Amazon, Overstock and Other Internet Retailers Sever Ties with Affiliates in Connecticut and Arkansas; Texas Legislature Advances Amazon Law

 By Paul Masters

This is the year of the Amazon. Multiple sources, including individual affiliates, are reporting that Amazon, Overstock and other Internet retailers are severing ties with their affiliates in Connecticut and Arkansas. Both of those states recently enacted changes to their sales tax laws that required Internet retailers to collect sales tax on transactions made with persons in those states. The states were able to “reach” the Internet retailers through an expanded nexus by means of the “associate” or “affiliate” programs commonly used by such vendors.

Meanwhile, the Texas legislature continues to advance its bill to require Internet retailers with distribution centers owned by affiliated companies to collect sales tax. SB 1, having been already passed by the Senate, then amended and passed by the House, is heading to conference to reconcile changes. The Senate has already named its representatives to the conference, and the House is expected to act today. Passage is likely to occur by the end of this week. Both houses strongly support the Amazon provision in SB 1, despite the Governor’s stated opposition. Because the Amazon provision is in the fiscal matters bill, and essential to the Texas budget, it cannot be subject of a line-item veto and Governor Perry will be forced to sign it if it is ultimately passed into law.

Explore posts in the same categories: Sales and Use Tax, SALT

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One Comment on “Amazon, Overstock and Other Internet Retailers Sever Ties with Affiliates in Connecticut and Arkansas; Texas Legislature Advances Amazon Law”

  1. […] In a letter written to the Governor, Maryland Comptroller Peter Franchot advised that state leaders not pursue the issue of remote sales tax collection until authorized by Congress.  Franchot rationalized that the state should not expect to be able to collect the estimated millions lost each year due to the uncollected sales tax.  Furthermore, he noted that enactment of legislation would result in the “virtual assurance of litigation.”  Additionally, as we have reported previously, Franchot touched on the fact that states that enact legislation requiring remote sales tax collection have prompted remote sellers to terminate affiliate relationships in those states in order to minimize their tax burdens. Previous Posts 1, 2. […]

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