Comment

Tim Pawlenty, Climate Change Denier (and Creationist)

148
lawhawk6/29/2011 12:49:08 pm PDT

re: #143 Charles

Welcome to the wonderful world of sales tax nexus. This all flows from the Supreme Court decision in 1983 - Quill v. North Dakota. Economic presence wasn’t sufficient; one needs a physical presence - and if you’ve got affiliates all throughout the states, that would expose these companies to sales tax collection liabilities.

In their need to get revenues, states have fixated on sales tax revenues on Internet transactions, all while ignoring that they could achieve the same kind of result (higher revenues) by better indicating and enforcing use tax collection - and they wont keep getting slapped down by courts for violating Quill (the Colorado attempt has been temporarily enjoined for example and other states are also in a holding pattern).

To further avoid the problem, Amazon and others are simply killing their affiliate programs so as to avoid the appearance of having sufficient nexus with the state under those state laws.

It’s a huge mess, and there are billions of dollars at stake for the states, and it’s a big problem for the affiliates who were making money through the program.