Regulations cost money
I just do not understand politicians sometimes. They pass a law that says, hey, if you share your profits with people in our state then you have to deal with all of our regulations on sales taxes. Then, they act surprised when companies like Amazon stop sharing their profits.
What is the big deal? Collect the tax. It’s not a big deal. I’m at a loss to understand why Amazon and why Overstock have dug in their heels.
That’s from State Revenue Services Commissioner Kevin Sullivan. Not a big deal? Do they really believe that regulations are free?
I doubt that Amazon’s affiliate program brings Amazon much money. I can’t remember the last time, if ever, that I’ve bought something on Amazon solely because of an affiliate link. At best, I might buy something a little earlier than I otherwise would have.
Weigh that against having to maintain tax expertise in each of the states with these requirements and be open to regular tax audits from those states, and I not only can’t blame Amazon for ending the affiliate programs, I want them to do it. Keeping the program would just mean strengthening the make-work support industries involved in navigating government regulations, and pushing us closer to the bureaucracy event horizon.
If states really want to collect sales taxes in other states, they need to do it right: tax based on the seller’s location, not the buyer’s. Otherwise, you’re building a regulatory maze that will block innovative new companies from starting up and raise prices due to the costs of regulatory compliance.
In response to Punishing low-tax states: An Internet sales tax that looks at the customer’s state instead of the seller’s state punishes states with low sales taxes and inhibits competition.