#Gnomedex 09 Day 2: Angel Djambazov on Amazon, Affiliates, and Taxes

A crash course in legislative insanity.

$23.4 billion in Internet advertising as of 2008. Makes it a target, and Amazon is one of the biggest target.

Cas of Quill Corp. v. North Dakota. Says in order for state sales tax to be charged for an interstate xaction. Court found no due process concern where a vendor is not substantially physically present in the state. What’s “substantial?”

Companies sellinc nationally mus juggle compliance in 7500 different tax jurisdictions.

First battleground was the state of NY. Comc book geeg reads a comic blog, which refers him to a book on Amazon. The geek could be in Arizona or Florida, not NY. But the blog site is in NY, so has no part of the transaction. But the states think of the blog as being part of Amazon’s sales force, which makes it taxable.

Fallout from NY passing th eAmazon tax – Amazon and Overstock filed suit. Overstock ane other eliminated NY affiliates, who reported losses of up to 72% of income. Amazon specific changes partially or directly attributed to compliance concerns: Search affiliates removed; Url shorteners banned. These laws have been passed in NY, North Carolina, and Rhode Island. Was defeated in California (came to veto), Connecticut, Hawaii, MD, MN, TN.

Expecting battle to be repeated next year in a hwole bunch of states.

Legislatures need outreach to understand the issues.

Places to get more info:

Affiliate Voice: http://www.affiliatevoice.com

AICPA: http://www.cpa2biz.com

Center for Democracy and Technology: http://cdt.org/

Performance Marketing Alliance: http:/www.performancemarketingalliance.com/state-legislation-activities

Streamlined Sales Tax Project: http://www.streamlinedsalestax.org/



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