Regardless of which side of the debate you're on, one thing is clear: Jeff Bezos and Amazon are fighting with everything they've got to keep states from imposing sales taxes on affiliate sales.
In March, we reported the cutoff notices sent by Amazon to many affiliates in certain states. The fight continues and Bezos is going on the offensive, appealing to Washington to step in and protect them.
"We will continue to drop states who pass those affiliate laws, from the affiliate program," CEO Jeff Bezos said at the ShopSmart Summit in New York in May.
"In the U.S., the Constitution prohibits states from interfering in interstate commerce, and there was a Supreme Court case decades ago that clarified that mail-order companies, because the Internet didn't exist then, would not be required to collect sales tax in states where they didn't have what's called a nexus."
In a recent poll by TheStreet that included 1400 respondents, 66% believed that Amazon affiliates should be exempt from state sales tax. The basis of a 1992 Supreme Court ruling that allows businesses that do not have a physical location within the state to be exempt from paying their sales tax. It was intended at the time for mail-order companies but has been applied to companies like Amazon and Overstock due to the similarities between mail-order and online purchases.
Disclaimer
This article is for informational purposes only and does not constitute financial, investment, tax, or legal advice. Market data, tax rules, and prices can change after the article date. TECHi and its authors may hold positions in securities or digital assets mentioned. Always conduct your own research and consult a licensed financial, tax, or legal professional before making decisions.
About the Author
Connor Livingston is a tech blogger who will be launching his own site soon, Lythyum. He lives in Oceanside, California, and has never surfed in his life.
