back to article Amazon throws tax hissy-fit, dumps California affiliates

Amazon and Overstock have severed their agreements with affiliates based in California, in an overnight response to the imposition of a sales tax for online retailers of physical goods. Online retailers are exempt from sales taxes, but dead-broke California introduced such a law on Wednesday night. "We oppose this bill because …

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  1. BillG
    FAIL

    Ah, California

    It's no surprise - California has proven, again and again, that they don't give a damn about Federal law.

    And, if that can torpedo 25,000 jobs in this economy for the sake of politics, well, that's California too.

  2. mafoo

    change address

    Whats the bet most people are going to change their registered address to a friend or family member out of state?

  3. Mikel
    Coat

    Just a minor quibble

    The state sales tax is 8.25 percent, but Amazon would be obligated to collect city and county sales taxes as well for 1200 tax regions with no coherent system of determining how much tax to pay. The sum of these taxes can be as high as 10.75 percent. The cost of accounting for all of the different jurisdictions, answering to 1200 auditors, and the customer service hassle of dealing with people who think they're charged the wrong tax adds up also.

    It's not just a "pay the tax" issue, and it's definitely not just 8.25 percent.

    1. Chrisfs
      FAIL

      More whinging

      OH NO keeping track of sales tax!. Amazon can keep track of the prices and arbitrary price changes in thousands of products but is flummoxed on keeping track of sales tax. Let's say 1200 is an uninflated figure (Ha!) and there's 100 city and country sales taxes, That's 1300 entries on a one time basis. I, myself, have done that. It takes one moderately fast person a few days.

      Sales taxes don't change every day, they change AT MOST once a year. Most don't change for many years. keepng track of this would be negligible for amazon.

      If it can't hack this, it shouldn't be in the internet business.

      Lastly, Amazon has to have a physical presence somewhere in the US. It's warehouses must be somewhere and it's not even paying sales tax there. This is not about logisitics which Amazon has solved and more about not wanting to collect sales tax because it benefits their business model.

      1. ArmanX
        FAIL

        It's an honest concern, actually

        Actually, keeping track of prices is easy - any time a price changes, it's because someone changed it on Amazon's site. It's a "push" operation. Meanwhile, if the tax law changes for one of the thousand-odd tax divisions in the US, no one has to inform Amazon of it. Never mind the various rules - tax free days, non-taxable items, the list goes on.

        But here's an interesting twist - you're responsible for sales tax, regardless of state. Not all companies are required to collect that sales tax, but every time you buy something (assuming you're in a US state), you are required by law to save your receipt and pay any sales tax you owe at the end of the year. Do you do that? If not, why do you expect Amazon to do so?

      2. MD Rackham

        AT MOST once per year?

        Clearly you've never dealt with sales tax updates. Changes are much more frequent as local levies expire/start.

      3. eye.spy.3x
        Alert

        Check your facts

        Actually Amazon collects taxes in Kansas, Kentucky, New York, North Dakota and Washington.

      4. Anonymous Coward
        Anonymous Coward

        Why?

        "Lastly, Amazon has to have a physical presence somewhere in the US. " - see title.

        1. Mark 65

          Re:Why?

          Indeed, could they not just move to Canada or Mexico?

    2. theAltoid
      Facepalm

      no excuse

      No coherent coherent system of determining how much tax to pay? Its called a Data Base. You can see a list online, here:

      http://www.boe.ca.gov/cgi-bin/rates.cgi?LETTER=L&LIST=CITY

      Surly Amazon could write a small pice of code to calculate the tax based on zip code, just like other large retailers. If I order online from HP, they manage to calculate the tax without a problem.

      And even if it is difficult, it the law.

      1. Destroy All Monsters Silver badge
        Facepalm

        "And even if it is difficult, it the law."

        The last refuge of the tax feeder?

        1. theAltoid
          Facepalm

          Equality

          Not the last refuge of a tax feeder, the last refuge of a tax payer. Every time someone avoids paying tax, legitimately or otherwise, everyone else pays the tax for them. Every idiot knows this, which causes the persistent race to pay as little in tax as possible.

          I am amazed that, as a business entity in the US, every time I fly, eat a meal at work, buy a computer or pencil, some poor, hourly worker is paying for part of my expenses. It is true insanity. Even more so when fortune 500 corps lobby to write the tax code to their advantage.

          Taxes should be based on income, not profit, and for business, a simple fixed percentage. That way, I could fire my accountant and calculate my own taxes, and large corps would have no advantage when paying taxes. It would even support the bullshit meme about business confidence being undermined by uncertainty.

          1. EyeCU
            FAIL

            Tax on income - really?

            Please enlighten me with your financial expertise but how exactly would that benefit anyone? For example tax is set at 10% for every business based on income. Manufacturer A has income of £1m per year, but 90% of that is costs involved in making the product leaving £100000 profit. A second manufacturer has the same turnover as manufacturer A but only 50% in costs leaving £500000 profit. By your reasoning manufacturer A should pay 100% of its profits in tax while manufacturer B only pays 20% of its profits.

            Manufacturer A decides to shut down as they are not in business to make no money leading to more job losses and even less tax being paid while Manufacturer B ends up with masses of cash in the bank all tax free.

            I am so glad you are not in charge of a complicated financial system like an economy.

            1. theAltoid
              Pint

              enlightenment

              I'd be happy to enlighten you. And there is no need for the tax system to be complicated.

              Taxing income is how US personal income tax works, albeit with a minor percentage rate increase as income grows. I pay a personal income tax regardless on how much my kids school cost, how much my phone bill is, etc. The Feds and my State don't care how profitable I am as an individual. They bill me on my income. Why should it be different for corps?

              As a business, the rate I pay for my paper, utilities, travel, etc is largely independent of how profitable I am. If I print frequently, then 10% of my income might go on printing. Why should taxes be different? Why should the tax structure be biased against profitable companies, but sympathetic to companies that can't make profit (or pay taxes). Why should other tax payers support low profit companies? Why should working class, or indeed any tax payer, subsidize lawyers, advertising, sporting events, the olympics and fancy hotels, or any business activity that a business requires to function? If the business needs lower taxes, reduce the headline rate.

              Moreover, a tax system should be fair and equatable. Profit based taxes induce all sorts of undesirable behaviour, from booking business class tickets, as "otherwise it will go in taxes" to cooking the books/system to appear to make no profit (off shoring, Ireland until recently etc.) benefits for firms that can afford good accountants, etc. Please note that this is income tax I am referring to, not a UK style VAT.

      2. Lance 3

        Try again

        The zip code doesn't tell them everything they need to know. 90% of the city I live in is in one county, I'm in the other 10% and yet the zip code is the same. This zip code is also in a small part of another city. So, who gets what when you have state, county and city sales tax? The state would get theirs, the city and county, well, they may no as it could go to the wrong county/city. Don't think it could happen? The STATE found they were paying the wrong city the sales tax. So, if the state entity that collects the sales tax and then distributes it cannot keep it straight, then how could Amazon? So, your view that all you need is a zip code is NOT correct.

  4. Gannon (J.) Dick
    Go

    Does ths include ...

    ... the Facebook Currency ? Poor Mark's margins are only 30% I hear.

  5. theAltoid
    Pint

    Nexus, not presence

    The 1992 Supreme Court ruling spoke not of a physical presence, but of a "nexus". As such, Amazon appears to violate state tax law.

    1. Daniel 4
      Flame

      Nexus vs. Presence

      Amazon only has a nexus in California if their Affiliate program counts as such. So far, various courts have been pretty clear that it did in other states, no matter what Amazon's rhetoric says. That said, the sales tax system in this country is an absolute bloody mess - no consistency, many states do have hundreds, possibly over a thousand different jurisdictions (no, this is not an exaggeration), the rates change many, many, many times per year with no obligation to push those notices out to retailers, some states tax food, some don't, some tax it but at a different rate, some tax luxuries higher, etc. - the worst that people are complaining about in the forums here really is true. Amazon is big enough that they /could/ cope with it, but the question is: is coping with it worth it to them, or are they best served just dropping their nexus in any state that tries pushing them? Since aside from a handful of states they have their own facilities in the only real "nexus" they have /is/ their affiliate programs, how much are they worth to them? I suspect that they are worth a /lot/ less than screwing around with every US State's tax individual sales tax code.

      Remember: This isn't about Amazon /paying/ taxes to California, it's about Amazon /collecting/ taxes for California. Amazon pays no more or no less taxes one way or the other. California would like to make Amazon into a branch of their own tax enforcement division, the same way that they (and most of the States) have nearly every other business. Personally, I don't blame Amazon for saying no - if I had the choice, I wouldn't want to become California's tax gatherer either. Let California send out letters to their residents reminding them about paying their "use taxes" (sales tax for out of state purchases that you never paid tax on). It's a California issue between the State and it's residents.

      -d

      1. Dave Bell

        California really can be stupid

        There's a lot of complications with sales taxes, including multiple overlapping levies for different purposes, but, as far back as I can remember, California's collection agency has had a bad reputation: they're willing to spend more on pursuing an untaxed transaction than they'll ever collect. The State also has some serious problems at the political level, which can be summed up as government by referendum.

        So things in California can be particularly messy. The basic sales-tax problem is nothing new--mail-order catalogues have been around for a long time--and I have some sympathy for businesses over the complications within the American system, but as companies such as Amazon kill off the local, taxable, retailers, all the States are going to be looking at solutions such as this.

        We have something of the same problem in the EU, over VAT. I would be unsurprised if most of us have taken advantage of the limited concession available on purchases from the Channel Islands. But there is a limit. On larger purchases, the VAT would be collected. But there's a uniformity that the USA doesn't have.

        In the end, I find it hard to have any sympathy for Amazon. They're profiting from tax avoidance, rather than running a better business. But there's plenty of stupidity in this for everyone involved to have their share.

  6. dssf

    8.25%

    In Alameda County, at least in the city of Oakland (at least at Smart & Final), the sales tax I paid was 9.7767%. A $12.99, 1-gallon bottle of softsoap caused ~ $1.27 in tax...

  7. Anonymous Coward
    FAIL

    so you telling me that a online retailer cant....

    even get a script added to thier billing system to decide if the destination address is in a particular state (y) that has tax rate of (x).

    ffs even a indian call center monkey can work that out from 7 thousand miles away in a call center.

    just shows that americans, even when faced with the fact thier economy is hurtling off a cliff they still cant decide or accept that they are going to have to pay more TAXES (or any taxes for once!)

    to save themselves from a future that would make afganistan look like a leading first world economy !

    can you imagine how they would feel if they had a sales tax of 20% as we do in the UK.

    americans.... a bunch of whiney whimps who only know one tune (me,me,me)

    1. Chad H.
      Meh

      I'm sure they can

      But they don't want to.

      As long as they don't have a physical presence, then paying the sales tax is the customers responsibility - they're supposed to report it to the state and pay it (like thats going to happen).

      Amazon would rather not play California's taxman.

    2. ArmanX
      FAIL

      It's not as easy as "per state"

      Every city/county/tax division can have their own tax rates and rules, as well as different rules for different zip codes (or other tax divisions). Rules include no taxes on certain days of the year, non-taxed items (ie, food), items that are only taxed when bought in bulk, items that are taxed at a different rate than others (alcohol, tobacco), even items that are taxed differently *depending on time of day*.

      And these rules change depending on the individual tax division's dates, not as per a standard.

      Oh, and if you overtax someone? BIG trouble. Shut-down-the-company trouble.

      And how do you look all these up? Online? Good luck with that.

  8. Anonymous Coward
    Anonymous Coward

    silly country

    Its insane that the US is happy to insitutionalise a competitive disadvantage for physical retailers (thereby destroying local employment for the benefit of out of state organisations). Maybe it made sense to stimulate online sales fifteen years ago, but it doesn't now. If the American political system wasn't so ridiculous you'd simply pay sales tax based on point of delivery and send a cheque to each state by volume every year. But nooo, that would be too simple.

  9. me n u
    WTF?

    California needs the money

    The Golden "Socialist" State of California! They need the revenue to pay for all the illegal alien's benefits!

    I hate California! I hate socialism! Get a job you liberals! (Even if you don't like it)

    1. Anonymous Coward
      FAIL

      You forgot ...

      ... their gun laws.

      Please, if you rant, do it properly.

  10. BlueSkyMike
    Linux

    Just Stupid

    There is stupidity on both sides of this issue.

    First, the state of California. All Amazon affiliates in the state PAY INCOME TAXES. California just wiped out millions of dollars in income taxes overnight by passing this law. Now they will get zero dollars in income tax and zero dollars in sales tax. Plus they put a bunch of people who make a living off the program out of work. For about $1000 you can setup a business in Wyoming or Nevada. The big boys will do this and they will continue pretty much unaffected, but they will pay $0 in California taxes. Reducing tax revenue even further. This really hurts the small bloggers who are just starting out and making a a couple hundred dollars a year. They are just screwed.

    Amazon is stupid for not fighting these laws. They have the money and the lawyers to take the states to court and win. This is settled law. Mail order businesses have existed in the US for decades and they never had to collect sales taxes. Several Supreme course cases support this position. And essentially, Amazon is nothing more than a mail order business without the paper catalog. However, they choose to instead fire their associates and let them fight it out in court on their own. Thus taking years to get a resolution.

    A few hundred dollars may not mean much to some of he elites on the net. But it means a lot to struggling families in a bad economy. Shame on both sides.

  11. W. Keith Wingate
    Black Helicopters

    One more reason the US is overdue for a VAT

    'not saying it's good or bad, but it's coming.

  12. MD Rackham
    WTF?

    And what does sales tax have to do with margins?

    Sales taxes are collected from the end-user and passed through to the state. Yes, that takes some accounting effort which adds cost, but it has nothing to do with operating margin.

    The article makes it sound like sales taxes have to be paid out of Amazon's pocket.

    Yes, it does make them slightly less attractive since the total cost to the end user goes up, but, seriously, it would take a hell of a lot more than that to get me to step inside a Walmart.

  13. Chad H.
    Devil

    Not a hissy fit

    This isn't a hissy fit.

    They shot the hostages - just like they said they would.

  14. Zippy the Pinhead
    Stop

    its a bogus argument

    Since once the sales tax makes it into a database your tax could automatically calculate

    If the argument was valid then Amazon wouldn't be able calculate shipping to your address on the fly. So what makes it so hard to tabulate the price of the sales tax and then automatically cut an e-check once a quarter to proper jurisdiction.

    Amazon it just upset that they won't be able to automatically undercut brick and mortar stores 8 to 10% anymore just because they don't add sales tax.

    I could be wrong but I believe that the sales tax exemption they are referring to has run out.. Not really sure about that though.

    1. BigFire

      Re: zippy

      This is not about the sales tax increase that will expire tomorrow.

      The California state government want to charge the sales tax across the board. Not that they'll actually get the money, as Amazon have demonstrated. The state will not collect on the income tax that the California bloggers will no longer be making. The sales tax won't be there since Amazon have terminated all California affiliate program. And Amazon will see a small drop in their sales, but will go on.

      The morons at Sacramento just cannot stand the thought that someone somewhere in California is making money, and went out of their way to make sure that doesn't happen.

    2. Daniel 4
      FAIL

      Read the Forum

      There are multiple reasons that that argument is flawed. We'll start with: Because tax levies change CONSTANTLY (at least, once you consider how many taxing bodies there are in this crazy nation), and for some reason the municipality of, for example, Podunkville, Iowa doesn't send out a notice to every single reseller in the country when they change their tax rate .25% - but sell something to one of the fifty people living there and collect the wrong amount of tax when you are obligated to do so and you are in trouble, boy.

      There are plenty more reasons, but really, just go re-read the forum. There are very real problems here.

      -d

  15. JB
    Meh

    Selfish buggers

    What is this phobia for paying tax in the US? I moved to CA from the UK and just don't comprehend how selfish otherwise intelligent people are here. You get the feeling that they don't want to pay tax because it's spent (wasted?) on poor people. At the same time, everyone wants European-style social services, roads, public transport, etc. If they want European style services, they have to pay European style taxes! Personally I would pay more tax to help California out, but I guess I'm a a majority of 1!

    If I could convince my American wife to move to the UK or Scandinavia, I'd be a happy man. This state is going down the toilet fast.

    1. Captain DaFt

      American tax phobia

      I believe this gent has a clue:

      http://salmagundi.webuda.com/2011/05/27/on-raising-taxes/

      Basically, for decades, every politician seeking office has told the US public that they're paying too much in taxes, and if elected, will rectify the "gross injustice". So now saying that more taxes are needed just sounds like gibberish to US citizens.

    2. David Beck
      Thumb Down

      Do you trust politicians to spend your money?

      I don't.

      I live in the UK and am taxed at the rate of 52% for part of my income. It would be more but I'm over 65 and no longer pay employee NIC (social security). This does not include any "consumption" tax such as "sales/VAT" taxes, fuel duties, road tax, TV licences, ...

      I know I can spend that money to better effect for my family than any government.

      1. CD001

        Sort of the point

        ----

        I know I can spend that money to better effect for my family than any government.

        ----

        That's sort of the reason WHY governments collect the tax from you - you'd spend it on YOUR family - not on say, a battered wife in a refuge shelter escaping an abusive husband.

        Part of collecting taxes is for the good of society (you know, fellow human beings) - to help those who, through no real fault of their own, are unable to help themselves.

        ... of course a lot of it is collected to line the pockets of the already rich (jobs for the boys), quangos, failing banks or to pay for spongers (people who ARE capable of helping themselves but won't), fraudsters, junkies, prisoners and breeders with their endless sprog dropping habit that kicks in as soon as their youngest child is too old to qualify them for benefits.

        If people were less shit, selfish and died younger they'd not need to collect as much in taxes.

  16. Martin Usher
    Meh

    Taxes should be paid on on-line purchases

    Its popularly assumed that anything bought on-line is exempt from State sales tax. This is not true, its just that nobody pays it and the State can't figure out how to collect it economically for small transactions (<$5K). Sooner or later the states were going to figure out how to collect sales taxes; the roundabout route that California's using is due to the way that US laws work but in principle its no different from paying VAT on purchases in Europe -- just because you buy something from France doesn't mean you don't pay VAT on it.

    Amazon's reaction is predicable but I think it won't work. States are hurting for revenue so they're going to be watching very carefully what CA does and as soon as any Constitutional kinks are worked out of it are going to do the same thing.

    The explicit tax holiday for Internet commerce is at the Federal level, BTW.

  17. Anonymous Coward
    Anonymous Coward

    Whose Ox Is Gored

    I'm surprised it's taken this long. Like so many Bush-era developments; it's all about parasitic feeding masked as beneficial business.

    Stop whining, and pay attention:

    First; if you want to know tax rates, use the web:

    http://www.boe.ca.gov/cgi-bin/rates.cgi

    I bet Amazon could have a guy check those tables?

    Second, this law taxes ALL out-of-state purchases not just Amazon. The State tax rate is .0725 of every dollar spent. The average state income tax rate is .05 on every dollar. I find myself dubious that income tax on the dollars Amazon trickles down to their affiliates is going to remotely compare to sales tax collected off ALL internet sales.

    Third; I've yet to see a study that can connect business flight to sales tax rates. Wages, real estate costs and subsidies (sometimes given in the form of targeted tax exemptions) but not sales tax. In any case; give a couple of more years and there will be no place to run to.

    Repeat after me: National Sales Tax.

    Finally, low taxes are a lie for everyone but the very rich. If you aren't sending your kids to private schools, can't afford to pay cash for your medical treatments or drive your car on public roads, low taxes cost you more than you save.

    Suck it up, stop whining, and do the math.

  18. Anonymous Coward
    Meh

    Boo-hoo

    Amazon has a significant presence in California so dumping their affiliates looks like them throwing an expensive tantrum. This is from their job listings page:

    A2Z/Lab126 - Cupertino, Lake Forest, San Francisco, San Luis Obispo, Irvine

    MP3 Store - San Francisco

    A9 - Palo Alto

    Alexa - San Francisco

    CreateSpace - Scotts Valley

  19. Mikel
    Go

    It's the law - sort of

    @theAltoid - And even if it is difficult, it the law.

    Actually, the law was that using advertising affiliates were OK and let the customers report and pay the use tax. When the law changed, Amazon's options were 1)drop the affiliates or 2)collect the tax. Amazon is complying with the law here in the most feasible way by dropping the affiliates. When your state makes laws like "jump through unprofitable hoops or get out" you should not be too surprised when some company takes the second option - particularly when the law is targeted so closely at that one company that in common usage it's referred to as that company's tax. There's a reason why it's called the "Amazon tax".

    These are advertising affiliates. They're websites that put up ads that redirect to Amazon products or vendors. It's not like the world is short of other places that can do that. It's not like the physical location of the owner of a blog has any meaning in the real world. They manufacture no products. They sell no products. They deliver no products. They are in no way associated with products, their sale or delivery.

    Sales taxes are "use taxes." They are levied on the purchaser, and only the collection of them is required of the seller - and only then when the seller is within the state's jurisdiction - which in this case Amazon is not. Otherwise it's encumbent on the purchaser to report and pay the tax. If California has problems with collection of use tax when their citizens purchase things from out-of-state vendors, they were better off with some enforcement action on the people within their jurisdiction.

    This law is equivalent to making a company that sells foreign widgets by mail or phone collect the sales tax because they hired a billboard company to show a picture of their product, somewhere in the state. It's not the law for any such company unless the billboard is on the Internet. It's trying to put a company in California's jurisdiction because they pay California bloggers to post their billboard. It's wrong. That's not how interstate commerce works. In the United States, states are not allowed to levy taxes on commerce bewteen the states. That power is reserved to Congress in the Constitution.

    And the Constitution is the Law of the Land.

    If California wants to try to end-around the law, well there's an answer for that - and it's this. California winds up with less taxes, not more. The citizens with billboards in more reasonable states get the money California citizens would have earned - and California citizens will see the billboards and buy the products anyway, because that's how the Internet works.

  20. Anonymous Bosch

    Taxes are more convoluted than you think

    It is not just a 'simple script' that needs to be run. California taxes clothing, Pennsylvania does not. So the script has to take into account the variations by state, by city( Philadelphia PA has a sales tax surcharge which Harrisburg PA does not, and what the city taxes may be different than the state taxes. Philadelphia wants to place a heavy surcharge on certain beverages, both alcoholic and non). The permutations of all the taxes would be a real headache. Shipping an item is rather simple. Add up the weight of all products being shipped, how many miles it is going(use zip/post code) and us a simple look-up table to determine shipping cost.

  21. Vega

    JB: Not everyone

    Not everyone wants "public" services. No, not even public highways or public schools. The government makes a hash of everything it gets involved in. Private enterprise is the best solution. Let users pay for the services they use, instead of having others pay for them.

  22. John Tserkezis

    Why pay tax anyway?

    I mean, look at Greece as an example. They have a fully functional government and no-one wants to (and doesn't) pay taxes. And they *STILL* manage to make it work just fine.

    No wait...

    1. Anonymous Coward
      Anonymous Coward

      Scale problems

      Let me know when you can pay for your own road from your home to work.

      Government action is one of several ways to collect the resources for things which many people use. And it can make mistakes. So can private enterprise. There are conflicts associated with arrangements that allow people to take a profit.

      Consider the example of Enron.

      I wouldn't want to live somewhere that only used one system to handle these problems. Whichever way it's done, there's less competition, less chance to find a better answer. That was one of the big weaknesses of the Soviet Union, and in some ways the modern USA is becoming a mirror of that: corporatism instead of communism as the only possible answer to every problem.

      1. David Beck
        Thumb Down

        Toll Roads?

        I use toll roads all the time in France, I assume these are "private" roads.

        Enron is a good example, if any government was a corrupt as Enron it would, wait for it, continue on as normal. Corporates are held to a much higher standard than governments. If a corporate was in the state of the US economy it would be long gone.

        1. Anonymous Coward
          Anonymous Coward

          Bad Assumptions

          The French toll roads are owned by the governement, and let as concessions. They were originally built with public moneys, government loan guarantees and some private funds in the mix. They were strictly built to specifications made by the French government.

          In the US, most toll roads are built, owned and operated by the states.

          I have worked for a couple of Fortune 500 companies that were essentially bankrupt; they still pay dividends today.

  23. Jonjonz
    Boffin

    Korporate Welfare

    No one wants to pay for infrastructure, and guess what, now it is decaying at an alarming rate. You dont get working sewers, roads, fire, police, and social amenities for free, but hey things are not so bad in China...

  24. Jonjonz
    Boffin

    Taxes 101

    For most of the dim bulbs out there. Guess what the greatest expense of local government it? Police and Fire. I.E. providing security for everyone's assets.

    Think about it. The more assets you have, the more value you derive from the US security system. Taxes then should be based soley on assets, not income. Do do otherwise is pure wage slavery.

  25. gafisher
    FAIL

    For What?

    Taxes are assessed to pay for the benefits they provide. California offers Amazon no direct benefits. Under what pretense could California (or any other government or unit of government) charge for providing nothing?

    If California chooses to charge California residents for internet purchases, they need to pursue the residents, not the retailers.

    1. theAltoid

      Exactly

      "Taxes are assessed to pay for the benefits they provide. California offers Amazon no direct benefits."

      Not so much. Taxes are assessed to pay for benefits for the people (AKA government), not the entity paying the tax.

      "If California chooses to charge California residents for internet purchases, they need to pursue the residents, not the retailers."

      Really? When you buy petrol, the government ca't charge tax via the petrol station, it needs to pursue directly?

  26. The Nameless Mist
    Facepalm

    you sell something .. you pay taxes

    I fail to see why people are arguing about paying taxes.

    If you sell something and the state says there is a sales tax then you pay the tax.

    Its the STATE's duty to enforce the failure to pay the tax.

    What California is trying to do is get AMAZON to handle the processing of the taxation when they are acting as a "shopfront" for other retailers (their associates).

    As any company is under a duty of care to maximise profits (legally) then if California says "you must do the tax gathering work for our state" then Amazon has to look at this and say:

    "a) we shoulder the cost of this extra processing in people & computer time / power & equipment costs)"

    OR

    "b) we get out of the market where we are going to be forced to expend cost for no financial benefit"

    The duty of care clearly points to option B) as being the valid method to follow.

    No company is going to do work for another organisation without a benefit in some form.

    1. Chad H.

      Well

      The benefit is they get access to California's market.

      Every retail store has to do this in California - work as taxman - Amazon is shirking its responsibility.

  27. beckyshaw
    FAIL

    Screw Amazon!!!

    http://www.theregister.co.uk/Design/graphics/icons/comment/fail_32.png Whether they should pay taxes is debatable. The fact that I spent countless hours creating a customized affiliate store and they went and yanked it with such little warning really sucks.

    I will never do business with Amazon again... buying or selling.

    1. Anonymous Bosch

      Screw your state legislators, NOT Amazon

      Amazon gave fair warning to California about the results of passing this law. Go complain to your duly elected officials who just stabbed you in the back.

      1. Chad H.

        @ Bosch

        So if a 3 year old says "Give me a lolly or I'll scream" and then screams when no lolly is presented, the scream is the parents fault for refusing the demand?

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