NC’s Amazon Tax Will Worsen Short-Term Budget Problems
Posted by Chad BordeauxWednesday, March 10th, 2010
The Tax Foundation released a special report on Monday that indicates that the “Amazon Tax” laws signal business unfriendliness and will worsen short-term budget problems. Currently, four states (North Carolina, Colorado, Rhode Island and New York) have some form of a law that require Companies that have “affiliates” in their states to collect sales tax from their customers in that state.
For those that may be unclear as to exactly what an affiliate is, let me explain it as simply as I can and use Amazon.com as an example. Amazon allows other website owners to post links or advertisements to their products on their website. In exchange, Amazon pays those website owners a small commission on the products sales that this generates. Simply put, these website owners are basically providing a targeted advertising medium to Amazon. What the “Amazon Tax” law does is it requires Amazon (or other Internet retailers) to collect sales tax in a particular state, even if Amazon has no physical presence in that state.
Chad is a Charlotte CPA who works with small business owners and invidiuals on a monthly basis to provide them with proactive guidance and advice on how to grow their business, minimize their tax liabilities and grow their bottom line. You can find our more about Chad by visiting his profile here: Chad Bordeaux
