Comments on: New Internet Sales Tax Laws Causing Major Issues for US Merchants & Affiliates

By: Brian

Brian — Wed, 18 May 2011 16:40:44 +0000

I just now had my very first experience with this, and it pissed me off big time. I was 100% positive that what the company was doing was illegal. No doubts at all, it was 100%. Turns out, our laws, as usual, are totally screwed up!!!!

By: TM

TM — Tue, 19 Apr 2011 11:30:43 +0000

I think the idea of a sales tax on online sales is a deal killer. I used to do business with people who refused to pay sales tax in person. You think they will buy something online and pay the tax? No. As it is I can’t even get anybody to buy anything online so what difference does it make whether I collect it or not, as long as I pay it? I don’t charge sales tax but I report and pay it every year. It comes out of my pocket not theirs. I am not to blame for large corporations evading their obligations, they are. It’s not the tax that’s the problem, it’s the perception of shoppers that they are taxed enough already. I understand that, but if I don’t do something to make the tax man happy I lose, not the shoppers, and I can’t convince them to trust me enough to buy my products. I don’t have money to be throwing it around opening up a store somewhere because the economy is so depressed it would be like throwing myself in a deeper hole. I have been in business online for four years with nothing to show for it. Taxing me even more is not going solve the problem.

By: Bill

Bill — Fri, 12 Nov 2010 07:20:06 +0000

All this said, I’m personally not against large corporations having to pay sales taxes in the areas where they have a physical presence, whether the presence is an affiliate marketer or an actual office. Tax-free online sales have in many cases hurt local economies and these taxes would level the playing field. That said, I see how these taxes can prohibit new online businesses from even starting out, and this could damage to local economies as well.

By: pat

pat — Sun, 31 Oct 2010 06:20:35 +0000

Thanks for your post. I think the logic of having the tax owed to the customer’s home state, rather than the state where the seller is located, is that the sales tax revenue pays for the services (schools, roads, etc.) that the customer uses. This also extends to visiting tourists, who benefit from the infrastructure and other services provided by the state they are visiting.

By: steve@new houses for sale in post falls

steve@new houses for sale in post falls — Sat, 09 Oct 2010 03:38:33 +0000

The software to calculate sales tax nationwide is readily available and used by national chains for their online sales as well as by Amazon when it administers sales for Target. The federal legislation we support would exempt small online retailers (those with less than $5 million a year in sales), so would not impose an undue burden on small businesses. Larger companies can easily implement the software. One problem with having the tax paid to the company’s home state is that you would get a race to the bottom with each state trying to attract online retailers by lowering its sales tax. Another is that sales taxes are used to support services, like schools, that the customer uses.

By: Thomas DePaulo

Thomas DePaulo — Tue, 06 Jul 2010 20:58:27 +0000

I was just processing an order with Macmall to purchase a new computer, when they hit me with the news that I would have to pay tax, even though I was buying it from out of state (Colorado). I cancelled my order, to despite the $230 product incentive they were offering. I am hoping that we the people will draw the line in the sand and say, “ENOUGH IS ENOUGH! Stop taxing me to death!”

Dan, I couldn’t agree with you more! It gives me hope to think that there are others out there with common sense and true American ideals.

Thanks.

By: Kathy Pop

Kathy Pop — Thu, 06 May 2010 22:33:09 +0000

Sales tax??? We are NOT buying anything! Sales tax is charged when you purchase something. What are we purchasing??? Do the actual buyers pay a sales tax on the product as well?

Now, as a business, we are supposed to report our earnings as income, but we should not be paying a sales tax on top of that. I’m OK with the affiliate programs having us sign a 1099, so it can be reported as income ( I guess ) and then let the Affiliate be responsible for filing their own (income) taxes.

There’s my rant on the topic ^-^

By: Ashawndra

Ashawndra — Sun, 02 May 2010 06:29:49 +0000

I’m soon starting one of many website mainly focused on affiliate marketing as well as my own products online. I actually was entangled in this mess on the customer end (paying this sales tax) getting more information with digital products. I live in nc currently, but i agree this is a huge problem I don’t like it PERIOD!Guess Im moving out of state soon hope this does not spread across the nation =[

By: 3 Ways To Survive The Affiliate Tax Issue

3 Ways To Survive The Affiliate Tax Issue — Tue, 23 Mar 2010 11:48:45 +0000

[...] Affiliate Tax gained the nickname “Amazon Tax” due to their aggressive response to the issue. At the [...]

By: Lynn Terry

Lynn Terry — Thu, 22 Oct 2009 03:12:49 +0000

Good question, Dana – I’m not sure. I imagine the money wiring services are set up to handle this legally already, though.

By: tax inquiry

tax inquiry — Wed, 14 Oct 2009 15:37:06 +0000

Do you know what the laws are regarding state tax if a person purchases online but then PAYS in person at a third party WALK IN PAYMENT location? ie like a money wiring location? Nothing to do with an affiliate. Would the merchant be required to pay STATE tax in that scenario since payment is made in a physical location? some people without credit cards are making payments in physical locations for items purchased on the web-just wondering how tax might be affected in that case?

By: Stop ITFA

Stop ITFA — Wed, 30 Sep 2009 17:46:29 +0000

Stop kidding yourselves, big companies like eBay, Google, Amazon, Overstock, etc. are stuffing their pockets with dollars that belong to the state. Why should your local seller bear the burden to compete with a infastructure built by a few and used by all. These compaines that are not paying sales taxes are boosting about the “BILLIONS” of dollars worth of cash they are setting on. Stop crying and call your Congress and Senate and tell them to step up.

By: Rich Owings

Rich Owings — Sun, 19 Jul 2009 14:11:13 +0000

I’ve spoken with an attorney who specializes in Internet issues. He has reviewed NC’s pending legislation and we have discussed incorporating out of state and having a physical office out of state. But that isn’t enough — he believes nexus is based on where significant business activities take place. If the legislation passes, I’ll be talking to a sales & use tax specialist before implementing anything.

By: Rick Wilson

Rick Wilson — Sun, 19 Jul 2009 02:22:10 +0000

Hi Lynn,

It’s good to see this discussion continuing here. It needs to stay on affiliate marketer’s minds til this is resolved one way or the other.

Been reading the posts by Jerry West & Mike Young on their respective blogs about all this. Been running them by my atty earlier this evening along with Jerry’s “solution” post.

For me, my “legal counsel” says that Jerry’s solution, while probably very workable for him with HIS own circumstances, is not something he would recommend for me. It seems a bit more complicated than it needs to be for most people including me.

It seems that I might have a couple options to think about, though. But definitely have to form the company in another state and have related functions like banking, mail, phone in that state too. Even a company payPal account too! LOL

RI is such a non business-friendly state. So my whole online business entity will eventually be in that “other” state as almost all my online income is from affiliate marketing & my day trading. My biz entity is actually pretty simple for tax purposes. ALL Form 1099s. heh heh

It’s definitely gonna get ALOT more interesting when I finally get this set up. NOW … IF only I can just get my “legal eagle” back from jetsetting around Asia with his wife, then I can get this deal started! LOL

Have Fun All!

Rick Wilson aka CorpRebel

P.S. Remember … You really need to get legal advice from your own attys & accountants so you can figure out what’s best for YOUR business!

By: Rick Wilson

Rick Wilson — Sun, 19 Jul 2009 00:34:59 +0000

Hi Nan,

Did that “NC associate” say that because it’s just his opinion OR did they actually talk to their atty or tax accountant and get a “legal” opinion?

While Jerry West’s solution probably will work for “his” particular biz setup, most likely isn’t a solution for most people with this issue.

Remember … there IS a big difference between “tax evasion (tax fraud)” (for taxes owed) and “tax avoidance” (properly done is perfectly legal).

IF a company doesn’t like a state’s tax rate they’re certainly within their rights to move to another state with lower taxes which is “tax avoidance”. Nothing wrong with that.

ONE thing people need to understand …

There is NO single “cookie cutter” solution that will work for eveyone. Everyone’s setup is a bit different. That’s why everyone should discuss this with their own atty and accountant and THEN make a decision which way they need to go.

And when I say attorney, I mean an attorney that is actually qualified at dealing with these issues. Usually your divorce lawyer or general lawyer are probably not who you need to talk to. heh heh

And yeah, I know … This whole issue “bites” but we need to deal with it. It’s NOT going away. :-/

Rick Wilson