Amazon Tax in Hawaii: Hope for Colorado

 Posted by on 24 March 2010 at 7:00 am  Activism, Amazon Tax
Mar 242010

Jason Crawford sent me the following two links about Amazon’s battle with Hawaii over sales tax from July of 2009. They’re reason for hope for those of us affected by Colorado’s Amazon Tax — and further evidence that Amazon was not motivated by spite in canceling the accounts of its Colorado Associates.

First, a report from the Wall Street Journal: Inc. has informed its marketing affiliates in Hawaii that it is ending its business with them to avoid collecting sales tax in the state.

Lawmakers in Hawaii, following in the footsteps of North Carolina and Rhode Island, have passed legislation that would require companies to collect sales tax if they have marketing affiliates in the state. Affiliate marketers run blogs or Web sites and get a sales commission by featuring links to outside e-commerce sites.

Hawaii’s governor has until July 15 to potentially veto the legislation, but it has an effective date of July 1.

In an email 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.

So what happened? Amazon’s response to the veto of the bill tells us:

Earlier this month, Governor Linda Lingle vetoed the unconstitutional tax collection scheme passed by the Hawaii legislature in HB 1405. Because the effective date of that bill preceded both her veto and the legislature’s veto override session, we had little choice but to end our advertising relationships with all Hawaii-based participants in the Amazon Associates Program. Now that the override session is over, and the legislature did not override Governor Lingle’s veto of HB 1405, we would like to invite all Hawaii Associates whose accounts were closed due to the pending legislation to re-enroll in the Associates Program.

Amazon likes its Associates! They’re a source of profit! Amazon likes profits! (DUH!) However, Amazon cannot maintain its Associates program at all costs. Based on its words and deeds, it’s not willing to do so at the cost of submitting to burdensome and unfair state and local taxes. It’s well within its moral and legal rights to do that.

Sadly, the lesson of Hawaii — and Rhode Island and North Carolina — was blithely ignored by Colorado Democrats. And it’s still being ignored by the other states considering an “Amazon Tax.”

For more information on this issue, please visit Repeal the Amazon Tax.

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