    It’s a good decision on amazon’s part. I’m surprised they didn’t do the same in New York when they decided that the affiliates program meant amazon purchases would be taxable.

    • Gramin says:

      @vladthepaler:

      I’m going out on a limb here, but I think the benefits (added income) outweigh the costs (taxes) in NY. Though NC is 10th in population, it’s 38th in household income, below the median US household income. Easier to cut out NC than NY.

  10. There's room to move as a fry cook says:

    I did some digging but can’t fins much specific. It appears to be a state sales tax – not an income tax.

  11. frank64 says:

    They don’t want to raise taxes on everyone, they just want to find many little pockets of people they can tax separately. That way the outcry is smaller. Many people fall for this, and often think it is OK if they are not directly effected, especially if the reported reason is “for children” or the thing being taxed can be frowned upon.

    I really think that if we need to raise revenue, we should raise the tax on everyone directly either in income or a general sales tax. That way the costs will be less per person and not look at certain groups to bare the costs.

    One reason that governments are increasing enforcement of infractions that bring in fine income. There are many examples of this enforcement being used only to increase income. They should only be concerned with the actual issue: speeding, parking, whatever. Instead they are playing gotcha like credit card companies fees.

  12. RobertW.TX says:

    As far as I am concerned there is only one fair and equitable form of taxation. A flat income tax where anything that adds to your net worth is counted as income.

    Set a poverty line, no one pays anything on the first 20k say. Then tax everyone a flat 10 or 12% on the money above the poverty line. No deductions for anything.

    My taxes would be 5 lines of very simple arithmetic. Everyone could understand their taxes, a laudable goal in my opinion. And the IRS could be downsized because they would only be responsible for verifying income.

    Seams like everyone wins and no one could credibly call the his or her tax burden unfair.

    My $0.02

    • Canino says:

      @RobertW.TX: That would require a reduction in the bureaucracy, which means someone would have to give up some of the power they’ve accumulated. Don’t count on that happening any time soon (although I completely agree with you).

      • Gramin says:

        @Canino:

        If only Bill Clinton could hold the Office again. He reduced the Bureaucracy more than both Bush Sr. and Bush Jr. Ironically, they’re Republicans and they’re supposed to reduce government, yet, under their control, government grew!

        • Canino says:

          @Gramin: You mistyped “Ronald Reagan”.

          • Gramin says:

            @Canino:

            Oh no, I mean Clinton. Reagan was a liar and a racist.

          • theodicey says:

            @Canino: Reagan, the guy who added $5 trillion dollars to the national debt — $25,000 for every person in America? That’s “reducing government”?

            Don’t make me laugh. There hasn’t been a fiscally conservative Republican President in 50 years. The only real fiscal conservatives were Clinton and Carter.

            [en.wikipedia.org]

            • Canino says:

              @theodicey: Additional $$$ does not equal additional government bureaucracy. There are many other factors than just raw dollar amounts. Also, Reagan had to rebuild the military after it was devastated by Carter, for one thing – and that wasn’t cheap – and the end result was well worth it many people will tell you.

              I don’t disagree that many people, including myself, were severely disappointed at the lack of fiscal conservatism by Bush I and Bush II.

              • There's room to move as a fry cook says:

                @Canino:

                “Reagan had to rebuild the military after it was devastated by Carter”

                Not true. Military spending under Carter increased from 4.7 percent GDP to 5.2 percent GDP.

              • RandomHookup says:

                @Canino: I think that little war in Vietnam did a lot to hollow out the military.

      • I Love New Jersey says:

        @Canino: There was only one world leader that knew how to get rid of bureaucracy. However, Stalin’s techniques wouldn’t exactly be popular.

    • Gramin says:

      @RobertW.TX:

      Sounds good in theory. Except for this thing called the AMT (alternative minimum tax) and the labor it takes to change the tax code. Since taxes are raised by Congress, it means Congress has to write a new bill, or rather, several new bills. And, whether you like it or not, I think most Americans believe they should get deductions for education expenses… and for charitable contributions… and for having children.

      Again, what you say is nice in theory, but in practice, it’s much more dificult and complicated.

      • frank64 says:

        @Gramin: That is one of the huge problems with the flat tax- everyone thinks things THEY do should be deductible. The thing is everyone does some of these things throughout their life and the cost of the deductions needs to be added to the rate. Why not just have a lower rate and make our personal decisions not taxable events. Our rates would end up lower so the costs would end up about the same.

      • RobertW.TX says:

        @Gramin: I have to respectfully disagree. The AMT is probably the most ludicrous part of the current tax code. If your countries tax code is so complicated as to require a parallel tax system there is simply something wrong with your tax code. My suggestion was to wipe the slate clean and start from scratch.

        The current system expects people to pay taxes under a tax code impossible to read let alone understand. Here is an eyeopener I have used several times. A printed version of Title 26 of the United States Code (ie tax code) is available from the US GPO. It is 19 volumes and consists of 14,500 pages. Assuming you can read 1 page per minute (laughable with complex documents like the US tax code) it would take you 241 hours or 30 days reading 8 hours a day to read the US tax code.

        To add insult to injury Title 26 is far from comprehensive when it comes to determining your tax burden. There simply is no complete document of all the laws that effect taxation in this country, which is insane.

    • TouchMyMonkey says:

      @RobertW.TX: Except that 10-12 percent wouldn’t come close to funding the federal government. You’d have to make a flat tax come closer to 30% to do that, and you’d either have to (1) exempt more income, thus making the One Tax Bracket To Rule Them All even higher, or (2) accept that people in the lower reaches of the middle class would get royally screwed.

      Or you’d have to cut spending, but where? You tell me. If I had to do the cutting, I’d start with that five-sided building in Alexandria, VA. Plenty of pork to cut there, I guarantee it. Of course, the same people who swear that the Flat Tax or Fair Tax or whatever they’re calling it nowadays would scream bloody murder at the first mention of cutting DoD’s budget.

      • TouchMyMonkey says:

        @HurtsSoGood: Egad, that was horrible. Let me fix that last sentence:

        Of course, the same people who swear that the Flat Tax or Fair Tax or whatever they’re calling it nowadays is the silver bullet that will fix everything would scream bloody murder at the first mention of cutting DoD’s budget.

      • HiPwr says:

        @HurtsSoGood: I think 12% would fund a lot more than you think. I see a lot of rending of clothes and gnashing of teeth over the fat cats that pay taxes at a lower rate because of fancy accounting. Flat tax would solve that.

        Cut spending? How about massively reducing the number of federal employees working for the IRS because of the implementation of the flat tax?

      • RobertW.TX says:

        @HurtsSoGood: As it happens I remember reading a study commissioned by a democratic senator several years ago. 10% or 12% were the numbers in his economists came up with to replace the federal budget and create a small surplus. The same study listed the percentage the average person making more than 500K a year pays under the current system after working all the possible deductions and loopholes. It was well below the 11% or so I pay now.

        • NeverLetMeDown says:

          @RobertW.TX:

          When Steve Forbes was proposing a flat tax, he was at 17%, and that would come up about $200BN short of current revenue levels.

          Realistically, a flat tax would have to be in the 20-23% range to actually be revenue neutral.

    • grapedog says:

      @RobertW.TX: I’ve been the flat tax guru for my circle of friends for a while, trying to flip them all to my opinion. None of them really had any idea of the types of taxes that can be had, but I’m constantly championing it. One person at a time, it’s slow but at least I’m making them aware of the alternatives out there. They know keywords like consumption tax and VAT tax…but they dont’ realize the pro’s and con’s.

      Little by little I try to bring them on board the Flat Tax train…the obviously fair way to tax everyone across the board.

      I find it funny that rich people are “looking out for those less fortunate” when they say flat taxes are bad but consumption taxes are good. hypocrites and asshole one and all.

    • sirwired says:

      @RobertW.TX: If my stock portfolio doubles, I’ve added $X to my net worth, but $0 to my cash. Do I now owe .10 x $X, even though I have no additional cash with which to pay the tax? What happens when the market goes down, and my portfolio drops by $Y? Do I get a refund for $Y x .10?

      If you then modify your tax to only count adding to cash position, that won’t work either. Employers would then start loading up on compensation via non-cash fringe benefits to avoid payroll tax.

      “Simple” ideas end up being more complex than “5 lines of very simple arithmetic.”

      • RobertW.TX says:

        @sirwired: While I see your point my point is anything that increases your net worth is income. I did not over look the issue of stock appreciation. I simply consider it income like anything else. Likewise depreciation of a portfolio would reduce your tax burden. As for my “5 lines” comment I was only speaking of my personal taxes not the world at large. Some people would probably have more to fill out, but it would still be far simpler than our current tax code.

        • sirwired says:

          @RobertW.TX: Okay, anything that increases my net worth is income. But what if I live off my investments and have no cash income? That means that in good years, I’m forced to sell enough holdings to cover 10% of my gains. (In addition to whatever I had to sell to live off of.) It would also tie government revenue too closely to the fortunes of the investment markets. (Do I get a refund in the years the market tanks?)

          Also, how do I value all my assets, every single year? How much is my collection of DVD’s worth? Do I have to inventory my pantry every single year to account for fluctuations in my supply of Dinty Moore Beef Stew? Do I have to adjust the value of the frozen ground chuck in the freezer to the grocery store price as of December 31st? How much less is carpeting worth two years after installation? Can I adjust the depreciation by the number of kids I have?

          These are actually all questions that are answered in the current tax code for businesses. These things take up a gigantic amount of it; far more than the tax code for individuals. Calculating current asset value and depreciation takes a hell of a lot more than five lines. I’ll take a 1040 over that nightmare any day of the week.

          • Trai_Dep says:

            @sirwired: You raise an excellent point. The voluminous tax code is largely due to the rules that businesses insist upon for things like depreciation and capital investment. So it’s unfair to apply this to individual filers, especially when the complexity is there precisely because businesses demand exemptions (that don’t apply to individuals anyway).

    • Trai_Dep says:

      @RobertW.TX: Except for gold. Because owning gold is something only Real Americans do.

    • mythago says:

      @RobertW.TX: I asked my mother (a CPA and tax lawyer) once if she wasn’t concerned about a flat tax ending her career. When she got done laughing, she pointed out that a) you need to define “income” and b) people (including corporations) will give up their deductions when you pry their cold, dead hands away.

    • oneandone says:

      @RobertW.TX: Deductions are a way to incentivize behavior that (theoretically) will benefit you or society. Getting an education, having children, donating money or items to charity, buying a home, installing energy-efficient windows on that home, etc. Getting rid of deductions would remove that tool. I’m not sure that would be entirely negative, but it would have ramifications. They should be taken into consideration.

      • RobertW.TX says:

        @oneandone: While I am quite aware of the traditional reason for deductions I don’t think the government should be encouraging people to have kids or buy a home. To me that should remain a purely personal decision. I donate regularly to Habitat for Humanity, both cash and labor, but I donate because I want to support their cause not for the tax deduction.

        • mythago says:

          @RobertW.TX: The government also shouldn’t be encouraging businesses to hire people in the US instead of abroad, or to give to charitable organizations?

          As has been pointed out repeatedly, all the ‘flat tax’ proposals are nonsense because they want to levy a tax on earned income, which affects people at the lower end of the wealth spectrum, while letting capital gains and the estate tax slide (gee, just so happening to benefit rich people more).

    • Andrey Goder says:

      @RobertW.TX: I agree completely with this proposal. It’s likely the tax would have to be around 20%, but that should be fine. That’s about how much most people pay now if you look at both income and payroll taxes. Of course people in the bottom quintile would still pay less because of the exemption.

      The arguments about unrealized capital gains are stupid. Our tax code *already* taxes realized capital gains, so the flat tax would work the same way. If you sell stock and you made a gain of $x, you’d pay 20% of $x. Obviously you don’t have to pay taxes on unrealized gains.

      The other major simplification would be to get rid of corporate income taxes. They are just “hidden” taxes on people (corporations just pass on the taxes in the form of higher prices and lower wages).

  13. There's room to move as a fry cook says:

    If it’s a sales tax then NC could charge tax on sales by vendors with a NC presence to NC residents. If having a NC affiliate constitutes having an instate-presence then Amazon would have to charge sales tax on sales to NC residents referred by a NC affiliate. That would be a nightmare. Some sales to NC residents would be taxable and others would not.

    • Cant_stop_the_rock says:

      @IfThenElvis:
      No, it’d apply to any NC resident. Just like if you buy from BestBuy.com – it doesn’t matter how you got to their site, they collect sales tax if they have a store in your state.

      • There's room to move as a fry cook says:

        @Cant_stop_the_rock: I disagree. It has to be based on how NC customers got to the Amazon site. Otherwise there is no rationale to cancel just the NC affiliates.

  14. HiPwr says:

    If I lived in NC, I would be loathe to purchase anything from the Internet. Why pay taxes on top of shipping?

    • Cant_stop_the_rock says:

      @HiPwr:
      Er… huh? What does one have to do with the other?

      • HiPwr says:

        @Cant_stop_the_rock: A product that is taxed cost me more than one that isn’t. A product that is shipped to me cost more than one that isn’t shipped. A product that is shipped and taxed cost more than either of the first two cases.

        Get it? If not, I might be able to put together an example using peanuts, or some such thing.

        • BStu says:

          @HiPwr: Well, in the first place, you generally owe taxes even when they aren’t collected by a merchant. That you can dodge those taxes easily doesn’t really mean they aren’t owed. Besides that, I’m aware of few products that cost less to ship than they would under normal sales tax rates, so I don’t get how that is such a deterrent. Either they are already paying a premium or they are buying something because its less expensive online. I’m sure an extra 5-6% will impact the math on a not insignificant number of purchases, but its not like its a rule the way you implied.

    • Gabriel Casalett says:

      @HiPwr: Oh it gets better! There is also supposed to be tax on shipping…

  15. sirwired says:

    I’m very suspicious here… I cannot find a single source that references specific legislative text. It’s hard to decide for myself if this is a reasonable position or not based on just a couple of blog posts.

    Personally, I think that Amazon and other online retailers should suck it up and go ahead and pay sales tax. It would not be as difficult or expensive to implement as Amazon claims. (They already do it for target.com, which they run.) I realize this would probably take federal legislation. Certainly calling an affiliate a “substantial presence” is a bit of a stretch.

    • mythago says:

      @sirwired: It’s probably a pre-emptive strike by Amazon. The winds of change are blowing against online retailers – people are starting to think it’s unfair that Local Store gets taxed while internet stores aren’t.

    • Gramin says:

      @sirwired:

      Amazon has the means to pay the tax. But the costs outweigh the benefits. Why “suck it up” when it’s cheaper just to stop doing business? I don’t fault Amazon. This is a mistake made by NC.

      • mythago says:

        @Gramin: Do you really think it costs Amazon to pay the same taxes a brick-and-mortar bookstore in NC would? No. They’re just trying to get people pissed off about the idea of an internet tax.

      • sirwired says:

        @Gramin: I meant “suck it up” in general, in regards to fighting efforts (on the federal level) to just collect sales tax everywhere, substantial presence or not.

        The idea of expecting residents to keep track of all out-of-state purchases throughout the year, and then remit sales tax owed to state taxing authorities is silly, and doesn’t work. It makes far more sense for mail-order businesses to collect it.

        Remember, the tax is owed either way; Amazon is currently relying on the fact that most people simply fail to pay it, which makes Amazon’s prices appear lower, at the expense of local competition.

        • West Coast Secessionist says:

          @sirwired: “The idea of expecting residents to keep track of all out-of-state purchases throughout the year, and then remit sales tax owed to state taxing authorities is silly, and doesn’t work. It makes far more sense for mail-order businesses to collect it.”

          WHAT?

          YOU are only under the jurisdiction of ONE state. You only have to send ONE tax return in. With ONE box for “untaxed out of state purchases.” Add them up as you buy them in a spreadsheet (you obviously have a computer if you’re buying online) and send in the money on April 15th.

          A small business that sells online, under the f*ktarded system NY and NC want to make federal law, would somehow magically be under the jurisdiction of all 50 states plus DC. This business would have to fill out 49 more tax returns every year than they do now. Each tax return would need to be prepared according to the tax law of a state where the owner may never have set foot. So he might need a couple dozen books on tax rates, what categories are taxable where, etc. There is NO standard for those things. (Example: UT taxes food, some states don’t tax clothing, CA taxes clothing but not food. Oh, and what is defined as food? What about pet food?)

          Since Amazon is so huge, it would be easier for them to do this than it would be for just about anyone else. A couple extra people on the staff would take care of managing this regulatory mess.

          Amazon is actually being really cool fighting this on behalf of The Internet, because for a small business it will be much more crippling. If you have 3 employees you don’t want to add a fourth just because some dumb ass state legislatures can’t balance their budget 3000 miles away from you.

          We need to eliminate sales tax entirely and shift that revenue generation to income tax where it belongs. THAT would solve this problem. State sales taxes in the 21st century are an anachronism.

          • Joey_Brill says:

            @West Coast Secessionist:
            1. If you sell, you collect and remit a sales tax. I do it once a month. You can too.

            2. Please don’t use the ‘small business victim’ excuse. One spreadsheet and any bozo can instantly calculate, charge, and remit the appropriate tax to the appropriate state. That’s like saying poor idiots shouldn’t be charged income tax because they can’t figure out the 1040EZ.

            3. Your country and its states are broke. The internet has been given a free pass and now it’s time for it to help ease the burden.

            4. I can’t wait to see you squirm when they float the idea of VAT.

        • ATimson says:

          @sirwired: State sales taxes are not legally owed when you live in a different state from Amazon.

          That doesn’t stop states from trying to collect, but up theirs.

          • sirwired says:

            @ATimson: Yes, the taxes are legally owed. It’s renamed a “use tax,” but technically you (the consumer) are supposed to remit the amount you would have paid in sales tax to the state. It’s legal, although pretty much never enforced.

    • There's room to move as a fry cook says:

      @sirwired: I’ve been thru the state website and can’t find any details. The only reason I can think of where a state sales tax would affect affiliates would be if they were considered a “substantial presence”.

  16. Anonymous says:

    I am so PO’d that Amazon would just drop us! I have worked so hard on driving up my sales. It just started snowballing for me and they cut me to the quick! I have no clue who to write or if it will do any good. The letter that Amazon sent us was so cold. I looked at the site they referred us to and no answers. There’s help listed for every state that on that page, just not for NC. Does anyone know who to contact or what we can do? Or are we just lying in wait for our heads to be chopped off?

    Figures! Always go after the little people who are just getting by.

    • BigSlowTarget says:

      @AriellaNumshun: Don’t worry, a web site dedicated to shifting click income to shell companies based in other states should pop up in about ten seconds.

  17. Mecharine says:

    IRS doesnt handle state taxes.

  18. Trai_Dep says:

    Taxes? Taxes? What the hell – I thought “stuff” just got magically paid for!

    • samhell says:

      @Trai_Dep:

      Stuff? Which stuff? The stuff we never asked for that we are told we “need?” The stuff that could be cheaper/faster/better if handled by the private sector with actual competition that could be paid for by those that want it?

      • mythago says:

        @samhell: Yeah, it’s about time we privatized the military.

        • samhell says:

          @mythago:

          Sounds good. Lets do it!

          • RandomHookup says:

            @samhell: You can rent the French Foreign Legion at a pretty good rate, but they pretty much all speak French.

          • mythago says:

            @samhell: Let’s. Mercenary armies have such a fabulous track record throughout history, and I’m sure we don’t need to worry a bit about handing nuclear weapons to organizations who might listen to an enemy nation saying “You know, we have a much better offer for you than the Americans.”

        • plutonyum says:

          @mythago: We already have that in NC. It’s called “Blackwater.” Well, it *was* called that, til that name got a bad reputation. . .

    • winshape says:

      @Trai_Dep: I’m not against taxes, I do realize that they are necessary. I am against additional taxes. If they can’t pay for it from my income tax, sales tax, property tax, car tax, pet tax, gasoline tax, alcohol tax, cigarette tax, toll bridges, county tax, room occupancy tax, capital gains tax, estate tax or any number of other taxes I either forgot or don’t know about…then perhaps it is time to take a look at what they are spending.

  19. iakoolguy says:

    Amazon jumped the gun on this one, the NC Senate rejected the proposed House budget. So now they have to work out what actually makes it into law.

  20. wkm001 says:

    State sales tax only has to be paid once. Lets try to get the retailers to pay taxes on the item when they buy it at heavily discounted prices. This would keep us from having to pay state taxes on higher MSRPs.

  21. Anonymous says:

    I’m a North Carolina resident, and on the state income tax form for a number of years there has been an automatic addition of sales tax for assumed value of the taxpayer’s internet transactions based upon income. Would this proposed new tax not represent double taxation since automatic sales tax is already being taken out?