Palisades Hudson has offices in only three states - Florida, Georgia and New York - but the nature of our business allows us Amazon's ongoing fight with state legislatures over sales tax collection has become a familiar story. In state after state, the company and legislators have followed the same script. But now, in California, both sides are looking for a different ending. to serve clients across the country and around the th Dakota, West Virginia, and in some circumstances Ohio, do consider tax preparation services to be taxable. Without the protection of nexus rules, we would be required to track the relevant laws in each jurisdiction where we have clients.
The issue of physical presence, or nexus, is significant, since the Supreme Court has said companies can only be required to collect sales tax in states where they have employees or facilities. Technically, consumers are required to pay the sales tax that out-of-state companies don't collect directly, but in reality, almost no one does this.
The sales tax war began in New York when lawmakers asserted that online retailers could be considered to have a physical presence in the state if they paid commissions to in-state "affiliates." Amazon, whose popular affiliate program was clearly the target of the law, is suing.be used to establish a company's presence, even when those subsidiaries are not involved in any retail activity. While Amazon is itself based in Seattle and has no offices in California, its wholly-owned subsidiary A2Z
As the New York lawsuit has slowly worked its way through the court system, Illinois, Arkansas, Connecticut, North Carolina and Rhode Island have the Golden State continued with Amazon seeking to take the issue to the streets through a voter referendum.
California's new law differs from previous iterations by claiming that subsidiaries, in addition to affiliates, can does have offices in the state. Those offices house the software all passed their own "Amazon laws." Rather than starting duplicate lawsuits in multiple states, Amazon has responded in each case by ending relations with affiliates. Both sides lose in this situation. States don't get the sales tax money they're after and they risk Amazon affiliates moving their businesses, and their tax dollars, to other states. Amazon, meanwhile, loses referrals. But, for some reason - most likely pure desperation - states continue to pass these laws.
At first it seemed California would repeat this pattern. Gov. Jerry Brown signed a sales tax collection law on June 29, and Amazon immediately announced that it was terminating relationships with its approximately 25,000 California affiliates. But instead of ending there, the battle in
gurus responsible for development work on Amazon's online music store and its top-selling product, the Kindle reader. Though Amazon has shown that it is willing to sever ties with affiliates, moving A2Z would prove harder.
In addition to the higher stakes posed by the subsidiary clause, California's relatively easy ballot access makes the situation different from those Amazon has faced so far. A second lawsuit would be costly and redundant, but the possibility of a referendum lets Amazon take its case to a new audience.
Most likely, Amazon's motivations are rooted more in self-interest than principle. Many voters who end up supporting the referendum will likely be guided by self-interest as well, looking to save a few dollars at the online checkout screen. But all of that self-interest may end up bolstering an important legal principle that is critical for small businesses.
For a large retailer like Amazon, the administrative costs associated with collecting sales tax are more or less negligible, making the main disadvantage higher costs for customers. For a smaller business, however, the burden of keeping track of the laws and tax rates of 50 states (with thousands of local variations in rates and taxable items) would be difficult or impossible to meet. Legislatures' growing disregard for the nexus principles that limit tax collection responsibilities to in-state businesses poses a real threat.
Posted by Intan Nurianti For : Infoduniaini , Updated at: 11.59 Description: Rating: 4.5 Reviewer: 19 Review Item Reviewed: |
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