Last week, Amazon severed all ties with its online associates in Missouri as the result of a new state law that subjects online transactions that take place via Amazon associates to state taxation. If you believe in taxation, you probably think this sounds fair–Amazon has been sliding out of paying state taxes for some time now. Isn’t it time to pony up?
The situation is complicated. Missouri isn’t just asking for taxes on products shipped from a facility or housed in a warehouse in their state–in fact, Amazon has no Missouri facilities. Rather, the state now requires that Amazon pay state sales tax on all purchases resulting from an Amazon Associate located in Missouri who qualifies as a “click-through nexus”–meaning they refer at least $10,000 of sales to Amazon per year. For example, Jane Smith, Amazon Associate working from her home in Missouri, maintains a number of blogs that review the best running watches. Her blogs have multiple links to the Amazon website and she refers over $10,000 in sales to the company each year, for which she collects a comission. The new Missouri law would require Amazon to collect and pay state sales tax from these purchases.
Clearly, Amazon thinks this is going too far. Another wrinkle in the issue is that state sales tax laws are quite complicated, and differ from state to state. According to a recent Shelfawarenesspro article, the Amazon email to their Missouri associates says, “We thank you for being part of the Amazon Associates Program, and look forward to re-opening our program when Congress passes the Marketplace Fairness Act,” which grants states the right to collect sales tax from online retailers, but only after the state has simplified its sales tax laws, to make collecting and remitting the money a reasonable endeavour.
Yet another twist in this tale: according to NBC.com, “Rep. Jeremy LaFaver, a Kansas City Democrat who co-sponsored the bill, said the Missouri Legislature did not hear from Amazon when the measure was being debated.” They didn’t speak up for their interests when they may have influenced the outcome, but chose a course with more finality than an ultimatum.
We can’t help wondering–If the mega-company hadn’t so readily turned a blind eye to state tax laws in the first place, would Missouri have considered this new law?
What’s your opinion?
