Amy, I'd help you, but they're doing the same thing here in CT. It sucks big time.

Greedy pigs.

Our legislature did the same thing a couple of months ago. Stupidity of epic proportions.

Yet another reason to stay out (or move out) of the People's Republic of California.

As for notice, I suppose you weren't paying any attention when exactly the same thing happened in other states. Did you have all your eggs in the same basket? Thought you had a book... oh, I see you still do. You are a good writer -- how about doing another, only self-publish?

Amazon is not squeaky-clean on this, but I think they are ultimately on the right side. And The PRCa is being run by morons.

Seems to me that Danny's beef is with the State of California, not Amazon.

California is who made you pawns in their battle with Amazon. You should blame your irrational elected officials rather than a company making the only rational business decision available to them.

That sucks! What exactly is Amazon's problem with California?

Never mind, just saw the post you put up earlier about it - wow, California, way to fail. How many times will stuff like this have to happen before governments realize that just hiking taxes doesn't automatically equal more revenue?! I'd start sending some nasty letters to Jerry Brown's office - or, excuse me, Governor Moonbeam.

Wow, how awful. I'm very sorry about this. I sure hope you will get the kickbacks up to this point. I know I just ordered over $100 of stuff on Amazon and did it through your links, so I really hope you'll get it!

Eh, it's not just California "going after" the sales taxes. Bricks-and-mortar retailers have been protesting what they see as Amazon's unfair advantage (not collecting sales taxes) for quite some time, and they're in your legislator's ear. There was a full page anti-amazon ad in the WSJ a few weeks ago, paid for by some retail association if my memory serves correctly.

Amy,

CA is arguing that Amazon has a "presence" in CA because it has a sales rep (you) and it must collect sales taxes.

What it needs to be litigated is if your involvement with Amazon (merely having a link to Amazon) qualifies as a sales activity to create enough Amazon's enough "presence" in CA or not.

My answer is no. As long as Amazon does not own offices and employees in CA, CA's attempts to collect sales taxes from Amazon will eventually fail in the court.

Meantime, please do not waste your time and money in creating LLC in other states to get around this. The fact that you own an LLC created in Montana which is doing business in CA will not change the fact that you or Amazon might have enough "presence" in CA.

By creating a LLC in other states to get around this problem, you will end up with exactly the same problem as the Amazon has with CA right now.

There's something missing here.

Read this and answer it, please:

Does Amazon pay sales tax in its state of record? What does it pay?

Because I do not get how it doesn't have to charge the tax for the destination state when it ships.

I've done business with a few other retailers who collect it. When a trucker goes through your state, they pay a fuel tax for the miles traveled, even if they didn't buy fuel.

It is the contrast, not the principle, that is shocking people. Well, along with the stupidity of not leaving the program in place and taking the price hit with the little people "partners". All that's going to do is fail to serve consumers.

But there was never an explicit right to mail-order things tax-free!

What exactly is Amazon's problem with California?

Amazon does not have a physical presence in California (no stores, offices, or warehouses) and, therefore, was not before this law required to collect California sales tax on purchases made from California.

You, the purchaser, were required to report your online purchases on your annual tax return and pay the requisite taxes.

Because most people don't report their online purchases and remit the requisite tax to the state, California is missing out on what it considered a revenue opportunity.

The new California law says this any business that has a virtual presence in California (affiliated retailers or businesses) must collect and remit California sales taxes on all purchases made from California.

Amy is based in California and, as an affiliate of Amazon, gives them a virtual presence in Califronia. Meaning Amazon would be required under the law to collect and remit California sales tax to the Franchise Tax Board.

California is going after Amazon to perform the functions its citizens refuse to perform - namely that of tax collection.

"Because I do not get how it doesn't have to charge the tax for the destination state when it ships."

As long as Amazon does not have employees doing sales and property in the destination state, it does not have to collect sales taxes.

The argument is that Amazon does not use any of destination state services, water, air or police to create enough "presence" to do business.

What Amy does for Amazon is to create a link in her web site. CA is arguing that Amy, CA resident, is doing sales work for Amazon and this creates a "presence" in CA. After all, Amy is drinking CA water and breathe CA air.

Personally,I don't think what Amy does for Amazon qualifies as a sales activity to create "presence". What CA is doing is wrong and unfortunately, Amazon caved in.

"Because I do not get how it doesn't have to charge the tax for the destination state when it ships."

Because one State has no right to tax a business in another State. Legally, it is really that simple.

Practically, it would be a nightmare to handle. Perhaps huge retailers like Amazon could deal with the thousands - perhaps tens of thousands - of local sales tax rates in the country. It is certain that no small retailers could ever do so.

By the way, the so-called "use-tax" is also arguably illegal. Taxes must apply to everyone equally. A use-tax specifically only applies to people who purchase from out of state - people who purchase in-state are exempt. Justifying this exemption because the people paid some other tax is dicey at best. Probably the only reason this hasn't been tested in court is because a use-tax is utterly unenforceable, and almost no one bothers to pay it.

The real, underlying problem is the ever-growing hunger of governments for more and more money, no matter how that money must be raised. This is killing the economy, not only in California, but in the entire country.

But there was never an explicit right to mail-order things tax-free!

This isn't about tax-free.

When you order something from a non-physical retailer (catalogue or online) based in another state, if the retailer does not have a physical presence in your state, the retailer is not required to report, collect, and remit the sales tax.

You, as a citizen of your state, are still required to pay the tax.

Many catalogue/online retailers do have a presence in individual states (e.g., Victoria's Secret also has retail stores), so they collect sales taxes for those states. Otherwise the states could assess penalties on the in-state operations.

Bricks-and-mortar retailers have been protesting what they see as Amazon's unfair advantage (not collecting sales taxes) for quite some time, and they're in your legislator's ear.

Amazon's biggest advantage is not the lack of sales tax.

It's the lack of brick-and-mortar costs (rent, inventory, employees, signage, etc.). And it's the ability to stock slow-churning items that sell infrequently.

Brick-and-mortar stores need inventory turnover to bring in revenue that pays the costs of maintaining multiple storefronts. Amazon's warehouse model can keep in stock slower-moving items without incurring significantly higher costs. And the affiliate program means that the stocking costs for some of those items is borne by the affiliate, making it even cheaper for Amazon.

Another advantage Amazon has is online links. I can't walk into a Brooks Brothers, see an ad for a book on fashion, and walk through the ad to the checkout counter in a Barnes and Noble to purchase the book and then backspace myself back to the Brooks Brothers to buy a shirt.

I think the biggest fear for brick-and-mortar stores (at least book, video, and music ones) is digital content delivery. I don't have to wait three days to be reading the latest best seller, listening to a new album, or watching a movie ordered from Amazon anymore. I can order the digital version and be enjoying it in a few minutes. Now, the only real advantages bricks-and-mortar have (no 3-5 day wait for delivery and no delivery charges) are gone.

And states are anxious to collect sales tax revenue on digital content as well.

Netflix is next in the cross hairs.

And Congress is looking for a way to tax e-mail, online flyers, and virtual coupons to make up for lost Post Office revenue.

As someone who has used your links (bought a couple iPads for my company), I am a little pissed at CA, but not surprised. I've seen an estimate that CA will lost $150 million in income taxes from people like yourself, and no increase in sales tax.

I would advise you just use a mailing address in another (tax-sane) state. Amazon won't know the difference, and the Direct Marketing Association will litigate this and it will be held unconstitutional. (Really, does Amazon have a presence in CA because you put advertising links on your website? The Quill decision by the Supreme Court has said no for printed materials (catalogs, etc.).

They make it sound easy to comply with sales tax laws, but this isn't just "California" - a single transaction may have 4 different juristdictions in CA (state, county, city, transit), depending on where the shipment originates and where it goes.

Don't blame Amazon - they don't have to/want to collect sales tax for states they aren't in. And I'm sure all of us follow our obligation to file a use tax return for these out-of-state purchases, right?

The argument is that Amazon does not use any of destination state services, water, air or police to create enough "presence" to do business.

The argument is that only Congress has the power "to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes" according to the Constitution.

Sales tax is a de facto regulation of commerce.

To expand on what Conan said, a sales tax imposed on a product purchased from another state is tantamount to an import duty on that product. And one of the explicit purposes of the Commerce Clause was to prevent states from imposing duties on products from other states, which was a common practice in the colonial days.

BTW: Amy, please check your email. I had a brainstorm on this.

This is sad event. It was pleasurable to tip Amy with Amazon's money on purchases I was going to make anyway.

Danny Sullivan thinks Amazon should collect the sales tax because it is fair. I think Danny Sullivan's thinking is wrong. Taxes are not fair - ever.

"But there was never an explicit right to mail-order things tax-free!"

Actually, I think there is. Taxation is theft. The State does not have a right to mine or anyone else's money. It is just a another gang of criminals shaking people down so that politicians and their loyal minions can live without having to produce anything of value.* The very few services that it offers (very poorly done) can and should be done by the private, voluntary sector of society.

Amazon may not have handled this in the best way, but they had been saying all along that they would do this and they had done it in other states. In this instance, I'm on their side. The bad guys and gals are the California legislature and Jerry Brown. They're not going to raise the revenue they think they are and more businesses will be leaving state.

*"The State is a great fictitious entity whereby everyone tries to live at the expense of everyone else." - Frederic Bastiat.

"When you order something from a non-physical retailer (catalogue or online) based in another state, if the retailer does not have a physical presence in your state, the retailer is not required to report, collect, and remit the sales tax.

You, as a citizen of your state, are still required to pay the tax."

This is a common misconception, but it is not true.

States have no right to levy sales tax on purchases from out of state. None whatsoever.

What they do instead is create a second tax, usually called a "use tax", and set the tax rate equal to the sales tax rate. They they claim that you must pay this use-tax on anything that you purchase from out-of-state.

Use-taxes have not had any significant court challenges, because it is almost entirely unenforceable, and most people do not pay it. However, it arguably violates the commerce clause - just as a sales tax would - because it is a tax precisely targeted at interstate sales.

A use-tax also violates the principle that a taxes must be applied fairly. If the use-tax applies to one person's purchase of a widget (from whatever source), then it must apply to everyone's widget purchases - even if they were purchased locally and were subject to sales tax.

Are there any other online retainers with affiliate programs that would enable you to redirect amazon business?

Oh, man, such short notice blows chunks! So much for gathering up all my wish list items and finally buying them...

I guess I won't be able to talk you into coming to TAM now. Having TAM tickets run out yesterday didn't help, either. I'll eat a slice of bacon in your honor! :-)

A bit of googling reveals that you can rent a mailbox in Las Vegas (street address on Rainbow Blvd included) for $ 100 a year:

http://www.maillinkplus.com/

Lots of info at the link. If you can use that as your new official Amazon address...

Legalzoom will help you incorporate for a decent fee. Incorporation may be better than a sole proprietor.

"I guess I won't be able to talk you into coming to TAM now."

And you've seen me try to get her to come to DragonCon, too. TAM is lots closer. About $50 in Insight gas.

I think she's holding out for a free ride. Gregg, c'mon! Lotsa brainy people show up for these things, even introverts. (The previous line was mumbled so as not to alarm the non-boisterous.)

I get tired of the brick&mortar crybabies that they are disadvantaged by the internet. I use newegg and monoprice, which are both in California so I pay the tax, but they have both the inventory and pricing advantage anyway, and you can pick-up your order in person if you want. B&Ms can be competitive, but most choose not to be competitive either in price or stock, so let them go out of business.

K, he's off, and so are you if you're blaming Amazon. They don't _owe_ you anything. It stinks that CA is being so shortsighted, but Danny needs to get over this -- states were meant to compete with each other when our gov't was set up. If CA continues with its 'tax everything that moves' mojo, then they'll continue to see its people and businesses flee. It's that simple. If you can't elect folks to fix this, then you have an option too. People vote with their feet -- whether it's jobs or where they live.

I can't believe they gave such short notice! I purchased through your link a few times before Amy, including within the last month.

At least so far I live in a state without sales tax and I only have to deal with reporting and paying taxes on the income earned from my website, but if I use what is happening elsewhere as a guide, it will probably become far more involved and complicated to the point that I'd have to hire an accountant to handle things and that's not something my business makes enough to pay fir (it's more a "hobby" and income supplement at this point).

There has to be a way around this. Nevada has well over 600,000 corporations registered there.

Let us know how this develops, I've got a shopping list!

A lot of fiscal conservatives make the case that we should switch all income tax to sales taxes. This can't happen if online retailers won't collect sales taxes.

Amazon should stop helping people cheat on their taxes. (And I don't think people are even intentionally cheating. I just think nobody is going to go to the trouble to add up all their online purchases during the year and send a check to the state.) Even if you hate taxes, you should agree that the taxes we have should be distributed fairly. Amazon should have the same responsibilities as brick and mortar stores.

I disagree with taxing online sales.

For that matter, I disagree with pretty much any tax.

Yeah, well it sucks to live in California...for soooooo many more reasons than a tax on internet sales. I don't blame Amazon because it is all business baby. Good for them. But, you don't have to buy from Amazon. Go buy from someone else.

The problem is all of the whacko liberals in your state who want to raise more taxes to support all of those illegals you have and all of those social entitlements.

I will never go to the state of california again. Ever.

I'm back, bitches.

Rad's right. About this...

> there was never an explicit right to
> mail-order things tax-free!

...And nothing else. At all.

You missed me, you need me, and you're glad I'm here,

C.

(Well, also this: "It is the contrast, not the principle, that is shocking people.")

Amazon may have slipped by not giving enough notice. But come on, this has been happening for a while and Amazon has cancelled in several States.

Now, A is of course doing this to save themselves money. But consider what happens if Amazon, overstock.com, and the others lose. Living in CA, you find via an ad in the LATimes linking to site in RI - a jewelry store - that has the exact ring you want, so you order it. The LATimes should collect CA sales tax, as a paid affiliate? Or the RI business should? Should the RI sales tax be paid as well? That last is how RI-MA income taxes are handled if you live in one and work in the other - BOTH are withheld from your pay, then when you file your annual returns you beg one or the other to give you back whichever is the smaller amount.

"You missed me, you need me, and you're glad I'm here,"

Guilty as charged.

How dare you... We're blog-enemies.

Here's twitter joke, completely off-topic.

Another.

Joanie made crazy-shit fun of me in an elevator once. I wasn't doin' nuthin', she just wanted some practice. It was an L.A. thing.

On topic— we should at least consider the possibility that a happenstance of law made Jeff Bezos richer than he, y'know, deserves to be. See Conan's comments, above. (Those who buy things through the internet should at least feel a tinge of guilt on tax day.)

It's not that the taxing authorities are righteous. Our elected servants are monstrous vipers, in all contexts, without exception.

Serious.

Anyway, I'm sorry Amy's losing a revenue stream, but 61T is my new favorite number... We should have seen this coming.

In the next decades, Americans (and all other cultures pretending to modernity) are going recover some blinding insights about the importance of being useful to each other... And weird games with taxation and mortgages and health care are not how it's done.

One more, offtopic.

If ad revenue is what you're looking for, open an account at Commission Junction. http://www.cj.com.

You can pick which products you want to advertise, and the commissions range between 10 and 15 percent.

I hope a similar scheme is available to you soon. Internet users seem to distrust both micropayments and tip jars, and Lord God knows they hate plain taxes... But so far as I can tell, no one was ever troubled by your use of Amazon for income. Even the ones who didn't explicitly understand how you got a cut of the action from their purchases seem to have gotten warm fuzzies from knowing that their Amazon oven mitts or golf shirts or candlewick trimmers were purchased through that redheaded advice lady's website. That's an interesting –and so far as I know, unremarked– metric of virtue, and one that all these "social media" idiots ought to be measuring with calipers and chemistry.

Irrelevant joke.

"California is who made you pawns in their battle with Amazon. You should blame your irrational elected officials rather than a company making the only rational business decision available to them."

I agree, it sucks, but the state is the one in the wrong here, and Amazon is doing the right thing fighting the state. It's bad enough California has one of the highest income tax rates, is one of the biggest economies in the world, and still manages to be bankrupt.

"Those who buy things through the internet should at least feel a tinge of guilt on tax day."

Oddly enough, I don't. I must be a deficient human being.

But yeah, Crid, I'm glad you're back. My summer was just starting to get a bit dull.

I agree, it sucks, but the state is the one in the wrong here, and Amazon is doing the right thing fighting the state. It's bad enough California has one of the highest income tax rates, is one of the biggest economies in the world, and still manages to be bankrupt.

Posted by: Lobster

To misquote/paraphrase an oft used quote on socailism given the way california if flaing about trying to get money from anything they can

The problem with canabalism is eventually you run out of other people

> I must be a deficient human being.

If you say so. Over the next few years, in every tier of your relationships to your government, you're going to hear thousands and thousands of fees & taxes proposed, schemes for removing value from your life and passing it to the authority of someone else. Most will fail and a few will fly, but it won't matter. You will start to take offense! And you'll speak up.

And on that day, this frothing mob of confiscatory busybodies will say reply to you with something like "Well, we TRIED the honor system, but you weren't up to it...."

In that moment, as your heart balloons with rage, don't come cryin' to me, OK? Contain your feelings.

"I'm back, bitches."

Dood. Where ya been?

Having sex with supermodels, mostly... Some starlets, too, but that's usually been just weekends.

I always thought this was a great little tune, but no one can say who wrote it. Any idea?