[acebritty]

saw this on wtnh online. i'm sure more will follow. not good. not good at all!

Overstock severs ties over sales tax

Updated: Tuesday, 24 May 2011, 10:50 PM EDT
Published : Tuesday, 24 May 2011, 10:50 PM EDT



Hartford, Conn. (AP) - Online discount retailer Overstock.com Inc. says it has canceled ad contracts with Connecticut affiliates rather than collect the state's sales tax recently extended to online sales.

The Salt Lake City-based company said Tuesday it believes the law requiring out-of-state retailers to collect sales tax is unconstitutional. Web sites that get a share of the sales price when an online customer buys a product through an Overstock.com link will no longer be paid.

The 6.35 percent tax, which applies to online sales for the first time, takes effect July 1. The state expects to raise $9.4 million.

Gov. Dannel P. Malloy was asked about Overstock.com's decision. He said he supposes the tax could have an impact on other businesses, but that he is not familiar with how much business Overstock.com does in Connecticut.

[Scott R]

They refer to this as the "Amazon tax" because that's where the big money is (in terms of sales tax collection) but the lawmakers who supported this have their heads in the sand because when bills like this were passed in other states, Amazon severed ties to the affiliates in those states, thus re-exempting them from having to collect sales tax in those states. That then costs the state more money, rather than making them more money, because any affiliates making at least $500 would have triggered a 1099 by Amazon at tax time, so they'd end up paying state income tax for it, not to mention the loss in income that those affiliates will now face which would have trickled down into the state economy in other ways.

[Scott R]

Here's a great write-up about it and how it's impacted other states. It also lists all of the companies that have severed ties with CT as a result of this passing:
Dozens of online retailers cuts ties with CT affiliate marketers | Hartford Business

It isn't just Overstock.com...there are approximately 50 companies listed. Amazon isn't on the list, yet, but it will be interesting to see what they do. Apparently they are challenging the law in NY but have severed their affiliate relationships in RI and NC, two other states that passed similar laws.

[JViello]

Just another nail in the coffin. I wonder how many people making second incomes or stay at home moms making ends meet as affiliates are out of work now. Thanks state government.

Now, the really screwed up thing here is they already have a law on the books stating that CT residents must claim all internet purchases and pay tax on it. So why did they pass another law putting the responsbility on the companies?

Are they nuts? Do they not realize something as simple as the logistical cost to a company to have to implement collecting, reporting and paying sales tax for just one state? Overstock, Amazon etc run on already razor thin profit margins...I can just about guarantee you this decision was made simply by calculating the costs to implement such a process vs profit margin. They are not going to lose money just to service a state.

[JayCT]

It is not just Connecticut trying to do this. New York, Rhode Island and several others as well. Jay

[belleislerunner]

From the same linked article above...

When this bill passed in North Carolina, over 200 merchants quit working with affiliates. The tax was such a failure that North Carolina, Rhode Island and Colorado have all introduced legislation to repeal it. FYI - instead of collecting the $5MM projected by proponents of the bill in Colorado, the state actually only collected $20,000.

[JViello]

Originally Posted by JayCT

It is not just Connecticut trying to do this. New York, Rhode Island and several others as well. Jay

3 states did it, (RI, CO, NC) and all have introduced legislation to repeal it as it's a disaster.

Colorado estimated it would take in 5 million...it ended up with $20,000. Yes, $20,000 and God knows how much income tax revenue loss. ETA: I didn't see the post above that already outlined this.

This testimony showed up on the Hartford Business Journal.

I am an affiliate marketer and I live in CT. I have a website where I advertise widgets that are sold by a company in Oregon. A person who lives in California visits my website (which by the way is hosted in TX) and sees the advertisement for the widgets and decides to buy them from the link on my website.

Now CT says that the Oregon company has to pay CT sales tax because I, here in CT, advertised the product. There is no CT involvement other than the fact that I host a website in TX that has an advertisement on it to sell a product from another company based out of state.

You say this is "right"?

CT will not collect any sales tax from this because the companies are dropping all affiliates in CT. The state has now lost income tax from all affiliates in CT. I don't see how not getting the tax, plus losing my $50,000 yearly income benefits the state of CT.

If it does ... you will need to explain it to me because it makes absolutely no sense at all ... which of course is why "brain blind" politicians passed it.

[briansol]

This is ruining my life.

If one of my 'big 3' goes on with this like overstock/etc, i will have no choice but to move.

NH seems to be the place to be right now.

CT is closed for business thanks to dannel

[jjinla]

In NY, Amazon does charge sales tax. They tried cutting their affiliates and all, and have been to court on it several times, but so far it has stuck.

As such, I always ship all of my Amazon stuff to my mother out of state and have her bring it to me when she visits every few weeks. I refuse to give one dime that I don't have to to this state.

[JViello]

Originally Posted by jjinla

I refuse to give one dime that I don't have to to this state.

Obviously that shows you hate the poor and grandmothers on tiny state pensions, and are against good schools, fireman and police.

Do you still beat your wife?

(I hope you get the sarcasm and realize this is the game the left plays.)