Louis Dershowitz › Likes

Oh Glen, this will give me nightmares. - Janet-The Bottley Crue

The one good thing is that everyone else gets it before Silicon Valley this time. - I like big Botts

LOLers. - Micah from FFHound(roid)!

:-) - Stephan Planken from iPhone

Can anyone tell me if it is 2012 or 2011S, I'm not sure?! - Rene, Pro Button Pusher

Can any Mac users tell us what their system date is? :P - caj needs a haircut

I assumed with the Amazon Affiliate thing that it was happening just because Amazon felt the logistics of tracking taxes with affiliates would be more trouble than it was worth, not that it's specifically targeted in the law that just passed. - Spidra Webster

No Spidra, it was specifically because if Amazon has so much as one California-based associate they have to collect sales tax for all purchases shipped to California. California doesn't have the right to collect sales tax from companies that don't operate in California, even if items are shipped here, so they extended 'operating in California' to include 'operating with people who operate in California.' - Kevin Fox

Huh. I just assumed the law was going to collect sales tax from any internet concern that sold anything to anyone located in CA. So how were you suggesting they write the law? (Again, I'm curious. Not being argumentative.) - Spidra Webster

The right way would be to work at the federal level to stop renewing the ban on interstate sales tax. This would mean *all* online purchases would be taxed the same as brick-and-mortar purchases, would level the playing field across all merchants, and bring in a lot of needed state revenue. The 'solution' the legislature passed this week was for show only, helps *nobody* and hurts many Californians who now have no income. - Kevin Fox

Thank you. I didn't realize there was a federal ban on interstate sales tax. - Spidra Webster

And I don't think you're being argumentative. It's a complicated issue and one not widely understood. - Kevin Fox

It's not actually so much of a ban as a waiver from making companies collect the state sales tax. In theory every Californian is supposed to document how much they spent on out-of-state items and add the sales tax payment for those items to their state income tax return. I kid you not. - Kevin Fox

Yep...I think you are supposed to do the same thing with tobacco products purchased over the web. Pretty crazy to believe that anyone will actually do that though. - Scoble, Alex Scoble

Actually, New York has been cracking down on the tobacco products issue because so many people were buying from New Jersey. People have been fined and wages garnished. - Kevin Fox

Here's a great primer on the federal issue of state sales tax, including a SCOTUS decision that companies can't be required to collect sales tax for states in which they have no physical presence: http://ecommercejunkie.com/2009... - Kevin Fox

This issue of affiliates as constituting a 'physical presence' is going to hit the SCOTUS within a few years and settle a lot of these laws, I'm sure. - Kevin Fox

Kevin: There is no "ban" on internet sales tax. The ban on internet taxes prohibits places from taxing internet connectivity.. Like an "email tax" or something like that. The sales tax law simply stems from previous law. You can't tax somebody not in your state and thus not using your resources. - Otto

Otto, which means that a state can't enforce sales tax collection on an out-of-state entity simply because the entity connects to yours via the internet (when placing an order, for example). - Kevin Fox

The bigger issue is the SCOTUS decision which frees entities from collecting sales tax from states where they have no physical presence. Legislating that an affiliate marketer constitutes a physical presence defies the intent of the SCOTUS decision and that's just wrong. - Kevin Fox

Kevin: We're in agreement. California is nuts for trying. - Otto

If Amazon was serious about fighting for its affiliates, though, they wouldn't have just dumped them. They would've fought the state and made the SCOTUS decide sooner rather than later. The thing is that it's all wrapped up in California's budget deal. There was no way the legislature was going to split that out and debate it since they're getting docked pay for every day they didn't have a workable budget. - Victor Ganata

Victor: Amazon is already fighting - they're using New York as their test case. All other states just get shut down for now. - Brian Johns

Amazon is canceling us even though they don't have too, the law specifies a highish minimum threshold, everyone else it doesn't apply to. They are the ones being dicks. - Todd Hoff

Todd: The bad law most definitely applies to Amazon had they kept their affiliates in CA. They had no choice but to dump them or start acting as California's unpaid tax collection agent. - Otto

Bottom line: Amazon is canceling the program voluntarily. There's nothing in the law that says they have to. - Victor Ganata

Victor: Given the choice between them dumping the Amazon affiliates in CA or charging sales tax to all CA buyers (for which Amazon gets less than nothing in return, BTW... Amazon uses none of CA's physical resources and so shouldn't be collecting sales tax for CA anyway), then they clearly made the correct decision. They've done the same thing in several other states already. - Otto

Otto, they didn't have to drop everyone, but they chose too. CA is just the line in the sand. And every company that has a nexus in CA has to collect sales taxes. It's no big deal. They already have wholly owned subsidiaries in CA, so they already have a nexus by any rational measure. - Todd Hoff

Amazon has no nexus in California. Owning a subsidiary in another state does not nexus make. California is trying to expand the definition to include such, but there's no legal justification for them to do so, other than "we want more money and we can't get our own citizens to pay the taxes directly". - Otto

Furthermore, saying that affiliates are equivalent to employees of Amazon and thus would create nexus is thin at best. See Quill Corp. v. North Dakota. Amazon is fighting with New York over this, and it makes no sense for them to keep the affiliates in CA just to fight the same legal battle they're already fighting elsewhere. Dropping those affiliates, until they can get the New York case settled out, makes sense. - Otto

I realize that, but I said rational measure. It's not rational to own something completely and then by legal mumbo jumbo not consider that a nexus. I see, it's just a tax revolt thing for you, so the arguments don't matter much. As the brick and mortar companies pay these taxes so should the internet companies. - Todd Hoff

If I owned a brick in a sidewalk in California, does that mean that I now have to pay income taxes there? "Nexus" involves more than just having structure there. Their subsidiaries are separate companies, that already pay their California taxes. If Amazon owned, say, a company that made their boxes in CA, does that give CA the right to force Amazon to do anything at all? No, it gives CA the right to tax the box making company. Which they do. - Otto

A brick? Are you serious? It's just a legal dodge, otherwise there's no reason for such a structure. - Todd Hoff

No, it's not a legal dodge at all. Companies buy other companies all the time. Or companies exist to create some product with only one major customer buying that product. Heck, look at any car company. Somebody has to make all those parts, and generally speaking it isn't the car company doing it. I know a company that makes the rubber window inserts for Ford. That's their only customer. But the company isn't a part of Ford, although it is owned by Ford. This is not unusual. - Otto

It's interesting that A9 and the Kinlde design studio don't qualify as a physical presence, but affiliates do. Or is Amazon pulling those business units out of the state? - Kevin Fox from iPhone

The State of California does count them as physical presence, which is why they're still trying to go after Amazon even though they cancelled the affiliate program. - Victor Ganata

I bet they cancel the affiliate program. Hard to imagine anymore that they get purchases they wouldn't otherwise get. - Todd Hoff

Good luck getting the GOP to support that. - Jim

Well, it's going to be for the courts to decide, I suspect. - Victor Ganata

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P.S. I am still digging my6sense, and digging into it -- it's on the right track. Smart news readers are the future. - Sean McBride

A good rule of thumb: smart people usually only need to see items once. See, dismiss and hide. Make that process as simple and efficient as possible. - Sean McBride

Sean, you know I am a super fast reader who devours large swaths of information in mighty gulps, right? :) Love the feedback. Trust me, these and other items have been discussed. Much to do! - Louis Gray

Louis -- you devour information like a whale inhales plankton, I know, I know. :) I look forward to seeing whatever is being cooked up for new versions of my6sense. - Sean McBride

Why does this article keep appearing. I already read it. :) - Cristo