As booksellers, most of us use Amazon as a primary (or at least major) channel for selling our books. I’ve talked before about the issue of Amazon and taxes. Amazon’s polices make very clear their dedication to not collecting sales tax for you.
I’ve also warned you about taking on Amazon. Amazon is an 800 lb gorilla, and pretty much nobody is going to make it do anything it doesn’t want to. Some state lawmakers just learned that the hard way.
In an article published yesterday in the Wall Street Journal, Geoffery A. Fowler reports that Amazon has “ended its business relationships with marketing affiliates in Rhode Island so the online retailer could avoid collecting sales tax in the state.”
Rhode Island, like many other states, is facing a massive budget crisis. One solution that they came up with was to pass a bill requiring any businesses who have online marketing affiliates in the state to collect sales taxes. This isn’t the first state to try this tactic to generate revenue, New York passed a similar law last year.
When North Carolina seemed poised to do the same last week, Amazon cut its ties to all of its North Carolina affiliates. The same thing happened yesterday with Rhode Island affiliates, with Amazon again dropping them before the bill had even been signed into law by the governor.
Now, to be perfectly clear, this doesn’t directly effect us as sellers. Affiliates are businesses who get a (more…)