Amazon Vetoes California Tax Affiliates
Not many domain shattering events happen anymore. But when a Internet giant moves, domainers feel the ground shake. Ripples are spreading through the online community at the blatantly militaristic stance one company is taking toward online commerce. Is it time for online retailers to have their own uniform commercial code?
A new California law is costing many California B2B merchants their livelihood, but business watchers wonder if normal sales tax should apply to online transactions. The sales tax applied to online transactions for the new law derives from an older community based model of economics where sales taxes pay for local community services. This creates an opportunity for non-Californian business to snap up the lost revenue their Californian counterparts will miss out on.
Many other online service vendors such as Overstock.net are also defending executive decisions not to support additionally taxed vendors. This decision by Amazon.com leaves online merchants in a disadvantageous position due to nothing more than inconvenient geography. The entire model of doing business online, whether from Ebaycom or Amazon.com or a central platform website becomes a diceroll when tax issues throttle a business.
The time for an ombudsman for domain and online commerce has come, especially when the overall economy will suffer due to a poorly thought out law. With over forty other states without the added tax to furnish services, the California online retailers and merchants will suffer for poorly planned government greed. How come California domain owners, online business merchants and B2B specialists didn’t have a voice in this new law enactment?
Amazon has long been a Internet leader in storefront capacities and the direction that the commerce regulation is taking is becoming conflicted. Amazon in articular is choosing to sever relationships with California based affiliates rather than be tasked with collecting additional sales tax from those vendors for sales and monitoring their sales tax reporting and collection through their sales channel.
The domain name world has been rocked by the announcement that California Sales Tax is now due from Amazon storefronts and vendors per transactions. This means that Amazon affiliates must collect additional tax. They therefore must feature this surcharge or above the line additional charge in all their billing, pricing and advertisement offers.
This knocks the online shop and commercial B2B seller for a loop. The allows persons not located in California to exercise a business advantage over the same business type owner not sourcing goods or operating from a California location. Governor Jerry Brown of California has enacted legislation that removes a California merchant from the list of desirable business partners an online vendor or product portal desires.
Californians need to act to prevent unfair business competition this law allows. If the California business operator wants to remain competitive with a non-Californian entity, they must pay in effect a surcharge for conducting Amazon transactions in this manner. That Amazon refuses to operate along these lines should come as no surprise. The Amazon success model does not include a tax-collection attribute
Amazon stores are enriched website design offerings and blog templates that enable site users, vendors, and home businesses to feature and lit their products on the Web. This can happen from their own site, an Ebay listing, via an Amazon account, or via affiliate websites and online stores. Supposedly this is an effort by California tax authorities to collect lost revenue for online goods.
The model for the Amazon store website will also change wit this legislation, as customers and site visitor must be advised of the additional taxation. Amazon.com avoids this issue by eradicating the presence of Californian merchants within its network altogether. The anticipated $200 million net increase in revenue will probably not materialize.
But with the proposed additional ten per cent charged to the buyer, prices (and terms) will not be attractive to the public as much as the non-Californian competitors would offer equal merchandise. This is a matter which should be addressed by many legislative and judicial authorities, and begs the question regarding whether the internet should have it own branch of legal business code and standards and practices for protection against unfair laws and poorly constituted commercial legislation.



