Amazon to fight having to withold tax on affiliate members!

[Gerry]

Amazon picks Colorado to stage tax fight
Law requires retailer to pay money to state based on sales from affiliates

I reported last year how Amazon "dumped" its affiliates in NC because the state of NC wanted Amazon to collect sales tax from us for selling their products.

No way, said Amazon, and rather than protest or fight the ruling, Amazon simply dumped us. And Amazon also gave the heave-ho to Rhode Island as well.

Now Amazon has decided to take a stand against this.

I recommend reading this story so you can see what is going on. States are essentially scrambling to look for ways to make up budget shortfalls. That's all well and good but Amazon refuses to play Tax Man for the states.

I hope something changes or ceases or soon we may all get dropped.

FULL STORY

[kspd]

The states are not the only ones looking for money. Starting in 2011 there is going to be a new 1099 form for 3rd party processors. (like paypal) Paypal and any other similar service will be required to report to the government how much money they facilitated in transferring to you and send you a copy of this form.

Here is the big problem. Lets say you are an affiliate and you get a 1099 from the paying company when tax time comes. But they pay you with paypal. Then paypal also has to send you a 1099.
You must submit both forms with your taxes, but it will essentially show that you made twice as much income as you really did.
Your tax forms will always show a discrepancy and you will be pretty much constantly audited and penalized for the discrepancy and you will have to pretty much every year fight it out with the IRS to show you made half as much money as your 1099's show.
Either that or just suck it up and pay double tax.

Fun

[Raider]

If only inefficient States like NC, RI, CA and CO were effective in cutting costs in their own backyard, they wouldn't have to scramble for more tax revenue.... Take California for example, the biggest welfare state in the Country, they too are talking about taxing Amazon sales, Like it's really going to prevent them from declaring bankruptcy, This is a State that has a massive budget deficit, the highest of any other State, Nearly 1 million jobs lost in 2009 alone, Businesses are moving out in droves because of over taxation and over regulation.

Now you would think with the recession, deficit, record unemployment, lost revenue, the fiscally responsible thing to do would be to reduce the size of Government, downsize and cut public jobs right? NOT so in Sacramento, In 2009 California added 3600 workers to the Government payroll, In 2008 they hired 3100, That's an INCREASE, it's as though California was in NO trouble at all.... This is what these bastards do, it's business as usual and when their facing a deficit, they know they can cry the blues and the Tax payer will go along with yet another Tax increase.

I recommend reading this story so you can see what is going on. States are essentially scrambling to look for ways to make up budget shortfalls. That's all well and good but Amazon refuses to play Tax Man for the states.

Odd, I couldn't find the story on PMSNBC'S home page... I kind of figured this was where you get your news and information, While browsing the page I saw a picture of Keith and it occurred to me that you and him are soooo much alike, always blaming the same Republicans for all our nations problems, Bush, Cheney, Roe, Paulson, Oh and of course Sara Palin and her Husband, And yet, not a mention about Obama, who in case you forgot has been running this Country into the ground for the past year, And without any Republicans standing in his way.

[Johnn]

Paypal will issue 1099 starting 2011 if
1. receive more than $20,000 in payment volume in a single year; and
2. receive more than 200 payments in a single year.
https://www.thepaypalblog.com/2008/0...ts-become-law/

[Gerry]

I have no problem getting 1099's from anyone.

I have been legitimately claiming domaining as a business (and business expense) for years.

Actually, if PayPal sends me a 1099 that would certainly simplify matters for me.

---------- Post added at 10:00 AM ---------- Previous post was at 09:55 AM ----------

The states are not the only ones looking for money. Starting in 2011 there is going to be a new 1099 form for 3rd party processors. (like paypal) Paypal and any other similar service will be required to report to the government how much money they facilitated in transferring to you and send you a copy of this form.

Here is the big problem. Lets say you are an affiliate and you get a 1099 from the paying company when tax time comes. But they pay you with paypal. Then paypal also has to send you a 1099.
You must submit both forms with your taxes, but it will essentially show that you made twice as much income as you really did.
Your tax forms will always show a discrepancy and you will be pretty much constantly audited and penalized for the discrepancy and you will have to pretty much every year fight it out with the IRS to show you made half as much money as your 1099's show.
Either that or just suck it up and pay double tax.

Fun

You need to start considering using a schedule C. You will get a 1099 on INCOME EARNED. Then it will be up to you to deduct paypals fees (as commission) and deduct the taxes you paid.

Even if you do not use a Schedule C this year, just take a look so you can familiarize yourself with what you have to do and the record keeping you have to keep to make sure you can claim any deduction possible.

---------- Post added at 10:36 AM ---------- Previous post was at 10:00 AM ----------

Edit:

Good to see Raider stooping to new lows (or highs?) to portray her psysho mentality.

Of course, lets blame Obama.

As for where I get my news, I surely ain't a member of the Church Of Fox.

It was in the (egad...say it ain't so) business section of MSNBC's front page.

Glad to see the GOP front person (raider) trying to dispel the Tag of Party of No to Party of Whine

[draggar]

This will be a great case to watch. One of my affiliates dropped their program because of different laws in different states in regards to collecting taxes. I'm sure they'll be watching this very closely. In the past it was easy to track, transactions took place at the same place where the delivery took place and where the person got paid. Now you can have the official sale taking place in one location (where the order is shipped from), being delivered to another location, and paying commission to a person in yet another place.

I think Amazon has the resources to put up a good fight and set the standard for other affiliate programs.

The states are not the only ones looking for money. Starting in 2011 there is going to be a new 1099 form for 3rd party processors. (like paypal) Paypal and any other similar service will be required to report to the government how much money they facilitated in transferring to you and send you a copy of this form.

Here is the big problem. Lets say you are an affiliate and you get a 1099 from the paying company when tax time comes. But they pay you with paypal. Then paypal also has to send you a 1099.
You must submit both forms with your taxes, but it will essentially show that you made twice as much income as you really did.
Your tax forms will always show a discrepancy and you will be pretty much constantly audited and penalized for the discrepancy and you will have to pretty much every year fight it out with the IRS to show you made half as much money as your 1099's show.
Either that or just suck it up and pay double tax.

Fun

I would think "double taxation" (taxing the same item / income twice) has already been challenged - maybe an attorney could speak up on this?

Paypal will issue 1099 starting 2011 if
1. receive more than $20,000 in payment volume in a single year; and
2. receive more than 200 payments in a single year.
https://www.thepaypalblog.com/2008/0...ts-become-law/

That doesn't make sense - normaly they create tax laws like this to cover as many people as they can.

So, I could take 199 payments and no matter how much I made (even over $20,000) they wouldn't report it.
Or, i could take 1,900 $10 payments and they wouldn't report it.

Despite someone asking the same question I'd like to see the actual law to clarify this. I'd find it hard to believe that they could leave such a large and obvious loophole open (say you're reaching 150 payments and are over $20,000 - then open a new savings account and a new PP account and continue with that one).

[Gerry]

I think Amazon has the resources to put up a good fight and set the standard for other affiliate programs.

I hope so.

I miss using them on my sites.

I have even thought about contacting family members (Florida, Ohio, Virginia, Mississippi, Louisiana) to use their mailing address as a contact and just forward any mail to me.

I am licensed in the State of North Carolina and Delaware so I may contact my licensing agent in Del. to see if I can legally use that address.

[kspd]

Doc Com, Johnn, Thanks for the info, I still think that there are a lot of questions to be answered. I participated when the IRS was asking for public comment.

Raider, you really think a single man.. with all the checks an balances this country still sort of has.. can just run a country into the ground whenever he wants?
No.. It is all of them. Republicans, Democrats, and all of their corporate buddies.
I hate all of them. Not a single one actually has the interests of the country and people in mind.

[Gerry]

Despite someone asking the same question I'd like to see the actual law to clarify this. I'd find it hard to believe that they could leave such a large and obvious loophole open (say you're reaching 150 payments and are over $20,000 - then open a new savings account and a new PP account and continue with that one).

Here is the biggest fear I have had (and everyone else should also) and the reason I have been claiming expenses, etc.

If you sell a domain for $5K, and you don't report that as income, that is your option.

However...
if the buyer deducts that amount from their operating expenses
and that buyer is then audited and the agents see this expense was paid
and the buyer has a receipt to match
the agents may then see if the corresponding amount was claimed by the seller.

Everyone can do their own thing.

But I do not want to be slapped with an outstanding tax bill from 2004 for a domain I sold for $5K and have to not only pay tax on that income but also pay the IRS penalty and interest imposed.

I prefer to walk that fine line and make everything appear legit.

---------- Post added at 01:57 PM ---------- Previous post was at 01:50 PM ----------

Doc Com, Johnn, Thanks for the info, I still think that there are a lot of questions to be answered. I participated when the IRS was asking for public comment.

I am not a tax attorney and I do not play one on TV.

If you (or any domainer) is in the US, now may be a good time to consider incorporating or forming an LLC.

Depending on how you register, the tax form may be different (Schedule C, Schedule SE, etc).

But if you take a glance at Schedule C, this will give you a heads up on how to start keeping records, how you want to claim inventory (yes, domains are inventory), fees and commissions paid, and other expenses (including home office, travel, entertainment, cost of software, computer, cost of making a site, taxes and fees you paid for licenses etc.)

There is a lot to learn so you might as well start now.

[whitebark]

CJ released a map of the US detailing which states are presently doing it, which are currently mulling it over and which where it was already defeated by the state legislature. It was more than the states she rails against, including Raider's beloved republican states.
http://www.cj.com/news/internet_tax.html

Never let facts get in your way Raider! Facts are for those educated liberals to use!

[Gerry]

Never let facts get in your way Raider!

Too precious to just let it pass unnoticed.

---------- Post added at 02:41 PM ---------- Previous post was at 02:38 PM ----------

http://www.cj.com/news/internet_tax.html

Outstanding and a BIG thank you!

Now I can see the states I may want to establish a residency in.

We really need google to get on board with this.

---------- Post added at 02:46 PM ---------- Previous post was at 02:41 PM ----------

I really love the rationale by the Virginia Legislature that voted it down:



The fiscal note attached to the Virginia bill soberly explains why revenue windfalls are unlikely from Amazon taxes, and why they can actually reduce state revenues:

When similar legislation was enacted in Rhode Island and North Carolina, large online retailers ended their affiliate programs. If this were to happen as a result of this bill, there would be no additional revenue from the enactment of this bill. In fact, by ending the affiliate program with Virginia vendors, such vendors would likely lose business and remit less Retail Sales and Use Tax to Virginia. Ending affiliate agreements in Virginia would also reduce or eliminate the commissions and profit that the affiliates receive from these agreements. Although there is only very limited publicly available data, the reduction or elimination of such commissions and profits would likely have a negative impact on those businesses' profits.17

[draggar]

Here is the biggest fear I have had (and everyone else should also) and the reason I have been claiming expenses, etc.

If you sell a domain for $5K, and you don't report that as income, that is your option.

However...
if the buyer deducts that amount from their operating expenses
and that buyer is then audited and the agents see this expense was paid
and the buyer has a receipt to match
the agents may then see if the corresponding amount was claimed by the seller.

Everyone can do their own thing.

But I do not want to be slapped with an outstanding tax bill from 2004 for a domain I sold for $5K and have to not only pay tax on that income but also pay the IRS penalty and interest imposed.

I prefer to walk that fine line and make everything appear legit.

But there is another concern - HOW do they claim it on their taxes? I think some people here in the past got a 1099-misc form which is supposed to be used when someone is hired as a non-employee (contractor) so it puts it in a completely different tax code as it would if it was a business expense. If they're trying to hide business expenses / investments then they can do this. With a 1099-misc nothing is shown as taken out in taxes (I'm looking at my wife's now for some work she did last year for a couple of days).

There are so many unethical / illegal things that companies can do today to other people to save their own @$$es (or to cover them) and it costs the little person big bucks to either pay it or defend it.

I think this case will go far beyond affiliate sales (although that will get the largest result of it).

[Gerry]

But there is another concern - HOW do they claim it on their taxes? I think some people here in the past got a 1099-misc form which is supposed to be used when someone is hired as a non-employee (contractor) so it puts it in a completely different tax code as it would if it was a business expense. If they're trying to hide business expenses / investments then they can do this. With a 1099-misc nothing is shown as taken out in taxes (I'm looking at my wife's now for some work she did last year for a couple of days).

There are so many unethical / illegal things that companies can do today to other people to save their own @$$es (or to cover them) and it costs the little person big bucks to either pay it or defend it.

I think this case will go far beyond affiliate sales (although that will get the largest result of it).

1099 typically does not show taxes taken out and I have never seen one that does. Typically, it is what it is - miscellaneous income.

A company that does not submit a 1099 can still claim a purchase (any purchase), but in this case a domain name, we can expect to see this written off of their books as an Advertising expense.

I am getting 1099 from sedo, and a few others it seems, this year.

That is the risk everyone takes when they do not file (or claim) certain income - the other person (the one that gave you the money) may be claiming it as a deduction.

And to be honest with you, I would have thought that the IRS would have gone after ebay YEARS AGO! There are billions being exchanged and not claimed on there. Now, ebay mainly uses PayPal as the ONLY form of payment. Ergo, look out all you ebay sellers that have not been claiming that income!

As you mentioned, this case will go far beyond affiliate sales (be sure to follow the links previously posted).

New York has on the books a proposed "iPodTax" to charge sales tax on downloaded tunes, programs, software, etc. The common acronym is "iPod Tax" to cover every thing downloadable including ringtones.

Gee, I wonder who owns iPodTax dot com?

[Raider]

CJ released a map of the US detailing which states are presently doing it, which are currently mulling it over and which where it was already defeated by the state legislature. It was more than the states she rails against, including Raider's beloved republican states.
http://www.cj.com/news/internet_tax.html

Never let facts get in your way Raider! Facts are for those educated liberals to use!

Nice map, it confirms what I said about California. I was just mentioning the states in the OP, You see Whitebark, in no way was I referring to California's debt probems as Democrat or Republican, you did that all by yourself, But since you bring it up, California is the largest Democratic State that holds a Democratic majority in the state legislature, It's also the biggest welfare state in the Country.... And I'm confident if I go through each and every one of these States that passed a Amazon tax, tried to pass it or is considering passing it, I'll bet most are run by fiscally irresponsible Democrats in the State legislature.

Like the state were discussing; Colorado, Both houses are controlled by the Democratic Party.

And in the State of Nevada, same story;

Democratic wins could bring new revenue to state

With Democratic wins across Nevada, power has shifted within the state legislature. Given a mandate and a near supermajority, the Democrats have the opportunity to solve the state’s budget woes, but some worry ideology will keep them from finding a solution.

-

Even in Alabama, Democrats hold the majority.


Never let facts get in your way WhiteBark, Facts are for those educated Republicans to use!

[Gerry]

Yeah, Whitebark.

Don't you know by now? Its never her fault.

I thought I raised you better than that.

[Raider]

As for where I get my news, I surely ain't a member of the Church Of Fox.

So you avoid the channel and live your life on what PMSNBC spoon feeds you?... And you call yourself a "Free Thinker"?

How do you become a "Free Thinker" by listening to only one side of the argument?, How is that done? And with all the Republican and Bush bashing MSNBC does day after day after day, how do you manage learn anything about current events?

Fox's motto; "We report you decide"

MSNBC's Motto; "We decide you report"

And you sure are doing a lot of reporting these days.


But back to the original topic, you know what I find so laughable about it?

Here you are, a "Liberal Democrat" b*tching about a Tax.. You should be happy to pay such a tax, it's what drives the welfare system you so strongly believe in.... It's what you voted for in November, More taxes, bigger Government, remember that?

[Gerry]

Thanks for proving my point.

It is never Raider.

It is everyone else.

You PMSNBC is perhaps one of 6 or 7 different front pages (home page) headlines that I can view at once (ooo...I can name a newspaper). It called a widget, and it is build into my landing page. It does contains FoxNews, Reuters, CNN, NYtimes, NPR (yes, there is a print edition), BBC, and my local news. That is for national and international news. I have widgets also for Technologial news, Medical news, and even Domain News.

I depise, can't stand, abhor the broadcast version of FOXnews (yes, even though they promote .mobi) because they shout the news, interject their opinion WAY too often, and do not report the news...actually, very much in the way you bug the hell out many on this forum.

I find you hopeless and helpless and actually, pretty ****ing wacky.

I am not kidding when I say you need mental help.

You're preoccupation with trying to discredit me by attempting to turn the tune of a thread is bothersome and a definite sign of psychotic behavior, at the very least an unhealthy preoccupation and obsessing over trying to discredit me. You are nauseating to no end and makes you look like an donkey's ass in every post.

---------- Post added at 06:36 PM ---------- Previous post was at 06:28 PM ----------

Also, this is not about paying taxes as I pay my taxes.

It is not about a new tax (for me) because I do claim the affiliate income as earned income.

It is about a few states trying to strong arm Amazon and a few other affiliates (SierraTradingPost) into being the bookkeeper and wanting those affilates to withhold state income tax from what they pay me and send it to the state. Instead, they are dropping states that pass and have such laws.

In essence, it is almost as if they want to treat me as an employee of or a contractor of Amazon, SierraTradingPost and a few others.

And as the state of Virginia pointed out in their assessment after seeing other states take the lead, passing such a measure is of NO BENEFIT in attempting to raise new taxes when the affiliates are dumped. The End Game is No Gain.

[Raider]

I depise, can't stand, abhor the broadcast version of FOXnews (yes, even though they promote .mobi) because they shout the news, interject their opinion WAY too often, and do not report the news...actually, very much in the way you bug the hell out many on this forum.

Your suggesting PMSNBC reports the news better than FOX News? That PMSNBC is NOT opinionated but Fox News is?

Hands down, this is got to be the [U]stupidest thing you ever wrote.

And as far as "opinions" go, many of their programs ARE indeed "opinion" oriented and many are not... Anyone with a half a brain can figure that out, But I can perfectly understand why a Liberal jackass like yourself would get irritated watching Fox News, I mean who wants to hear both sides of an argument in a factual manner, right?

I find you hopeless and helpless and actually, pretty ****ing wacky.

I am not kidding when I say you need mental help.

You're preoccupation with trying to discredit me by attempting to turn the tune of a thread is bothersome and a definite sign of psychotic behavior, at the very least an unhealthy preoccupation and obsessing over trying to discredit me. You are nauseating to no end and makes you look like an donkey's ass in every post.

You think I'm intentionally trying to discredit you? LMAO! Why so paranoid? Nothing intentional really, I've read so much of your one sided rhetoric, that I probably know you better than anyone else on this Forum, And from what I learned about you; when somebody gets the best of you, you refuse to let it go, carrying your anger and frustration with you everywhere you go, Beating a dead horse until you feel that you won. You bring up threads that are 1 to 3 years old and tell us how wrong everyone was for disagreeing with you and how right you were, Always looking for that extra reassurance, 3 freakin years and your still thinking about it, My God, what's wrong with you?

I have news for ya, your NOT right all the time, and your one that never admits when he's wrong, Your a 60 year old man who lives his life being intellectually dishonest with himself, That's why your so miserable, Your your own worst enemy.

Also, this is not about paying taxes as I pay my taxes.

It is not about a new tax (for me) because I do claim the affiliate income as earned income.

It is about a few states trying to strong arm Amazon and a few other affiliates (SierraTradingPost) into being the bookkeeper and wanting those affilates to withhold state income tax from what they pay me and send it to the state. Instead, they are dropping states that pass and have such laws.

So your NOT opposed to the Amazon Sales Tax?, but rather your upset with States trying to strong arm Amazon and it's affiliates, making them in a sense "bookkeepers"? Is this what your saying? I just want to be clear on this.

[Gerry]

There are so many unethical / illegal things that companies can do today to other people to save their own @$$es (or to cover them) and it costs the little person big bucks to either pay it or defend it.

I think this case will go far beyond affiliate sales (although that will get the largest result of it).

Seems like these threads get off track pretty often.

Anyways, speaking of taxes, I just saw on CNN a piece about a Carwash out in California that was slapped with a backtax bill.

Now, the guy showed the papers so I don't think is fabricated...

but supposedly this carwash owed backtaxes of - get this now - four cents. Yes, $0.04.

But with penalty and interest, that amount is now $225.32.


I have a feeling this guy must have really pissed someone off at the IRS. I have never heard or seen anything like this.

Although, 2 years ago I was audited (in March, of all times when I am doing my current year's taxes) and it ended that I owed a tad over $13.00.

It was just a paper audit but nonetheless it was untimely, stressful, and very time consuming.

[Gerry]

I am sure Raider will be elated with the news that Dell has ONCE AGAIN extended through October.

She seems to be so concerned about the well being of this community.