June 30, 2009

Legislature shoots citizens

Well, that may be a little bit of hyperbole, but telling Internet retailers that they must collect Hawai'i General Excise Tax and rebate it to the state has had the predictable result:

Amazon.com Inc. has informed its marketing affiliates in Hawaii that it is ending its business with them in order to avoid collecting sales tax in the state.


In an e-mail sent to Hawaii affiliates on Tuesday, Amazon said it would end its accounts with them effective June 30. "We were forced to take this unfortunate action in anticipation of actual enactment because of the uncertainty and timing of a veto, and the possibility that a veto could be overridden," Amazon wrote.

Sucks to be you, Hawai'i bloggers with Amazon affiliate accounts. You'll just have to pay your (probably Mainland-based) web hosts out of pocket, rather than with the small commissions you earned from sales through that program.

Posted by Linkmeister at June 30, 2009 10:26 AM | TrackBack

I don't know why the whole collecting and paying Hawaii tax is a big deal...those of us in Washington have to pay sales tax on every Amazon order and I assume that Amazon forwards that on to the governor and that we're talking about a small bit of programming to keep track of the total.

Maybe it's a political decision?

Posted by: Karan at July 1, 2009 10:20 AM

Amazon collects sales taxes where it has a physical presence: North Dakota, Kentucky, and Washington.

I think that's its objection: "We aren't in your state, so we don't feel we should be subject to your tax." It may also be that having to deal with 50 different sets of tax laws worries the company.

Posted by: Linkmeister at July 1, 2009 10:32 AM

I think that Amazon it battling California too. I also seem to remember a fight between Washington (state) and Barnes and Noble and the collection of sales taxes...B&N made the same argument...no brick and mortor facility means no sales tax.

I wonder if this sort of debate will lead to that dreaded National Sales Tax.

Posted by: Karan at July 1, 2009 10:40 AM

I think it's more likely to result in something like this Streamlined Sales Tax legislation, which would establish federal rules for Internet sales taxation.

Posted by: Linkmeister at July 1, 2009 11:24 AM