Amazon threatens North Carolina

Dear Amazon:

Please don't bother apprising me of anything. I'm sick of your strong-arm tactics. With all due respect, and it ain't much, good riddance.

James

I didn't like the tone either, Betsy. It is arrogance run amok.

Up at Kos, just because.

They don't want to collect sales tax for NC? Or they don't like being told how to do it? I'm confused.

States are going to have to come to terms with this e- commerce business and their own tax base. Putting the responsibility on the taxpayer on April 15th is a losing strategy, I'm sure.

We regret to inform you that the North Carolina state legislature (the General Assembly) appears ready to enact an unconstitutional tax collection scheme

I never thought I would say this James, but I don't think your post goes far enough in it's criticism. Amazon wants to tell North Carolina how we can run our state?!

This email isn't informing its consumers and affiliates, its an attempt to bully our democratically elected legislature.

Here is a post on this from Consumerist:

http://consumerist.com/5293911/no-more-amazon-referrals-for-north-caroli...

And Mark Binker:

http://www.news-record.com/content/2009/06/17/article/amazon_warns_nc_af...

With a form letter! Guess they were ready.

Hello,

I am sorry for any frustration this matter has caused you.

We do understand your concerns about the unconstitutional tax collection scheme being proposed in the North Carolina state legislature (the General Assembly). The unfortunate consequences of this legislation were explained in detail to key senators and representatives in Raleigh.

Again, the e-mail you received is not a termination notice. You're a valued participant in the Associates Program and all referral fees you earn on qualifying purchases will continue to be paid as planned. However, if the new law is enacted, we will have to terminate the participation of all North Carolina residents in the Amazon Associates program on or before the same day the law goes into effect. After the termination date, we will no longer pay any referral fees for customers referred to Amazon.com or Endless.com, nor will we accept new applications to the Associates Program from North Carolina residents.

You may contact the legislature to express your opinion about this proposed law. The North Carolina General Assembly's website can be found here: http://www.ncleg.net.

Thank you for being a part of the Amazon Associates program, and we will keep you informed of the General Assembly's action on this matter.

Please let us know if this e-mail resolved your question:

If yes, click here:
http://www.amazon.com/rsvp-y?c=ybxrubhg3297257468
If not, click here:
http://www.amazon.com/rsvp-n?c=ybxrubhg3297257468

Please note: this e-mail was sent from an address that cannot accept incoming e-mail.

To contact us about an unrelated issue, please visit the Help section of our web site.

Best regards,

MaryAnn Z

In other words, it's our monopoly and we'll do what we want to. Nice!
Amazon.com Associates Program

Amazon has two choices:
1) Collect sales tax for the state of NC.

-or-

2) Terminate it's affiliate referral program for any NC residents.

It's their choice how they run their business. I don't see how this is a monopoly or how they are strong arming anyone. How is this any different than Apple, Dell or any other corporate subsidy.

Of course, I think it's an idiotic thing for our state government to make it HARDER to do business in NC..but that's just me.

dealing with Amazon's failed lawsuit against the State of New York:

Earlier this year, Amazon.com and Overstock.com sued New York over an ingenious new law that forces the big-name online retailers to collect sales tax if they maintain affiliate networks in the Empire State, and this afternoon, Judge Eileen Bransten dismissed them both.

Bransten handed down her final dispositions in the two cases, which have been watched with a certain amount of trepidation by online retailers because of the precedent it could set for tax collection in states where they do not maintain offices.

The basis for the claim(s) of unconstitutionality:

Both Amazon's and Overstock's lawyers contended that the law violates the Commerce Clause of the U.S. Constitution and the Due Process Clauses of the Fourteenth Amendment to the Constitution and sought a permanent injunction prohibiting New York from enforcing the law.

So, if they sever relationships with affiliates like James, their "in-state" presence is reduced and they won't be exposed to state laws. I guess...

If memory serves me correctly internet companies were given a pass on taxes as an effort to allow internet commerce to grow. Now that the states are broke the honeymoon is over. Amazon and all the other internet sales companies now have to pay the piper, their businesses are no longer start ups so special treatment is not rational.

Yes, Amazon has the algorithms to make state sales tax easy to pay, but they would rather fight the concept than become good citizens. They knew this day would come, it no surprise, but neither are their strong arm tactics.

Actually, the NC income tax form has had an opt-out 'Use Tax' for years which assumes that the taxpayer has purchased a certain value of items online and out-of-state. They have an income-based table for 'calculating' this value. Doesn't this new proposed tax represent double taxation since online transactions are supposed to be covered under the use tax?

Besides, new or added sales taxes are regressive- the legislature should look to more progressive tax policy.

The law is that if they don't have a business presence in the state, they don't have to collect sales tax for the state. In their view, making the customer responsible for that 7% sales tax is worth losing the affiliate network.

Seems a straightforward decision. The sheeple (likely Republicans) don't think they have to pay use taxes on those purchase and Amazon feels that puts them at a price advantage with the online stores from B&N/Borders.

They may be right.

How about we find a way to reduce the burden on brick and mortar businesses instead of increasing it on everyone else? I don't understand why Perdue and the legislature is looking to punish folks in this state with regressive taxes.

See below.

"An individual in North Carolina owes use tax on an out-of-state purchase when the item purchased is subject to the North Carolina sales tax and the retailer making the sale does not collect sales tax on the sale."
http://www.dornc.com/downloads/D401.pdf, page 7.

So if the vendor collects tax, the individual purchaser does not owe it. (The worksheets in the instructions may cause confusion now, but the taxpayer's estimate overrides, for reporting purposes, the results of the worksheets: "If you believe the estimate from the table is too high for your out-of-state purchases, you may estimate what you think you owe.")

Sales taxes in general are regressive, but they vary in their regressivity. Taxing salt, for example (see http://en.wikipedia.org/wiki/Salt_Satyagraha), is way on up there.

About internet sales, I'm not sure. The kinds of things I buy via the internet are not necessities. Anyway, if you don't have a fixed address, computer access (OK, the library can supply that), internet literacy, and a credit card, I don't see how you can buy stuff over the internet.

There’s some interesting data from 2008 at http://blogs.zdnet.com/ITFacts/?p=14001, which says that of folks who had bought online then, 19 percent had incomes over $100k, while 13 percent had incomes below $25k; of folks who had not bought online then, 7 percent had incomes over $100k, while 19 percent had incomes below $25k.

I don’t know enough about regressivity to make much of a conclusion. Amazon probably has a lot of data – ZIP codes would tell a lot – about the demographics of its customers, but I’m not holding my breath for disclosure.

Meanwhile, it’s easy to see why Amazon is stirred up: folks understand that if they buy from a local merchant or local chain, they pay a tax that Amazon lets them avoid. Here’s a piece from 2000 by Austan Goolsbee, an Obama economic advisor on TV a lot these days, suggesting that “applying existing sales taxes to the Internet might reduce the number of online buyers by as much as 24 percent or more.” http://faculty.chicagobooth.edu/austan.goolsbee/research/intertax.pdf

Apparently they are bigger assholes than even I thought.

Amazon: You guys need to get your shit together. This troll is laughable.