It’s April 15, so hopefully nobody’s waiting in long lines at the post office (though we think you should be using the Internet to file electronically). Unfortunately, it’s only April but already it has been a taxing year for online commerce.
We’ve seen six tax-related categories of bills that have been introduced in state legislatures this year: (1) Privacy-invading purchase reporting laws; (2) Bounty hunter bills; (3) affiliate advertising as a nexus for requiring sales tax collection; (4) imposing hotel taxes on online travel companies; (5) expanding Internet sales taxes based on inadequate simplification; and (6) new taxes on digital downloads.Read More
He climbed cathedral mountains, he saw silver clouds below
He saw everything as far as you can see
And they say that he got crazy once and he tried to touch the sun
And he lost a friend but kept his memory
-John Denver, Rocky Mountain High
We know that states are increasingly looking to tax anything and everything, including on the Internet. As Declan McCullagh reported earlier this week, Colorado and “fifteen other states have considered or are considering enacting laws targeting Amazon and other e-commerce companies that typically do not charge sales tax for shipments sent outside their home state.” These nexus taxes are #2 on the NetChoice iAWFUL list of bad legislation.Read More
There’s a lot of misinformation surrounding the so-called “Amazon tax.” Advocates call for an advertising nexus tax because they think a sales tax collection obligation for out-of-state online companies is an equalizer for brick-and-mortar “main street” retailers. Even if that were true, advertising as a nexus for sales tax obligations is not the way to achieve increased revenues (we think it harms the local economy). A recent example of the confusion surrounding this complex issue is today’s editorial supporting new tax legislation in the Lynchburg News & Advance.
The editorial supports SB 660, a legislative proposal to create the “Amazon tax” in Virginia. However, the editorial gets it wrong on a number of accounts, and fails to consider how this legislation would hurt Virginia’s economy.Read More
Back in June, we introduced iAWFUL (the Internet Advocates’ Watchlist for Ugly Laws) as part of a broader effort to push back against America’s worst Internet legislation. Two months have passed, and while many of the bills in the top 10 have changed, they remain every bit as AWFUL.
But before I get to the truly AWFUL measures in the new list, it’s worth mentioning a few that fell off the list, in large part thanks to the pressure that Internet advocates exerted through iAWFUL:
#2 on the June iAWFULlist was a California bill that would have forced unworkable technical restrictions on the posting of photos to social networking pages. The bill’s sponsor responded by working with Internet advocates to fix problems with the measure.
#3 on the June iAWFUL list was a bill in Connecticut that would have required sales tax collection by out-of-state businesses that pay commissions to in-state affiliates. The Governor heard our concerns about the impact on in-state publishers and school charities, and has thus far kept this measure off the table in budget negotiations.
#5 on the June iAWFUL list was a Connecticut bill to let police conduct searches of homes where goods were being stored by online dealers – without having to obtain a search warrant. Thanks to iAWFUL publicity, this bill stalled in the House.Read More
Online travel companies (like Expedia, Orbitz, and Travelocity) are intermediaries between hotels and consumers. They offer big discounts on hotel rooms, and they charge service fees for making the booking. Millions of consumers are now using these services, especially for leisure travel.
Now, local governments where these hotels are located want to impose new taxes on these service fees. We’re not talking just about the local sales tax here; these guys are demanding the hotel & occupancy tax PLUS the regular sales tax, which amounts to 15-22% in taxes on your hotel bills.Read More
Yesterday was a big day for any business, nonprofit organization, or fundraiser that relies on affiliate advertising that depend upon Internet advertising for important revenue and fundraising efforts: Governor Schwarzenegger vetoed the nexus tax and calls up Overstock.com to invite to reinstate their affiliates in California.
As we’ve written previously, all sorts of organizations depend on Internet advertising. Online companies are experimenting with new ways to deliver products, services, and content, and business of all kinds are going online to reach consumers and advertise to receptive audiences. The Gov’s veto sends a strong message that this growing business model is welcome in California.Read More
Check out today’s Wall Street Journal editorial on the affiliate nexus tax that North Carolina is considering — aptly titled Tarheels vs. the Internet. This comes on the heels (pun intended) of news that Amazon will terminate its affiliates in North Carolina. It also talks about the tickets tax, which is blatantly in violation of the Internet Tax Freedom Act because it only applies to the Internet resale of tickets.
Amazon.com announced yesterday that it won’t be paying the price of affiliate advertising in North Carolina if the state uses it to assert nexus for sales tax collection. It will stop using affiliates in the Tar Heel state, which is what Overstock did in New York when the state was considering the affiliate nexus approach.Read More