Friday, March 11, 2011

Califorina Internet Tax Threatens Associates

The California state legislature is threatening the livelihoods of over 10,000 Californians who earn money as Amazon Associates for online retailer,

These Californians place links on their websites to Amazon. When someone clicks through to Amazon and makes a purchase, the Associate earns a commission.

Amazon is not required to collect sales taxes on purchases made to Californians because there is no "business nexus." But now California is considering a law to classify Amazon Associates as a "business nexus".

Other states have done likewise. In all such instances, Amazon ended its Associates program rather than be forced to collect the sales tax. Amazon has even ended its Associates program in big states such as New York and Illinois.

History shows Amazon is not bluffing. If California declares Amazon Associates a “business nexus,” Amazon will end its Associates program in the state.

This will hurt over 10,000 Californians' earnings -- and will lower California's income tax revenue.

This loss in state revenue will not be made up in sales taxes, because by ending the Associates program, Amazon will once more not be required to collect sales taxes.

"Bricks and mortar" retailers complain that Amazon has an "unfair advantage" because online buyers don't pay sales taxes. But they ignore that: 1. their buyers don't pay for shipping, and 2. this legislation will NOT compel Amazon to collect sales taxes -- it will only hurt 10,000 Californians trying to earn money and thus further hurt the state's revenue.

Californians, please contact your state senate and assembly representatives and tell them to oppose any attempt to force Amazon to collect sales taxes, or to declare Amazon's Associates a "business nexus."

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