Online retailers get boned in Kalifornia
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Old 07-01-2011, 09:44 AM   #1
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Default Online retailers get boned in Kalifornia

California tells online retailers to start collecting sales taxes from customers

It seems the Peoples' Яepublik of Kalifornia hasn't done enough to drive businesses out of the state so now they're going to lose even more with this bit of insane stupidity. But it has joined 6 other states in this idiocy -- Illinois, Arkansas and Connecticut acted earlier this year, North Carolina and Rhode Island in 2009 and New York in 2008.

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Both Amazon in Seattle and Overstock in Salt Lake City have told affiliates that they would have to move to another state if they wanted to continue earning commissions for referring customers.

"We oppose this bill because it is unconstitutional and counterproductive," Amazon wrote its California business partners Wednesday. Amazon has not indicated what further actions it might take to challenge the California law.

Many of about 25,000 affiliates in California, especially larger ones with dozens of employees, are likely to leave the state, said Rebecca Madigan, executive director of trade group Performance Marketing Assn. The affiliates combined paid $152 million in state income taxes last year, she pointed out.
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Old 07-01-2011, 01:00 PM   #2
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I think this is coming to every state soon...They need Money....

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Old 07-01-2011, 02:24 PM   #3
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I always assumed that if you purchased items on line and didn't pay sales tax it was up to you to keep track of it and report it on your state income tax form.

That's what I do.

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Old 07-01-2011, 03:57 PM   #4
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Now that sucks for the people in CA, good thing I dont live in CA

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Old 07-01-2011, 04:01 PM   #5
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Good thing I don't have an online business in California.

I shook the dust off my sandals when I moved out of CA and only return when I have to.

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Old 07-01-2011, 04:35 PM   #6
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That's one reason I live in Texas, no state income tax.

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Old 07-01-2011, 04:51 PM   #7
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Kalifornia isn't the most expensive state to live in, but it's in the top five.

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Old 07-01-2011, 05:04 PM   #8
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Originally Posted by cpttango30 View Post
I always assumed that if you purchased items on line and didn't pay sales tax it was up to you to keep track of it and report it on your state income tax form.

That's what I do.
While true, the vast majority of people are not as honest and upstanding as you and simply claim to not have bought anything from out of state. Either that or they fail to keep track of everything and grossly under-report.
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Old 07-01-2011, 05:08 PM   #9
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In Washington we have had to pay sales tax for online purchases if the seller is incorporated in this state for years now. All the big sites, (Amazon, Cabelas, etc.) are already incorporated, so we have paying it for years.

This Kalifornia law appears to be a very similar deal. If the click through agent, or the selling company, has ties to Kalifornia then they have to collect the sales tax.

However if someone from Kalifornia goes to an out of state companies website without aid of a click through or search engine, they do not have to collect the sales tax as I read it.

While I can see the need for the taxes on Commerce, I don't think it's fair to tax on an out of state product if that company has nothing to do with your state.

In the old days, before the Interwebz (scary thought I know), there was a family owned maple syrup company in Wisconsin that we would or from via telephone. I continued to do so for years after I moved out and they never charged me tax. I consider this the same thing and should not be taxed just because you can't balance a frigging checkbook!

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Old 07-01-2011, 05:39 PM   #10
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...
This Kalifornia law appears to be a very similar deal. If the click through agent, or the selling company, has ties to Kalifornia then they have to collect the sales tax.
...
No, I don't think that is what this law is. The best way for me to explain this is by example.

Say I live in California and I have a blog/website etc. where I post product reviews of widgets. In my review I post a link to the widget on Amazon and part of the link is my Amazon affiliate ID. Now let me make clear I am most emphatically not engaging in retail sales of any sort nor am I an employee of Amazon. I don't stock product, take payments, ship products etc. I simply link to the product on Amazon. As an Amazon affiliate, Amazon pays me a small commission for any sales resulting from the link I posted (and I pay income tax on that by the way). In the past, the state of California did not consider me to be a point of nexus for Amazon. Amazon is not incorporated in Cali and has no point of presence in the state, no distribution centers etc. The new law tries to make my affiliate relationship be a point of nexus for Amazon, and require Amazon (not me cause I'm not the seller) to collect California sales tax. It should not be Amazons responsibility to collect taxes for states that Amazon does not have operations in.

The vast majority of Amazon affiliates are just small website owners trying to make a buck or at least break even on their web hosting costs. There are a few large affiliate companies that make a substantial amount of money "link spamming" all over other peoples blogs/forums etc. but the vast majority are hobbyists with a passion about something that are trying to make a few bucks.
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