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United States Senate is expected to approve S. 743: Marketplace Fairness Act of 2013, also known as Online Sales Tax Bill.
According to Reuters:
The bill gains support from Internet retail giant Amazon.com and opposition from eBay.com.
Currently Amazon.com collects sales tax in the following nine States:
The day has finally come as Amazon.com starts collecting California Sales Tax, effective September 15th, 2012. Amazon and California signed the deal back in September 2011. Amazon now can offer 1-day and same day shipping by placing distribution centers in California.
As long as Amazon offers competitive pricing in addition to fast delivery, California residents would keep their business relationship with the online retailer giant.
Dare I say that I saw it coming?
From San Jose Mercury News:
In a deal indicating all sides appear ready to call a truce, Amazon.com is offering to back down from its referendum drive to repeal an online sales tax in exchange for a one-year moratorium on collecting the tax, sources close to the talks with Amazon said Wednesday night.
Does that mean Amazon would bring back its Associates Program to California residents?
Previously on Amazon.com and California:
Amazon.com terminates its Associates Program in California in response to Governor Jerry Brown signing the law that requires online retailers to collect sales taxes even though they don’t have any physical presence in California.
The New York Times reports that:
Amazon said this week that it would push a voter initiative in California that could eliminate sales tax for virtual sellers with only a modest physical presence in the state.
Amazon.com founder and CEO Jeff Bezos supports the streamlined sales tax initiative, which should be legislated by the federal government.
Amazon.com sends termination notices to its California Associates program members as Governor Jerry Brown signed the law that requires online retailers to collect sales taxes even though they don’t have any physical presence in California.
Hello,
Unfortunately, Governor Brown has signed into law the bill that we emailed you about earlier today. As a result of this, contracts with all California residents participating in the Amazon Associates Program are terminated effective today, June 29, 2011. Those California residents will no longer receive advertising fees for sales referred to Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com.
Would you still purchase products from Amazon if they were charging Sales Tax?
California Governor Jerry Brown has signed the law that requires online retailers to collect sales taxes even though they don’t have physical presence in California. Amazon announced that they will terminate the Associates program in California.
We do use our Amazon Associates account to feature products on our site (and blog). We are also based in California.
It is not the first time Amazon cancels their Affiliate programs in certain States due to new Tax Regulations. This time Amazon cancels the Affiliate Program in the State of Colorado. Previously Amazon canceled Affiliate Program in the State of North Carolina and Rhode Island. This means that Peter Griffin, Glen Quagmire and Joe Swanson are not eligible to participate in Amazon Affiliate Program.
From Amazon.com Associates Agreement:
In addition, if at any time following your enrollment in the Program you become a resident of Colorado, North Carolina or Rhode Island, you will become ineligible to participate in the Program, and this Operating Agreement will automatically terminate, on the date you establish residency in that state. In addition, you must promptly notify us in writing of your Colorado, North Carolina or Rhode Island residency, which you may do via the Contact Associates Customer Service form available here.
Starting June 1st, 2008 Amazon started collecting sales tax for any orders shipped within the State of New York. Amazon threatened to cancel Affiliate Program but opted to collect the sales tax. Amazon has filled a lawsuit challenging the constitutionality of the Tax Regulations.
The State of California is considering a bill that requires out-of-State online retailers to collect sales Tax for any fulfilment within the Sate of California. If and when such bill passed by California Government, Amazon has to reconsider its business strategy considering the large amount of sales generated by its Affiliate Programs.
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Disclaimer
37prime participates in Amazon Affiliate Program.