Online Retailers have to pay tax?
Tip:Amazon.com Inc. and other e-commerce companies are winning some skirmishes against cash-strapped states that want to force them to collect sales taxes, but their victories may be short-lived.
Q:Can you tell us more about the news?
A:Several states are contemplating new laws or revisions to existing law that could eventually force online retailers to pony up. North Carolina, for instance, has a two-pronged approach to going after online retailers. If its current efforts to tax online sales fall through, the state’s revenue secretary plans to interpret existing laws to require companies that have marketing affiliates collect sales taxes.
State Sen. David Hoyle on Thursday called the effort “a fairness issue.” Collecting sales taxes from out-of-state sellers could bring between $150 million and $200 million annually in additional tax revenue, he said. Mr. Hoyle said current law allows the state to force online retailers retroactive sales taxes.
Q:what are the opinions of E-commerce companies ?
A:E-commerce companies said they continue to believe they are not required to collect such taxes. “We don’t want to shoulder the unconstitutional burden of collection in states where we lack a physical presence,” said Patty Smith, a spokeswoman for Seattle-based Amazon. She said the company is “in compliance with all Texas laws governing sales tax collections. Overstock.com Inc. President Jonathan Johnson said the new efforts will be unsuccessful. “The state legislatures don’t have the ability to change what the Supreme Court has said,” he said. “We will sue any state that tries to unconstitutionally attack our business,” Mr. Johnson added.
Q:Does these companies have any measures to express their oppsition?
A:To avoid getting caught by the new laws, Amazon, Overstock, Blue Nile Inc. and others dropped or threatened to drop affiliates in some states.
In response, some states backed down on their plans. On Wednesday, Hawaii governor Linda Lingle vetoed her state’s e-commerce tax bill, saying it would have negative consequences for local businesses. Gov. Arnold Schwarzenegger of California, which has contemplated similar legislation, also promised Wednesday that he would veto any such proposals.
There are about 200,000 affiliate marketers in the U.S., tied to about $14 billion in annual revenue either directly or through supporting businesses, according to trade group Performance Marketing Alliance. Affiliates range from large coupon-collecting Web sites to people such as 56-year-old Lydia Walshin in Glocester, Rhode Island, who runs a cooking blog called the Perfect Pantry. Ms. Walshin’s site includes links to cookbooks sold on Amazon and other sites, for which she gets a sales commission of as much as $1,000 per year.
“Those pennies really add up as an overall strategy to monetize my blog,” said Ms. Walshin. Now that Amazon has ended its business with her, she said she’s looking for other revenue streams.
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