You may remember that Amazon.com stopped doing business through “affiliates” (websites and blogs) in California, after the state passed a law requiring companies like Amazon to collect state sales taxes on purchases made through California affiliates.
Amazon has settled with California and will resume its relationships, but it sounds like a sell out to me as taxes will be collected starting a year from now and part of the deal obligates Amazon to work for a national sales tax collection law (emphasis mine):
Now that Amazon.com has settled a summer-long dispute with the state of California over collecting sales taxes on Internet purchases, the world’s biggest e-retailer wants to hook up again with 10,000 operators of affiliated websites that it fired in late June.
On Tuesday, Amazon e-mailed its “California associates,” telling them it’s ready again to start paying them commissions for any sales made to customers who “clicked through” to Amazon’s shopping site.
“As you may have heard, California Gov. Jerry Brown has signed legislation repealing the law that had forced us to terminate our California Associates,” Amazon said. “We are pleased to invite all California Associates whose accounts were closed due to the prior legislation to re-enroll in the Associates program.”
As part of the deal with Brown, lawmakers and bricks-and-mortar retailers, such as Wal-Mart Stores Inc. and Target Corp., Amazon agreed to start collecting sales taxes in September 2012 and work with California and other states to ask Congress to pass a national Internet sales tax collection law.
National retailers, who feel they are at a disadvantage at bricks and mortar stores, are quite happy:
Now that the largest state in the country has seemingly pressured Amazon to change its policy, the result could be a flood of new online tax laws, as other states ask why Amazon can’t treat them the same as it treats California.
Danny Diaz, spokesman for the Alliance for Main Street Fairness, a group trying to get the online retailers to collect taxes, says Amazon has undermined its own case by striking the California deal.
“You begin your argument by saying you can’t do it, it’s too complicated, it’s unconstitutional and all of this,” Diaz said, “and you end your argument by saying you’ll do it in a year, it’s legal, you can do it. Clearly, clearly the ground has shifted underneath your feet.”
The days of tax free internet shopping are close to over.