March 2, 2011

Amazon takes its anti-tax rampage to California

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Add California to the growing list of states Amazon won’t talk to anymore. As a Wall Street Journal report details, “Ramping up its battle against Internet sales taxes, Amazon.com Inc. has warned it will sever ties with thousands of California-based advertising affiliates if the state government passes legislation requiring the e-commerce giant to collect taxes on items sold to residents.”

The paper says Amazon’s department of “Global Public Policy” wrote a letter to the state’s Board of Equalization — which oversees tax collection — declaring that “our bills introduced to the state legislature are unconstitutional because they would ultimately require sellers with no physical presence in California to collect sales tax merely on the basis of contracts with California advertisers.” Amazon v.p. Paul Misener wrote that should the state legislature pass the laws “Amazon would be compelled to end its advertising relationships with well over 10,000 California-based participants in the Amazon ‘Associates Program’.”

Equalization member Senator George Runner says he’d heard from Amazon, too.  “In no uncertain terms, Amazon has made it clear to me that the checks they send Californians will be cut off overnight if pending legislation aimed at regulating their operations becomes law,” he says.

Amazon has already shut down affiliate programs and warehouses in North Carolina, Rhode Island, Texas and Colorado, rather than pay sales taxes like brick and mortar stores, while it is appealing a ruling in New York that said it must pay taxes there, and has recently “also said it will cut ties with Illinois-based affiliates if the state governor signs recently passed legislation into law.”

Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House.

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