Acid-Lounge.com

I use some Amazon products although i have to say not with a huge amount of success, its been 6 months and i havent scraped together enough got a cheque yet! lol
If your living in the New York area and have an Amazon affiliate account, i would watch this one with concern, its gonna get messy for sure!





Full Story here:
http://arstechnica.com/news.ars/post/20 ... ailer.html

I don't see where this has anything to do with affiliates, even ones living in NY.

This is about amazon's CUSTOMERS in NY and amazon collecting sales tax, which doesn't affect the amount affiliates earn.

And amazon already reports the amount you make to the govt, if you live in the US, no matter what state you live in, for income tax reasons (that's a different tax).

The amount you make as an affiliate is based on the purchase price, before any sales tax is added on (not after). So win or lose, it won't affect how much affiliates earn, unless amazon decides never to do business with customers that live in NY (not likely to happen).

Worst case, customers in NY will pay more and affiliates will earn the same amount, no matter where they live.

The problem is lots of people from NY will shop online & in NJ just to either beat their state tax or pay a lower tax.

Tax in NJ is lower than NY, and many things have no tax here...food, clothing, other things considered a necessity. I think NY taxes everything.

They are supposed to report those purchases and pay their state a tax, which is the difference of any tax paid if they paid a tax but a lower amount than their state charges. So if you crossed the river to buy a $1000 TV in NJ, in Jersey City which has half tax (enterprise zone) of 3% ($30), you'd have to report it and pay 5% ($50) to NY. If you bought $100 worth groceries, which isn't taxed in NJ, you'd have to report that and pay the $8 you saved in taxes. There isn't supposed to be a savings in taxes by shopping somewhere else.

People haven't been reporting it like they should though, which means any state with a sales tax is losing money. Businesses aren't required to collect for any state they don't have an actual location in. So as long as Amazon doesn't have any offices or actual employees in NY, they shouldn't have to do NY's job of collecting taxes. But if they lose this case, they will have to start collecting taxes, which will be added to the purchase price of any amazon customer that has their stuff shipped to NY. This isn't taken out of the price of the items, it doesn't cut into affiliate earnings, it is an extra charge that the customer must pay, amazon must collect, and turn over to the state of NY.

The reason why Amazon doesn't want to do this is because then they have to absorb administrative costs of collecting, keeping records, and transferring the money to the state, and they were targeted specifically for this. Other online retailers still won't have to collect this tax for NY if they don't have any offices, stores, or employees in NY.

It has something to do with the technicalities of where the actual purchase took place, and whose point of view it is from. According to some place like Amazon's point of view, the purchase took place at their location. According to the customer's point of view, it took place at their location. The state will agree with the customer, if that customer lives in their state. But Amazon is out of their jurisdiction, tax-wise, so they shouldn't be required to collect the tax for that state. Nor should they collect a tax from customers that don't live in the tax jurisdiction. So if a NY business sells clothing online or through mail order to someone that lives in NJ, they can't collect a NY sales tax from them, because the purchase took place in someone's livingroom in NJ, and NJ doesn't have a tax on clothing.

in the UK, the equivelent would be VAT. And affiliate earnings are not affected by VAT because their earnings are based on price before VAT, and not after. So if VAT goes up, affiliates still get same. If VAT was eliminated, affiliates would earn same.

I don't know if you have to pay taxes on earnings in the UK, but we in the US, depending where you live, get taxed twice...once when you earn it, and once when you spend it. Some places you get taxed even more times when you earn it, because some states have a tax of their own on earnings, and even some cities have it too.

My dad works in NYC and gets taxed to hell & back on his earnings. Federal (everyone has to pay that), NY (because he works there), NJ (because he lives there), and maybe NYC too. Then he pays taxes when he spends it, depending where he spends it and what he buys, too.

So, the people that really have to worry about this is all big online retailers, because if NY wins, they will just keep targeting every big online retailer they can to force the tax on people that never do the legal thing and report it & pay.

No matter what happens, affiliates will still earn the same, no matter where they live, but the cost of doing business with people that live in NY will cause an administrative tax cost that isn't reimbursed by NY, to the retailers themselves. This could result in higher prices for everyone, as the cost is passed on to consumers. Of course, if that happens, affiliates will earn more off the sale, but that would probably only be a few pennies per sale, if that. So don't get your hopes up too much, and be more worried about paying a higher price as a consumer when you shop online.

App, i was actually referring to this part:



Amazon are out to prove that as they have no operational office, personel or hosting in NY, they are not liable for this tax, however the comment above would indicate that Amazon would be liable to collect this tax should they have any affiliates in that area, which in turn would make Amazon liable to collect. Will Amazon want to burden the administration costs and potential loss of their competative edge in the NY area because of a handfull of NYC based affiliate that will be unwittingly making Amazon liable to collect? Perhaps they will close those affiliate accounts to avoid this? Just a thought.




And yes, over here we are taxed numerous times, starting with tax on earnings, then 80% tax on fuel to get to a shop or service, then 17.5% vat on anything we purchase, basically as a rule of thumb all UK citizens can expect to pay around 50% of their earnings in tax, one way or another.

The arangement amazon has with affiliates is as a private contractor type, where affiliates do not work for them. Affiliates work for themselves and run a business of providing advertising for amazon and other companies. It is no different than a magazine accepting cash for placing a print ad in one of their publications. The magazine publisher and the company paying for the advertising are 2 different companies, and are different entities from each other.

On the other hand, if customers made the purchase from the affiliate and the affiliate then turned over the funds to amazon, minus their commission, they would be required to collect the tax and turn it over to amazon, who in turn would have to then send it to the state of NY. Just like people that sell Avon have to collect the tax, because they are collecting the money for the purchase, and they have to collect any taxes along with it and turn them all over to Avon, minus their commission.

The amazon affiliate model is that of a business buying advertising, Businesses do not charge sales tax in states where they have no physical address or employees (people paid by hourly wage or set amount of salary), or affiliates that act as a middleman accepting cash on the company's behalf (like Avon). Businesses do not collect tax for states in which they pay for advertising.

If anything, the can of worms this may open up is that affiliates will have to collect taxes from NY based companies they have ads on their site for, since publishers are selling a taxable product or service: ad space. So you will have to check & make sure any company you are an affiliate with, isn't in NY, before making any deals to display their ads.

I am not worried about amazon losing this case, because I don't think they will, but NY businesses might have to worry if they win, since it could mean it will be tougher for them to buy ad space. Common people that run websites don't want to deal with the hassles of collecting & turning over taxes. It's much easier for the average Joe to tell a company to buy their ad space from someone else.

Bad move on the part of NY. It could have a domino effect with far reaching consequences, with large companies that buy a lot of advertising leaving NY and taking jobs elsewhere, just like a certain fuel tax in NJ drove the trucking industry out and made all companies, nationwide, avoid passing thru the state unless they had to because they were making a delivery here.

NY is going to put itself and its residents in the poor house. I really hope amazon wins for a lot of reasons. It might be the thing to bring more jobs to my state.

Thanks for the info. This all sounds very messy, i guess we will have to see what happens.