Amazon Threatens Cuts Over State Taxes

Hey, Illinois legislators, don’t do this, ok?

Darth Vader

Cash-strapped states trying to force retailers to collect taxes on online sales are spurring efforts by Internet retailer Inc. to avoid being swept under the proposed laws.

North Carolina is close to passing a law that would force online retailers to collect the state’s 4.5% sales tax from marketing affiliates, people who get a sales commission from online customer referrals. Amazon, of Seattle, Wash., told its North Carolina marketing affiliates on Wednesday that it would stop doing business with them by July 1 if the law takes effect. Cutting the affiliates would enable Amazon to avoid collecting tax on sales in the state.

“We believe the way North Carolina is going about collecting the sales tax is unconstitutional,” said Amazon spokeswoman Patty Smith. “It isn’t appropriate for us to have to comply with an unconstitutional burden.”

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I don’t make much money on Amazon affiliate linkages, but I make enough to pay for my hosting fees, and would be quite saddened if that revenue stream dried up. North Carolina ought to stop subsidizing tobacco farmers if they are so concerned with their budget.

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