Amazon in tax dispute with Japanese government—and also may lose to States in U.S. controversies
Who says the U.S. is the only country where Amazon has tax issues? From Kyodo News: “Tax authorities ordered a Seattle-based affiliate of online retailer Amazon.com Inc. to pay ¥14 billion in back taxes for unreported income earned in Japan during the three years through December 2005…” (Thanks to Mike Perry.)
Here in the U.S., the Wall Street Journal separately predicts that tax collectors in various states may win battles with Amazon over the collection of sales taxes on purchases. Excerpt:
Over the past month, lawmakers in New York, Rhode Island, North Carolina and Hawaii passed legislation that would force e-commerce companies to collect sales tax if they have in-state online-marketing affiliates, people who get a commission from sales via their Web sites or blogs. The states argue that that those affiliates amount to sales agents with a physical presence, while e-commerce companies say they’re more akin to advertising channels. To avoid getting caught by the new laws, Amazon, Overstock, Blue Nile Inc. and others dropped or threatened to drop affiliates in some states.
Some people are saying that the new laws are a convenient excuse for Amazon to back off from its affiliate program. What do you think? As it is, Amazon offers $0 on sales of Kindle-format books.
July 6th, 2009 at 2:17 pm
Amazon doesn’t need affiliates anymore, but I don’t think they’ll stay off the hook indefinitely if they drop them. Considering the budget crises states are having, I wouldn’t be surprised to see changes in the rules so that any sale to a resident is taxable. Here in California you’re supposed to pay “use tax” on sales from out-of-state retailers as it is. It’s just that most people don’t do it…yet.