Online retailers get boned in Kalifornia

Discussion in 'The Club House' started by AcidFlashGordon, Jul 1, 2011.

  1. AcidFlashGordon

    AcidFlashGordon New Member

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    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.

     
  2. LONGHAIR

    LONGHAIR New Member

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    I think this is coming to every state soon...They need Money....
     

  3. cpttango30

    cpttango30 New Member

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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.
     
  4. Minionsram

    Minionsram New Member

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    Now that sucks for the people in CA, good thing I dont live in CA :)
     
  5. CHLChris

    CHLChris New Member

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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.
     
  6. Glasshartt

    Glasshartt New Member

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    That's one reason I live in Texas, no state income tax.
     
  7. CA357

    CA357 New Member Supporter

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    Kalifornia isn't the most expensive state to live in, but it's in the top five.
     
  8. camiller

    camiller New Member

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    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.
     
  9. Dillinger

    Dillinger New Member

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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!

    JD
     
  10. camiller

    camiller New Member

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    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.
     
  11. Dillinger

    Dillinger New Member

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    Okay, I understand. But, in your example, are you affiliated to Kalifornia by way of business license or other official paperwork?

    I do agree that Amazon should not be held liable for taxes to a state they have vested interest in.

    In your example, do you pay State Income tax on your click thru widget payment? Or just Federal?

    Because if the Law of the Land is State dollars in the form of State Income Tax, and you are not paying it, then you are in violation. However I think the dollar amount would be based on the payment to you, the State "representative", not on the value of what Amazon sold.

    If Kalifornia wants tax value on what was sold by Amazon, I would do exactly what Amazon is doing and fighting it.
     
  12. Jpyle

    Jpyle New Member

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    Gotta love lawyers and legislators...Nexus, what a great way to reach across the country into someones pocket. Nexus is one of those legal constructs that can be interpreted and reinterpreted by the Courts until the States finally get their way. Didn't POTUS recently rule that States had no taxing authority without Nexus and to attempt such was intervening in Inter-state commerce...a big no no. What CA is attempting here is a reach around to the Court ruling and a redefinition of the activity that establishes Nexus; all in an effort to grab more tax dollars to fund more wasteful programs.
     
  13. camiller

    camiller New Member

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    You don't have to have a business license to be this kind of affiliate. At least in the state I live in.
    Both, I assume that Amazon affiliates get some sort of 1099 type of paperwork at the end of the year.
     
  14. JonM

    JonM Moderator

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    we in wisconsin dealt with this issue 2 years ago or so. the wis supreme court ruled it is not the responsibility of the consumer to collect a sales tax and report said sale to the state. the onus was ruled to be on the state to collect any tax. so due to that ruling we dont have tax on out of state mail order sales.

    if i order over the web or by mail from a company locatated out of state no tax if the company is in state then i pay sales tax. our supreme court ruled it illegal for the state of wis to collect a tax from a company that isnt located is wisconsin.

    the democrats wanted badly to tax all interweb sales in wisconsin it was fought and the people won