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Originally Posted by Jim in CT
I'm confused...Zimmy says that raising taxes on business has no consequences?? If Zimmy is correct, why would Amazon leave South Cariolina? If Zimmy is correct, how can tax hikes hurt business owners like Johnny D?
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To be fair, this isn't necessarily a tax hike - it's a transfer of tax collection/payment responsibility from the citizen to the business. What states are trying to do is pass legislation so that internet companies that have a presence in their state are forced to collect sales tax, as opposed to trusting citizens to pay the sales tax on internet purchases - which almost no one does. This is why when you purchase printer in from Staples.com or Apple.com, you're charged tax. But purchase the same ink from Amazon.com and there's no tax.
Amazon has affiliates that advertise their products in every state for a commission (well, every state that hasn't passed this "local presence" law). Amazon as decided that complete close their Affiliate programs in the states that pass these laws.
There was a company in [I think it was] Illinois that posted over $30 million in revenue last year. The state passed a similar law and the company picked up and moved across the border within the month. You think the millions of tax revenue lost just from that one company will every be made up?
There isn't a single state that has shown increased revenue due to passing these laws. It's a classic case of politicians creating policy about a topic they don't fully understand.