Amazon to stop paying Minnesota bloggers for sales traffic

[question everything]

Source: StarTribune

Amazon and other e-commerce firms are cutting ties with all Minnesotans who earn money by posting links that send traffic to online merchants after lawmakers passed a tweak to state sales tax law.

Minnesota E-Fairness legislation, signed by Gov. Mark Dayton on May 23 and going into effect July 1, classifies independent bloggers and online reviewers as a physical presence of a business in the state. This means online companies who pay these people to generate new sales must collect tax not just on those sales, but on all sales in the state.

The tax on online sales is already due, but the onus has been on consumers, who often never pay the tax. The new law puts the onus on Amazon, as long as they have a single blogger posting links to its products from Minnesota.

The state has estimated the new law will generate $5 million in new revenue, but Amazon is having none of it. The company sent an email to associates in Minnesota, saying it will close all accounts in the state to avoid the tax.



Read more: http://www.startribune.com/blogs/212014151.html

[onehandle]

1. Amazon is the Wal-Mart of online sales. nt

[question everything]

4. I know. When I purchase a book, the paper kind,

I go to the Barnes & Nobles website. For as long as it can stay in business.

Spouse has a Kindle so it is Amazon there..

[jtuck004]

5. Actually they have done a lot to break the grip of thieving book publishers.

They certainly have their bad practices, but that business model has done a lot to open up book purchases (and a lot of other things - think of the people who have access to cloud servers who would otherwise have to knuckle under to Microsoft) to a lot of people who never would have been able to get them otherwise.'

Who else is going to? Libraries can't do it. The big 6 publishers have locked libraries out of the purchases of the most wanted digital books, essentially told them to get lost. Amazon, on the other hand, has the clout to not have to knuckle under to them.

I know there are two sides, but I am glad they are there. And I think until the state requires bloggers to buy a business license and pay a tax for it, instead of just passing a law that will cost everyone else more money that that Amazon made exactly the right decision.

[Kolesar]

8. The big 6 publishers have locked libraries out

Wow. I didn't know that . thanks

[pam4water]

2. Tries to think of some way for the blogger to sue but nothing comes to mind.

[Travis_0004]

3. Does this really suprise anybody.

They did the same thing to Illinois a while ago, and probably a few other states along the way.

I'm not against a national sales tax, but we need a better way to implement it.

As of right now, there are close to 10,000 sales tax jurisdictions. Its simply too complicated, and too much to keep track of.

What they need to do is set a flat tax on internet purchases. Then its collected, and sent to the federal government, and the federal government should be required to split it evenly between the states based on population. A business could handle writing one check quarterly. Most business don't want to keep track of the tax rates in 10,000 jurisdictions, and write several
hundred checks.

[fasttense]

7. This tax thing is soooo messed up

As a small business, I can't figure out 10,000 sales restrictions and rules. You have to have an on-line tax accountant to sell anything. It's just another way to keep the little guy out of the market.

Just like off-shore money havens are only done by the uber rich and corporate giants so too will sales on line soon turn into.

[Hassin Bin Sober]

12. Are you telling me there isn't a computer program that calculates the tax based on address/zip?

Home Depot, Sears and everyone else I buy from manages to calculate tax correctly at time of purchase.

I'm sure the money is posted in an account and designated for disbursal at the pre-determined time via wire transfer (who writes checks anymore). It's not rocket science.

I don't like your flat tax idea because I have the feeling it will be IN ADDITION to other state taxes.

I can't see big states like Illinois or big cities like Chicago (where I live) sharing THEIR tax revenue with everyone else even if it IS based on population. Illinois and the big blue states already subsidize the backwards ass regressive red states and rural areas.

[Travis_0004]

13. Home depot and sears need to know 1 tax rate.

They charge 1 sales tax rate, based on where they are located. They write one check for the tax to the state, and maybe 1 check to the county if they have a separate rate.

Online businesses would have to keep track of 10,000 different tax rates. Since it would be based on where the buyer is located, (with brick and mortar, its based on where the seller is located).

What I proposed would certainly cause some states to get more tax revenue then your way, but there would be no way to know which states are winners, and which are losers. Every state gets more revenue than they have now, and its easy enough for business to follow,

[Hassin Bin Sober]

14. The on-line transactions are not processed of fulfilled locally from the local stores.

So, yes, they do have to track, collect and pay taxes in all jurisdictions.

[DallasNE]

6. Minnesota Closes A Tax Loophole And Amazon Throws A Fit

It's hard to understand Amazon's logic here because if they cut off paying people that send business their way then those people will stop sending business Amazon's way. Now how much sense does that make. Other companies face the same issue so the playing field remains level. Yes, big box stores that already pay the sales tax will finally be on equal footing with Amazon so they could lose some sales but only if their prices before the sales tax is higher. It is hard to see how Amazon has thought this through very well as it looks to me like they are cutting off their nose to spite their face.

[Travis_0004]

9. Not quite

Amazon gets lots of sales because they are the often the cheapest. If they charge sales tax, and their other online competitors don't charge sales tax, then amazon will possibly loose even more sales, then if they just cut off some affiliates.

This is why the piecemeal approach doesn't work, and they need a solution on a national level.

[SnowCritter]

10. But it's not just Amazon that's being affected

All e-commerce is affected. Amazon's online competitors are subject to the same laws and rules, so they'll be taxed as well.

[christx30]

11. And this is Amazon's

Response. Other companies will make up their own minds about how they are going to handle it. Either pay the tax or find another loophole.