Runs with scissors discussion

California recently passed a law requiring internet based companies to collect sales tax on all orders. Amazon has balked at this calling the law "unconstitutional" and has threatened affiliates that benefit from Amazon in C.A. that they will be cut off if C.A. does not back down. The internet juggernaut has made claims that jobs will suffer and other outrageous things just to provoke the public into not passing the law.

Well, this week Amazon "fired" over 10,000 affiliates over this new law, and several other internet companies followed suit in protest. One of the affected parties was a military museum (a non-profit) that benefited from the Amazon deal, losing about $2,000 of their budget which was used for books for their education program. It was said that AIG was "too big to fail" and that is why they were worthy of a bail out from the government. (That worked out so well!) Is Amazon too big to follow the law? Yes, it is a good place to find a deal on a new or used book if you have no where else to go and it is the convenient excuse used by brick and mortar book stores for why they aren't doing well. But should it be exempt from the law just because collecting taxes may eat up a small portion of the profits?

If I go to a store I have to pay sales tax on any items that are not food in the state of Ohio. Technically you are supposed to report any catalog or web purchases that do not charge tax on your income tax form for the state. (I don't think many do...) So why is the idea of charging tax on the internet such a big deal? I know many will argue that is WHY they shop the net, because with no tax things are cheaper and we are all paying too much as it is, blah, blah, blah.

But what gives a company the right to scoff at a LAW and punish people who have nothing to do with it?

I for one think this kind of behavior is not good business.

I would like to add to this by pointing out other e-commerce sites like Overstock.com have also decided to punish affiliates by "firing" them as well. 25,00 non-profits, individuals, and businesses are being affected by this move. They place links on the web sites of retailers, and when customers "click through" to purchase, the retailer gets a percentage. Amazon is stating a 1992 Supreme court ruling that says states may only collect tax if a company has "a physical presence" in the state.

It is being argued by the state of California that the affiliates constitute said physical presence. To me,doesn't the fact that Amazon only exists on the internet cause it to have a physical presence on your computer? Therefore they should collect tax.
This is only the beginning, and I wonder where it will end.

Ohio is now trying to force internet retailers to collect tax from sales. As of now, you the taxpayer are responsible for keeping track of all internet purchases and reporting it on your income tax. A reporter for the Plain Dealer took high exception to this idea over the weekend and called it "virtual access to your wallet". I fail to the see the problem. You buy things in a store, you pay tax. I order from a catalog, I pay state taxes to my state and the taxes to the state I'm ordering from depending on the company, so why should this be any different?

No word on what Amazon thinks about this so far, but I am sure that their usual fit will be following soon.