The Rhode Island Legislature has done it again. They have managed to find a way to not only drive more Rhode Island small businesses out of business or out of state, but at the same time they have managed to reduce tax revenues in the state. To top it all off, their actions are likely unconstitutional. This does not seem like the way to get Rhode Island back on its economic feet.
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! (more…)