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Tax on Internet sales !!!!!!!!!!!!!!1

m88.358winm88.358win Member Posts: 7,272 ✭✭✭
edited July 2011 in General Discussion
Gov. Jerry Brown has signed into law California's tax on Internet sales through affiliate advertising which will immediately cut small-business website revenue 20% to 30%, experts say.

The bill, AB 28X, takes effect immediately. The state Board of Equalization says the tax will raise $200 million a year, but critics claim it will raise nothing because online retailers will end their affiliate programs rather than collect the tax.

Amazon has already emailed its termination of its affiliate advertising program with 25,000 websites. The letter says, in part:

(The bill) specifically imposes the collection of taxes from consumers on sales by online retailers - including but not limited to those referred by California-based marketing affiliates like you - even if those retailers have no physical presence in the state.

We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.

The new law won't affect customers, Amazon said, but added that the immediate termination of the affiliate program also applies to endless.com, myhabit.com and smallparts.com.

(Full disclosure: I have a personal website that has been an Amazon affiliate. It made $2 last quarter. That is not 30% of my income.)

Almost all the California Amazon affiliates have fewer than 75 employees and a large percentage have no employees, according to Rebecca Madigan executive director of the Performance Marketing Association, a Camarillo-based nationwide trade association.

"This law won't impact Amazon that much but it is a crisis for website owners who make revenue by placing ads on their websites for thousands of online retailers," Madigan said. "Most of them don't have a physical presence in California."

California Retailers Association stated: "We thank Governor Jerry Brown and the leaders in the California State Legislature who have demonstrated their leadership and commitment to California businesses by passing and signing e-fairness into law. Small and large businesses across the state have been held at a major disadvantage by the current law that out-of-state online companies like Amazon.com and Overstock.com have exploited for years. This has cost us jobs and revenues."

http://www.ocregister.com/articles/amazon-306409-affiliate-california.html

25,000 companies. So long delivery drivers, order takers, packers, school book prices, employers, and the thousands of jobs. Thank GOD California has unemployment! Love it. Hope it's worth the tax it will collect. Dumb a_ _.

Comments

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    thunderboltthunderbolt Member Posts: 6,038 ✭✭✭
    edited November -1
    Can Cali force out of state FFLs to collect this tax? Interesting!
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    calrugerfancalrugerfan Member Posts: 18,209
    edited November -1
    quote:Originally posted by thunderbolt
    Can Cali force out of state FFLs to collect this tax? Interesting!


    I'm not exactly sure what this law does, but I can guarantee you that it won't solve any problems or create huge revenue like they say.
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    nutfinnnutfinn Member Posts: 12,808 ✭✭✭
    edited November -1
    Typical Kalifornia stuff [:D] That state is doomed
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    calrugerfancalrugerfan Member Posts: 18,209
    edited November -1
    quote:Originally posted by pogybate
    Gov. Brown got elected with a big help from the Cal. teachers union. He just paid them back big time with a lucrative contract that stipulates no teacher layoffs and generous raises. Guess hes counting on those internet revenues.


    Do you have a link to this?
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    andrewsw16andrewsw16 Member Posts: 10,728 ✭✭✭
    edited November -1
    If you choose not to be a slave to California, just be sure not to travel there. I really doubt they would go to the expense of filing charges against an out of state seller and then trying to extradite you back to CA. They would have to foot the bill for all of the administrative expenses, travel, etc. and they don't have the money. But if you were there and got pulled over for a taillight, the warrant would show up and you might get hauled in. [}:)]
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    LaidbackDanLaidbackDan Member Posts: 13,143 ✭✭✭
    edited November -1
    I heard a rumor that California was considering copywriting "California" and anytime the name is used in any context including casual conversation. A newly formed agency would send undercover revenue agents nationwide to vigorously demand royalties whenever the word is used.
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    River RatRiver Rat Member Posts: 9,022
    edited November -1
    Dan: does that include saying "F__in' California?"
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    Mr. PerfectMr. Perfect Member, Moderator Posts: 66,317 ******
    edited November -1
    golly, it's almost as if... as if... as if they WANT the state economy to fail.[:0][:o)]
    Some will die in hot pursuit
    And fiery auto crashes
    Some will die in hot pursuit
    While sifting through my ashes
    Some will fall in love with life
    And drink it from a fountain
    That is pouring like an avalanche
    Coming down the mountain
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    gruntledgruntled Member Posts: 8,218 ✭✭
    edited November -1
    They already have a law that says we must pay Use Tax on internet purchases. We are supposed to pay the Use Tax when we file our Income Tax form. I'm sure everyone does that[:D].
    The receiving FFLs in Kalifornia are already required to collect the Sales Tax. The odd part there is that when I sent an E-Mail to the
    Franchise Tax Board asking that question they sent me a reply saying, No but that I did have to pay the Use Tax.
    I do wonder if the Use Tax may be lower than the Sales Tax since many local areas have higher Sales Taxes than the State tax.
    It would be a MAJOR hassle for sellers in they had to collect & pay all the local tax agencies.
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    calrugerfancalrugerfan Member Posts: 18,209
    edited November -1
    quote:Originally posted by gruntled
    They already have a law that says we must pay Use Tax on internet purchases. We are supposed to pay the Use Tax when we file our Income Tax form. I'm sure everyone does that[:D].
    The receiving FFLs in Kalifornia are already required to collect the Sales Tax. The odd part there is that when I sent an E-Mail to the
    Franchise Tax Board asking that question they sent me a reply saying, No but that I did have to pay the Use Tax.
    I do wonder if the Use Tax may be lower than the Sales Tax since many local areas have higher Sales Taxes than the State tax.
    It would be a MAJOR hassle for sellers in they had to collect & pay all the local tax agencies.


    I didn't have to pay tax when I bought guns on GB.
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    mark christianmark christian Forums Admins, Member, Moderator Posts: 24,456 ******
    edited November -1
    Since it is a tax issue naturally it is nothing like cut and dry! In reality the tax on Internet sales only applies to those retailers outside the state who have made more than $10,000 per month in sales to CA and made sales in CA in excess of $500,000 during the previous year:

    (5) (A) Any retailer entering into an agreement or agreements
    under which a person or persons in this state, for a commission or
    other consideration, directly or indirectly refer potential purchasers
    of tangible personal property to the retailer, whether by an
    Internet-based link or an Internet Web site, or otherwise, provided
    that both of the following conditions are met:
    (i) The total cumulative sales price from all of the retailer's
    sales, within the preceding 12 months, of tangible personal property
    to purchasers in this state that are referred pursuant to all of those
    agreements with a person or persons in this state, is in excess of
    ten thousand dollars ($10,000).
    (ii) The retailer, within the preceding 12 months, has total
    cumulative sales of tangible personal property to purchasers in
    this state in excess of five hundred thousand dollars ($500,000).


    I doubt that this is going to make much of a differnce to most small sellers here in CA, even if the law is upheld.

    You can read the entire bill here if you wish to do so:

    http://www.leginfo.ca.gov/pub/11-12/bill/asm/ab_0001-0050/abx1_28_bill_20110628_enrolled.pdf
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    armilitearmilite Member Posts: 35,483 ✭✭✭
    edited November -1
    Just another good reason for Kalifornia to fall in the Pacific Ocean, sorry Mark.
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    mark christianmark christian Forums Admins, Member, Moderator Posts: 24,456 ******
    edited November -1
    http://www.latimes.com/business/la-fi-amazon-tax-20110630,0,4344787.story

    California is the seventh and largest state in the country to pass a law to collect taxes on out-of-state Internet sales. Illinois, Arkansas and Connecticut acted earlier this year, North Carolina and Rhode Island in 2009 and New York in 2008. Amazon sued to overturn the New York law and lost in the lower courts. The company is paying sales taxes into an escrow account pending an appeal.

    Have Gun Broker sellers been collecting sales taxes on the other six states? I honestly do not know but as usual, no state but CA draws any attention on the boards.
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    PanzerSlayer2PanzerSlayer2 Member Posts: 1,798 ✭✭✭✭✭
    edited November -1
    If here in MI I save 6% I'm more than likely to spend it in MI. That 6% would multiply to generate more that 6% lost in the original tax
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    andrewsw16andrewsw16 Member Posts: 10,728 ✭✭✭
    edited November -1
    The U.S. Supreme Court in 1992 ruled that states cannot tax businesses that aren't physically within their boundaries. Such taxes would regulate interstate commerce, which is a federal government prerogative. The new law gets by this by including any out of state merchant that has at least one affiliate inside California. Guess what? Amazon just issued a statement saying they are terminating all affiliate contracts in California, effective immediately and therefore will NOT be collecting the tax. [:D] So, looks like CA is just going to be flushing a bunch of jobs to new out of state locations. [:p]
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    Hunter MagHunter Mag Member Posts: 6,611 ✭✭✭
    edited November -1
    quote:Originally posted by andrewsw16
    The U.S. Supreme Court in 1992 ruled that states cannot tax businesses that aren't physically within their boundaries. Such taxes would regulate interstate commerce, which is a federal government prerogative. The new law gets by this by including any out of state merchant that has at least one affiliate inside California. Guess what? Amazon just issued a statement saying they are terminating all affiliate contracts in California, effective immediately and therefore will NOT be collecting the tax. [:D] So, looks like CA is just going to be flushing a bunch of jobs to new out of state locations. [:p]



    If that is the case then those layed off will be collecting unemployment to boot, compounding the problem.
    Isn't it ironic how the government creates problems and doesn't solve/prevent them. [xx(]
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    calrugerfancalrugerfan Member Posts: 18,209
    edited November -1
    quote:Originally posted by Hunter Mag
    quote:Originally posted by andrewsw16
    The U.S. Supreme Court in 1992 ruled that states cannot tax businesses that aren't physically within their boundaries. Such taxes would regulate interstate commerce, which is a federal government prerogative. The new law gets by this by including any out of state merchant that has at least one affiliate inside California. Guess what? Amazon just issued a statement saying they are terminating all affiliate contracts in California, effective immediately and therefore will NOT be collecting the tax. [:D] So, looks like CA is just going to be flushing a bunch of jobs to new out of state locations. [:p]



    If that is the case then those layed off will be collecting unemployment to boot, compounding the problem.
    Isn't it ironic how the government creates problems and doesn't solve/prevent them. [xx(]


    The way that I understand it, these are not "Amazon employees" working "for" Amazon but rather California based websites that put Amazon ads on their site to generate income.

    If I'm correct, then there will be no increase in unemployment.
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    WulfmannWulfmann Member Posts: 4,894 ✭✭✭
    edited November -1
    Ya can't fix stupid! [:o)]

    Wulfmann
    3YUCmbB.jpg
    "Fools learn from their own mistakes. I learn from the mistakes of others"
    Otto von Bismarck
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    calrugerfancalrugerfan Member Posts: 18,209
    edited November -1
    quote:Originally posted by Wulfmann
    Ya can't fix stupid! [:o)]

    Wulfmann


    We're not talking about FIXING it, just TAXING it. [:D]
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    andrewsw16andrewsw16 Member Posts: 10,728 ✭✭✭
    edited November -1
    quote:Originally posted by calrugerfan
    quote:Originally posted by Hunter Mag
    quote:Originally posted by andrewsw16
    The U.S. Supreme Court in 1992 ruled that states cannot tax businesses that aren't physically within their boundaries. Such taxes would regulate interstate commerce, which is a federal government prerogative. The new law gets by this by including any out of state merchant that has at least one affiliate inside California. Guess what? Amazon just issued a statement saying they are terminating all affiliate contracts in California, effective immediately and therefore will NOT be collecting the tax. [:D] So, looks like CA is just going to be flushing a bunch of jobs to new out of state locations. [:p]



    If that is the case then those layed off will be collecting unemployment to boot, compounding the problem.
    Isn't it ironic how the government creates problems and doesn't solve/prevent them. [xx(]


    The way that I understand it, these are not "Amazon employees" working "for" Amazon but rather California based websites that put Amazon ads on their site to generate income.

    If I'm correct, then there will be no increase in unemployment.

    True for some. The sites make revenue from the pass thru. Some don't make much and won't be affected much. Other site owners interviewed said they made a significant percentage of their revenue off of Amazon. In addition to those web sites, Amazon does have some physical manufacturing sites in CA that will either lose their contract or move. In the end, I doubt CA will collect hardly a cent.
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    wittynbearwittynbear Member Posts: 4,518
    edited November -1
    Amazon, overstock and other online retailers will just do what most on gunbroker do, refuse to sell to CA. It really won't hurt their business much but it will kill CA jobs.
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    Hunter MagHunter Mag Member Posts: 6,611 ✭✭✭
    edited November -1
    Hellinois just passes a similar bill taxing out of state purchases even if the person/company doesn't have a location in Hellinois.
    Not sure how they're going to exforce/collect on it though.
    Time will tell...
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    andrewsw16andrewsw16 Member Posts: 10,728 ✭✭✭
    edited November -1
    They won't do that. CA is too big of a customer. All they have to do is ensure none of their facilities or affiliates is physically in the state. They'll still sell to them and deliver into the state. Problem solved. [:D]
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    andrewsw16andrewsw16 Member Posts: 10,728 ✭✭✭
    edited November -1
    quote:Originally posted by Hunter Mag
    Hellinois just passes a similar bill taxing out of state purchases even if the person/company doesn't have a location in Hellinois.
    Not sure how they're going to exforce/collect on it though.
    Time will tell...


    Unless there some other details not released, this won't stand a court challenge based on the previous SCOTUS ruling.
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    calrugerfancalrugerfan Member Posts: 18,209
    edited November -1
    quote:Originally posted by wittynbear
    Amazon, overstock and other online retailers will just do what most on gunbroker do, refuse to sell to CA. It really won't hurt their business much but it will kill CA jobs.


    In reading the info that Mark posted, it seems like it doesn't actually require taxes be collected on items being sold to California via the internet, but rather on money paid to California companies by out of state companies for posting links to out of state companies.

    Of course, it's so messed up and backwards that who knows what it really does?
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    Hunter MagHunter Mag Member Posts: 6,611 ✭✭✭
    edited November -1
    quote:Originally posted by andrewsw16
    quote:Originally posted by Hunter Mag
    Hellinois just passes a similar bill taxing out of state purchases even if the person/company doesn't have a location in Hellinois.
    Not sure how they're going to exforce/collect on it though.
    Time will tell...


    Unless there some other details not released, this won't stand a court challenge based on the previous SCOTUS ruling.

    But in the mean time it's still law much like Chitcagos handgun ban that was finally struck down 28 years after it was enacted. Makes me wonder if all those arrested during that time had their records wiped clean? Yeah right. [xx(]
    Hellinois/Chitcago are infamous for blatantly circumventing the constitution/supreme court rulings. But that's no secret. [B)]
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    mark christianmark christian Forums Admins, Member, Moderator Posts: 24,456 ******
    edited November -1
    quote:Originally posted by calrugerfan
    quote:Originally posted by wittynbear
    Amazon, overstock and other online retailers will just do what most on gunbroker do, refuse to sell to CA. It really won't hurt their business much but it will kill CA jobs.


    In reading the info that Mark posted, it seems like it doesn't actually require taxes be collected on items being sold to California via the Internet, but rather on money paid to California companies by out of state companies for posting links to out of state companies.

    Of course, it's so messed up and backwards that who knows what it really does?



    I read it a third time I am beginning to see it the same way as you. It is confusing because they really can't do exactly what they want to do based on the previous Supreme Court ruling that others ahve already mentioned. I hold a valid resale license and state sales tax number but this is all so new that the State Board of Equalization (the sales tax agency here in CA) does not have any information available because they have not made the regulations to fit the new law! It will got to court, that is for sure and if it stands up watch for a dozens of states adding new Internet sales taxes.
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    grumpygygrumpygy Member Posts: 53,466
    edited November -1
    May want to verify this as I also heard that the date has been delayed.
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    gruntledgruntled Member Posts: 8,218 ✭✭
    edited November -1
    quote:Originally posted by mark christian
    I hold a valid resale license and state sales tax number but this is all so new that the State Board of Equalization (the sales tax agency here in CA) does not have any information available because they have not made the regulations to fit the new law! It will got to court, that is for sure and if it stands up watch for a dozens of states adding new Internet sales taxes.


    That may explain why I got the answer I did. I sent my question to the Franchise Tax Board. They replied the dealers should not collect the Sales Tax & that I should pay the Use Tax with my Income Tax.
    Two different agencies, two different answers.
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    Alan RushingAlan Rushing Member Posts: 9,002 ✭✭
    edited November -1
    m88.358win

    Thanks for posting this information.

    It is going to be interesting to see how this all washes.

    Coubt that it will ever playout to be the bood to the State of CA.'s economic picture.

    It could bite the State big time again. I understand that they had started the practice of taxing folks at the end of the year against goods that were in stock, in warehouses.

    Corportations, Companies and many individuals relocated warehouses and many of the small business ... lock, stock and barrel to the Great State of Nevada to end-run CA. on the taxes. Needless to say, the State of CA. screwed itself! [:0] [:(] [8] [:(] [:0]
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    GrasshopperGrasshopper Member Posts: 16,751 ✭✭✭✭
    edited November -1
    Illinois is going to do the same thing,,,,knew it long ago..Every state will have it soon,,wait and see.
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    andrewsw16andrewsw16 Member Posts: 10,728 ✭✭✭
    edited November -1
    Then Amazon and others like it will relocate their servers to offshore hosts and keep their central warehouses in places with low or no sales taxes. It's all a game of one upmanship.
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    gruntledgruntled Member Posts: 8,218 ✭✭
    edited November -1
    quote:Originally posted by Alan Rushing

    m88.358win

    Thanks for posting this information.

    It is going to be interesting to see how this all washes.

    Coubt that it will ever playout to be the bood to the State of CA.'s economic picture.

    It could bite the State big time again. I understand that they had started the practice of taxing folks at the end of the year against goods that were in stock, in warehouses.

    Corportations, Companies and many individuals relocated warehouses and many of the small business ... lock, stock and barrel to the Great State of Nevada to end-run CA. on the taxes. Needless to say, the State of CA. screwed itself! [:0] [:(] [8] [:(] [:0]


    Don't most states have inventory taxes?
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