What I’m referring to is the recent passage of a law that requires Amazon.com to collect Rhode Island sales tax on sales made through Rhode Island-based associates.  Click here for the entire article from the Providence Business News.  Not surprisingly, Amazon.com immediately severed all relationships with Rhode Island-based associates.

Since book buyers can go directly to Amazon.com to buy their books, with no Rhode Island intermediary, Amazon does not have an obligation to collect the Rhode Island sales tax.  So, now the state will still not receive any sales tax, and no income taxes, property taxes, employment taxes, etc., from the Rhode Island-based associate that may now go out of business, or move to another state.  Absolutely brilliant!

UPDATE

Overstock.com has joined Amazon.com is severing ties with Rhode Island associates as a direct result of actions taken by the Rhode Island legislature.  Click here for the full article from Providence Business News.

ANOTHER UPDATE

Blue Nile, Inc. has joined Amazon.com and Overstock.com in severing its ties to Rhode Island associates.  Click here for the full article from the Providence Journal.  And, click here for the full article in the Providence Business News.  Have the Rhode Island legislators heard about any of this?  Was this their goal?  Where will it end?  Is this good for Rhode Island?

ANOTHER UPDATE

The Rhode Island Division of Taxation has mailed a letter to over 100 on-line retailers informing them of Rhode Island’s new law.  Click here to view the letter that was mailed last week.

ANOTHER UPDATE

According to Steven Roll, Senior State Tax Law Editor at BNA Tax & Accounting, “Overstock.com reinstated its affiliate advertisers in California July 1 and in Hawaii July 2 after governors in both states vetoed bills that would have required the online retailer to collect tax on sales in those states.

“The company reinstated the affiliates in those two states within a day of notifying them that they would be dropped because lawmakers were poised to enact laws imposing a sales tax nexus on Overstock.com based on its affiliate relationships.

“California Gov. Arnold Schwarzenegger (R) vetoed a bill (S.B. 17xxx) with the nexus provisions late June 30, and Hawaii Gov. Linda Lingle (R) vetoed her state’s bill (H.B. 1405) July 1.

“Overstock.com also cancelled affiliate agreements in North Carolina based on out-of-state retailer nexus provisions that may be included in the state’s budget.

“The North Carolina House of Representatives approved budget legislation (S.B. 202) June 13 that included the requirement that retailers are obligated to collect sales taxes on remote sales. The state Senate passed its version of the bill April 9, but did not include that provision.

“Conferees currently are meeting to hammer out the differences in their versions of the two-year budget bill. North Carolina’s fiscal year began July 1, but lawmakers are working under a continuing budget authority and now have until July 15 to come to an agreement on S.B. 202.”