Friday, June 26, 2009

Due to E-tax, North Carolina's Vendors Could Lose Amazon Access

States across the nation are scrambling for solutions to their budget deficits, and as a result, online vendors may feel the squeeze from online fees, also known as iTunes tax, digital goods tax and E-tax.
North Carolina vendors could lose access to Amazon,(NASDAQ:AMZN) America's largest online retailer and reseller.
Amazon may cut North Carolina vendors if the state's E-tax is approved. Spokeswoman Patty Smith told the Wall Street Journal that Amazon views North Carolina's proposed law to collect 4.5% sales tax from online marketing affiliates "unconstitutional" and "isn't appropriate for us to have to comply with an unconstitutional burden."

Is the E-Tax unconstitutional? Yes-According to Americans for Tax Reform,  E-tax is a "complicated scheme to collect more taxes and circumvent the interstate commerce clause."  Interstate commerce clause authorizes Congress “To regulate Commerce with several States.

 stopeTaxes.com, points out why e-Taxes are bad public policy. Several points included in its list include:
eTaxes across state lines violate the Dormant Commerce Clause, which restricts states from passing legislation that burdens or impedes interstate commerce
 

• While many states are seeking to tax digital goods, some states are specifically exempting these products from taxation to entice digital vendors and other high tech companies to move to their state, create jobs, and expand the tax base.
•  E-tax will create a black market for all digital goods, with Napster serving as the example.
• StopEtaxes.com cites a 1992 U.S. Supreme Court Case, Quill v. North Dakota, which upheld that states could not require companies to collect a sales and use tax without either property or employees in the state.

When the first wave of eTax proposals started back in November, we polled you-our readers, to get your opinion on eTaxes. By an overwhelming majority,69%of you, voted against the eTax,   compared to only 15% voting for it and 15% voting-"maybe."

Posted By Matt O'Hern at 03:37 PM
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