Tuesday, June 30, 2009

Amazon Drops Rhode Island Affiliates to Avoid Tax

I just received my first payment from Amazon last night, so this is interesting, "Amazon Drops More Affiliates to Avoid Tax":
Amazon.com Inc. ended its business relationships with marketing affiliates in Rhode Island so the online retailer could avoid collecting sales tax in the state.

Rhode Island's state legislature recently passed a bill that would force companies to collect sales taxes if they have online-marketing affiliates—businesses that get a sales commission by featuring links to outside e-commerce sites on their own Web sites—in the state.

The Rhode Island termination follows a similar move by Amazon last Friday to end its relationships with affiliates in North Carolina as the state approached passing a similar law. Cash-strapped states across the country have looked at similar legislation to boost revenue. Such a law went into effect in New York last year.

Amazon, based in Seattle, sent an email to its Rhode Island affiliates on Monday saying that it was closing their accounts immediately. "This is a direct result of the unconstitutional tax collection scheme passed by the Rhode Island General Assembly with a veto-proof majority," said the message.
Check Memeorandum as well.

Also, Amazon warned California lawmakers about taxing its business in the state. See, "
Amazon Threatens California Over Sales Tax."

It'd be disappointing to lose a newfound revenue stream from blogging. But more importantly, it'd be a collossal tragedy of economic stupidity if tax increases simply wiped out huge sectors of Internet commerce nationwide. It's certainly happening in a few states already.