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  #1  
Old June 26th, 2009, 12:20 PM
amagab amagab is offline
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Default Take Action Now - Stop our anti-business politicians

In other threads I have talked about the Internet being a great opportunity for business growth in our State....especially in the rural areas. Well, our state is crushing the chances of online business by creating new regulations, taxes, and hurdles. For some reason it avoided my radar until I received an email from Amazon.com this morning (I'm an affiliate):

Quote:
We regret to inform you that the Hawaii state legislature has passed an unconstitutional tax collection scheme that, unless vetoed soon by Governor Lingle, would leave Amazon.com little choice but to end its relationships with Hawaii-based Associates. You are receiving this e-mail because our records indicate that you are an Amazon Associate and resident of Hawaii.

Please note that this is not an immediate termination notice and you are still a valued participant in the Associates Program. All referral fees earned on qualified traffic will continue to be paid as planned.

But because the new law is drafted to go into effect July 1st, we will have to terminate the participation of all Hawaii residents in the Amazon Associates program on or before that day. After the termination day, we will no longer pay any referral fees for customers referred to Amazon.com or Endless.com nor will we accept new applications for the Associates program from Hawaii residents.

The unfortunate consequences of this legislation on Hawaii residents like you were explained in detail to key senators and representatives in Honolulu, including the sponsors, committee leaders, and House-Senate conferees. We also have explained by letter these unfortunate consequences to Governor Lingle, and have twice requested her veto.

Note that other states, including Maryland, Minnesota, and Tennessee, considered nearly identical schemes, but rejected these proposals largely because of the adverse impact on their states’ residents.

Governor Lingle's website is http://hawaii.gov/gov, the Hawaii legislature's website is http://www.capitol.hawaii.gov/, and additional information may be obtained from the Performance Marketing Alliance at http://www.performancemarketingalliance.com/.

We thank you for being part of the Amazon Associates program, and we will apprise you of next steps.


Sincerely,

Amazon.com
Please don't let this happen to our small businesses in Hawaii. We won't survive with all these anti-business politicians running wild.

You can help by going here, get the email template, and email your rep:

http://www.performancemarketingallia...tes-email-now/

Mahalo!
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  #2  
Old June 26th, 2009, 01:36 PM
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Red face Re: Take Action Now - Stop our anti-business politicians

There's a good discussion of this bill at TechHui. I blogged about it a couple of weeks ago as well. At least one of the commenters on my blog support the bill, because he feels affiliate marketers should be taxed just like everyone else. The issue is, of course, that affiliate marketing programs like Amazon will just quit Hawaii rather than deal with the administrative overhead of collecting state taxes.

Considering the mad scramble for revenue and the looming government worker furloughs, I'm not sure Lingle will be able to veto a bill to collect taxes that essentially should already be collected (we all disclose online purchases as part of our state tax filings, right?). But with Amazon and other retailers likely just dropping Hawaii partners, and given what it'd take to simply implement and administrate the new tax, I doubt we'd get the millions of dollars the authors of the bill think we'll get.
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  #3  
Old June 26th, 2009, 09:10 PM
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Default Re: Take Action Now - Stop our anti-business politicians

This is what happens when legislators get involved in the free enterprise system.

Oh crap I said I wouldn't talk religion or politics! Auntie I need some whack whacks please
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  #4  
Old June 27th, 2009, 09:38 AM
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Default Re: Take Action Now - Stop our anti-business politicians

Quote:
Originally Posted by pzarquon View Post
But with Amazon and other retailers likely just dropping Hawaii partners, and given what it'd take to simply implement and administrate the new tax, I doubt we'd get the millions of dollars the authors of the bill think we'll get.
I had no idea that collecting taxes was such a horrificly expensive burden for a company which basically revolutionized access to cloud computing. After revolutionizing mass merchandising and shipping. After... well, you get the point.

I suspect two other issues are at work:
- If Hawaii passes a tax bill then everyone else will do it, and
- It wasn't that profitable in the first place.

Amazon was in a business with razor-thin margins and they're ready to move on to something else before they start losing money.

Don't get me wrong-- I'm no fan of a governor who raises taxes, kills high-tech business credits, and has taken several other anti-business measures while claiming to be a Republican. There are also a few "we promise" issues that appear to have been ignored as Act 221 was gutted.
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  #5  
Old June 27th, 2009, 05:36 PM
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Default Re: Take Action Now - Stop our anti-business politicians

I was curious about how this would work with Hawaii's "use tax". As I understand it, anytime someone purchases goods or services outside of Hawaii for use in Hawaii, the purchase price is subject to a use tax and the burden on paying the use tax falls upon the purchaser (even if the purchaser is an individual and not a business). I have heard the Tax Director a few times now emphasizing that people who make purchases out of state should get a use tax id number (but if you have a general excise tax number, your GE number is your use tax number) and would need to file your use taxes monthly, quarterly, semi-annually or annually like a GE tax. One specific example related to online purchases. So, in the currently conceived tax frame, if I purchased something from an online company that did not cut us off after July 1 and that company passed on the sales tax to the customer, would the purchase then be subject to both the use tax and the sales tax? and the Tax Director did mention that there may be circumstances where a purchase may be subject to both the use tax and GE tax ~ for example, if you buy something out of state and then re-sell it in-state. So in a worst worst case scenario, might there be a sales tax, use tax and GE tax on a purchased item? wow. or will the sales tax replace the use tax?
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Old June 28th, 2009, 08:56 PM
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Default Re: Take Action Now - Stop our anti-business politicians

Quote:
Originally Posted by pzarquon View Post
There's a good discussion of this bill at TechHui. I blogged about it a couple of weeks ago as well. At least one of the commenters on my blog support the bill, because he feels affiliate marketers should be taxed just like everyone else. The issue is, of course, that affiliate marketing programs like Amazon will just quit Hawaii rather than deal with the administrative overhead of collecting state taxes.

Considering the mad scramble for revenue and the looming government worker furloughs, I'm not sure Lingle will be able to veto a bill to collect taxes that essentially should already be collected (we all disclose online purchases as part of our state tax filings, right?). But with Amazon and other retailers likely just dropping Hawaii partners, and given what it'd take to simply implement and administrate the new tax, I doubt we'd get the millions of dollars the authors of the bill think we'll get.

I think perhaps the difference is that the burden of keeping track of and paying the use tax is currently on the consumer and the law shifts the burden to the seller/online company. There is a case that gives weight to Amazon's claim that doing so is unconstitutional (unless the business has a significant physical presence in the State).

Quill Corp. v. North Dakota, 504 U.S> 298 (1992)

http://www.law.cornell.edu/supct/html/91-0194.ZO.html
http://en.wikipedia.org/wiki/Quill_C...._North_Dakota
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  #7  
Old June 28th, 2009, 09:51 PM
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Default Re: Take Action Now - Stop our anti-business politicians

if this tax does not get vetoed we will begin seeing all retailers excluding hawaii. right now there are quite a few that dont want to be bothered with the shipping hassles....or have contracts with ups and fedex and the rates are exorbitant. the few that use usps priority mail will just decide its not worth it.
we will be cut off from the mainstream product lines that we seek on the internet.
a good business to consider would be a forwarding business, that specializes in accepting parcels in a tax free state and sending them on to hawaii and elsewhere that feels they need to tax everything in sight.
the internet istelf has set a precedent as a mostly tax free venue.
i think most retailers will survive without hawaiis business.
ikea does just fine....there are others as well.
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Old June 28th, 2009, 11:05 PM
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Default Re: Take Action Now - Stop our anti-business politicians

Quote:
Originally Posted by escondido100 View Post
[...]
a good business to consider would be a forwarding business, that specializes in accepting parcels in a tax free state and sending them on to hawaii and elsewhere that feels they need to tax everything in sight.[...]
ShiptoHawaii.com is such a forwarding business except the shipping address is in California...not a tax free state. Then there's the added shipping fee from CA to HNL. In addition, it doesn't offer home or business delivery. Packages must be picked up within a certain amount of time at it's facility near the airport.
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  #9  
Old June 28th, 2009, 11:29 PM
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Default Re: Take Action Now - Stop our anti-business politicians

I'm not understanding things here: what is the difference between ordering from Amazon.com and an "affiliate" site? and which one will be taxed by this new law?
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  #10  
Old July 1st, 2009, 04:15 PM
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Default Re: Take Action Now - Stop our anti-business politicians

http://www.bizjournals.com/pacific/s...l?ana=from_rss

Overstock.com joins Amazon in cutting off Hawaii affiliates.

anapuni808: I am not a tax expert by any means but I think the difference is this: there is case law that says that it's unconstitutional to shift the burden of collecting the sales tax to a company that does not have a significant physical presence in the State that wants the company to collect the tax. Amazon itself, as a company, sometimes sells items and Amazon has no real physical presence in Hawaii. Thus, Amazon may not have to collect the sales tax for items sold directly by Amazon. However, "affiliates" are local businesses that sell their products through Amazon. I assume the Hawaii affiliates have a physical presence in Hawaii and thus must collect the sales tax. I think the dispute comes in where Hawaii's government seems to be taking the position that since Amazon is the "umbrella" under which these local companies are selling their products, Amazon must collect the sales tax and remit it to the State of Hawaii. Amazon says that's unconstitutional because Amazon does not have a physical presence in Hawaii so it should not be responsible for collecting any of the tax.
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  #11  
Old July 2nd, 2009, 02:40 PM
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Exclamation Re: Take Action Now - Stop our anti-business politicians

Lingle vetoes bill aimed at taxing e-commerce
Quote:
Hawaii Gov. Linda Lingle has vetoed House Bill 1405, a bill that caused online retailers to terminate affiliate relationships with Hawaii businesses and households, shutting off a torrent of revenue and income adding up to millions of dollars a year.

The bill sought to collect state taxes from e-tailers though they do not have a physical presence in Hawaii.

State House leaders said yesterday they felt the bill had a technical flaw and therefore would not attempt to override the veto. That means the issue is done for the year, according to House Speaker Calvin Say.
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  #12  
Old July 2nd, 2009, 10:37 PM
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Default Re: Take Action Now - Stop our anti-business politicians

Adri - thanks for your response but you didn't respond to my question. I wasn't asking about the tax itself.

and as of today, the whole point is moot anyway since the veto will not be overridden - at least for now.
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  #13  
Old July 2nd, 2009, 10:53 PM
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Default Re: Take Action Now - Stop our anti-business politicians

Sorry I wasn't clear. I was trying to explain that Amazon itself sells some stuff but sometimes acts as a "middleman" to allow other businesses to sell stuff through their company. and that it's really the affiliates who are subject to the tax but Amazon was being required to collect the tax since it was the umbrella for the affiliates. I think there may be different rules regarding the return policies and fee disputes for items bought directly from Amazon and items bought from affiliates via Amazon.
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  #14  
Old July 2nd, 2009, 11:22 PM
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Default Re: Take Action Now - Stop our anti-business politicians

thank you. now it's more clear. I make a lot of purchases directly with Amazon.com but have never seen any "affiliate" sites.
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