JobsCarsHomesRentalsPlace an ad »
         E-mail          Print          Text
Tax strife pinches e-retailers
web: Amazon.com cuts small businesses
Published: 07/03/09  12:05 am
Comments (0)

NEW YORK – In a big break for online shoppers, Web retailers generally don’t have to charge sales taxes in states where they lack a store or some other physical presence.

Increasingly, states aching under the weight of the recession are seeking a way around that rule. Because companies such as Amazon.com Inc. get help drumming up sales from online affiliates – people who link to products on their blogs, promote Web shopping deals and offer coupons – several states say the Internet retailers should charge sales taxes in states where those affiliates are based.

The financial benefits might not be quite what the states anticipate, though. Rather than gearing up to collect taxes, Amazon and other Web retailers are simply shutting down their affiliate marketing programs. As the small businesses that participate in these programs get cut off, a state could lose tax revenue rather than add to it.

A look at what the affiliates do helps explain why. They’re just one of several methods that e-commerce companies have for driving visitors to their Web sites, so nixing them is not necessarily a big loss for the companies.

It’s a far bigger deal to people like Rich Owings.

By running Web sites like GPSTracklog.com from his home in Asheville, N.C., Owings serves as an affiliate for Amazon and other companies. Owings, 53, spends most of his time reviewing GPS gadgets and covering industry news. He links to navigation products of his choosing on Amazon’s site, and if his readers click through and buy one, he gets a commission.

Owings estimates he brought in about $80,000 in affiliate revenue from various companies in 2008, about $50,000 of which came from Amazon. After Amazon recently shuttered its North Carolina affiliate program in response to that state’s attempt to collect sales taxes, Owings said he and his wife were thinking about heading elsewhere to run their business.

“We’re terrified,” he said. “We just bought a house here a year ago and we’re looking at having to move out of state just to keep our business going.”

The amount of money at stake overall for state governments is somewhat murky. According to a recent University of Tennessee study, uncollected state and local taxes from online sales could total $7 billion this year.

Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
 

Comments

JOIN THE DISCUSSION

We welcome comments. Please keep them civil, short and to the point. ALL CAPS, spam, obscene, profane, abusive and off topic comments will be deleted. Repeat offenders will be blocked. Thanks for taking part — and abiding by these simple rules. A thorough explanation of rules of conduct can be found in our Terms of Service.

Comments are displayed newest first. If you would like to read a thread from beginning to end, select "Oldest first" from the drop down menu.
Presented By
Previous Ad Next Ad
0/0
Homes By
Previous Ad Next Ad
0/0
A Serious Man American Memorial At Your Service Plumbing AT&T B&I Coin Shop Bergman Draper & Frockt Bose Corporation Classy Chassis Coast Home Improvement, Inc. Dejà Vu Dollar Store Dr. Thomas Young NMD, DC Fantastic Mr. Fox Farmers Insurance Group Galaxy Theatres Harbor Audiology & Hearing Services, Inc. Harnish Buick / Pontiac / GMC / Lincoln / Mercury Hartley & Hartley Insurance Homestead Restaurant Johnny's Dock Restaurant & Marina Kantor Diamond Company Katherine E. Crabill D.D.S. Kenneth P. Ring, DDS King Oscar Convention Center / Holiday Coin Show Macy's Muckleshoot Casino MultiCare Mary Bridge Children's Hospital / Festival of Trees MultiCare Orthopedics & Sports Medicine Narrows Glen New Tacoma Cemeteries & Funeral Home Northwest Chapter of Paralyzed Veterans of America Northwest Charity Donation Service Oreck Clean Home Store Pacific Northwest Polish Pottery Party World Peninsula High School / Winterfest Philly Joe's Pibank Precious Procera AVH Puyallup Cars Red Wind Casino REI Roof Therapy, Inc. Russ Dunmire Skelley Piano Smith Alling Lane, P.S. Sports Authority Star Ice & Fuel State Farm Insurance STIHL Sturtevant's Ski Mart Superior Court of the State of Washington, King County Tacoma Boys / H & L Produce The Twilight Saga: New Moon Titus-Will Ford / Lakewood Ford Titus-Will Ford / Toyota / Scion Truckcity CB, EV and Solar University of Washington Vargus & Associates, Inc. Video Only Volvo / BMW Repair Washington Council of the Blind Watson's Greenhouse & Nursery We The People, P.S. Law Office Window World STIHL Sturtevant's Ski Mart Superior Court of the State of Washington, King County Tacoma Boys / H & L Produce The Twilight Saga: New Moon Titus-Will Ford / Lakewood Ford Titus-Will Ford / Toyota / Scion Truckcity CB, EV and Solar University of Washington Vargus & Associates, Inc. Video Only Volvo / BMW Repair Washington Council of the Blind Watson's Greenhouse & Nursery We The People, P.S. Law Office Window World STIHL Sturtevant's Ski Mart Superior Court of the State of Washington, King County Tacoma Boys / H & L Produce The Twilight Saga: New Moon Titus-Will Ford / Lakewood Ford Titus-Will Ford / Toyota / Scion Truckcity CB, EV and Solar University of Washington Vargus & Associates, Inc. Video Only Volvo / BMW Repair Washington Council of the Blind Watson's Greenhouse & Nursery We The People, P.S. Law Office Window World STIHL Sturtevant's Ski Mart Superior Court of the State of Washington, King County Tacoma Boys / H & L Produce The Twilight Saga: New Moon Titus-Will Ford / Lakewood Ford Titus-Will Ford / Toyota / Scion Truckcity CB, EV and Solar University of Washington Vargus & Associates, Inc. Video Only Volvo / BMW Repair Washington Council of the Blind Watson's Greenhouse & Nursery We The People, P.S. Law Office Window World STIHL Sturtevant's Ski Mart Superior Court of the State of Washington, King County Tacoma Boys / H & L Produce The Twilight Saga: New Moon Titus-Will Ford / Lakewood Ford Titus-Will Ford / Toyota / Scion Truckcity CB, EV and Solar University of Washington Vargus & Associates, Inc. Video Only Volvo / BMW Repair Washington Council of the Blind Watson's Greenhouse & Nursery We The People, P.S. Law Office Window World
Front page PDF