Round up #167: no DRM doesn’t increase piracy for Tor, Mothers’ Day specials

Round up #167: no DRM doesn’t increase piracy for Tor, Mothers’ Day specials

The ILMK Round ups are short pieces which may or may not be expanded later.

Mothers’ Day specials

Oh, how the pace of commerce has changed! Mothers’ Day is this Sunday in the USA, and you can still get deals on line and get the item in time. Whether you are buying for a Mom or not, I thought I’d mention a couple.

First, there’s the deal on the Kindle Fire HD 7″ models directly from Amazon (this doesn’t appear to apply to the 8.9″). You have to enter this code at checkout:

FIRE4MOM

Note that entering it a checkout means you will not get the opportunity to enter it if you use 1-click. This deal is good through May 12th, and only for USA customers. Here is a link to the rest of the

Kindle Fire HD 7″ deal details

Second, DecalGirl has a deal on skins. Skins are really a way to personalize a device, including Kindles and Kindle Fires. It’s like a super duper sticker you put on it. You can even do customized ones by uploading a photo. They have a promotional code for 25% off through May 13th…I guess they even have the late folks covered…so to speak. Of course, you could also let Mom pick her skin.

You can shop here:

DecalGirl Mothers’ Day skins

At checkout, enter the code

THANKSMOM

I assume it’s okay to post this, since they sent me an e-mail they said I could forward to friends…you’re my friends, right?

Senate passes equal collection legislation

I’ve written about this a lot before, and I’m happy to see it moving along (even though it isn’t law yet).

There’s nice coverage of the vote by the Senate to pass equal collection legislation in this

Money.CNN.com article

Just to summarize, it would mean that large internet retailers would collect sales tax at the point of sale on online purchases, similar to what happens in a brick-and-mortar store.

This is key: it is not a new tax.

If people think of it as a new tax, it probably won’t pass the House of Representatives, despite the bipartisan support it has had.

Nobody will owe a penny more of sales tax if this passes…but the vast majority of people will pay more.

That’s because you are probably expected to pay sales/use tax in your state on your annual taxes when you buy things from out of state retailers…but most people just don’t. We do in my family, and it’s a bear…if this does pass, it will simplify things for me.

Can you imagine figuring out your own sales tax on your brick-and-mortar purchases, and then paying it as one lump sum once a year?

I’m not convinced it will pass the House, although there are certainly  motivations  to do so. Amazon and Wal-Mart both support it. More importantly, the Federal government might be able to send less money to the states if the states were able to collect the sales tax they were already owed. However we all know that “logic” isn’t spelled “lawgic” for a reason…the two don’t have a whole lot to do with each other.

Tor going DRM-free has not increased piracy

There’s a fascinating

Tor.com post

that talks about how things are going after a year of being DRM (Digital Rights Mangement) free. Tor is a major publisher (part of Macmillan), and I reported on their decision.

DRM is code inserted into digital content by the publisher to control the use of that material.

When you download an e-book that is DRM-free, there is nothing it that technically stops you from copying it or altering it.

That doesn’t mean that you have the right to do anything you want: you could still do things (like distributing it freely over the internet without permission) which would be illegal infringement.

However, if you want to convert it from an e-book you can read on a Kindle to an e-book you can read on a NOOK, that is apparently okay.

Here’s the key line in a short excerpt:

“As it is, we’ve seen no discernible increase in piracy on any of our titles, despite them being DRM-free for nearly a year.”

That doesn’t mean there has been no piracy (there can even be piracy of DRM-protected files…it’s just harder), but that releasing without DRM hasn’t meant that there was any more or it (as far as they can tell).

As they note, their success doesn’t mean it would be equally successful for all books, but you can bet other tradpubs (traditional publishers) are looking at this carefully.

Taking a Kindle for a test drive…really

My Significant Other and I knew that it was getting to be time to buy a new car (I had a Scion XB with over 150,000 miles on it…it was still doing fine, but you start thinking about maintenance costs at that range).

For me, tech in the car is a big thing. I’ve been listening now to text-to-speech in the car for years.

In the Scion, that was with an FM transmitter, playing through the radio.

We wanted a hybrid. We’d been driving Toyotas (I did like the Scion a lot) and had pretty much settled on a Prius.

Then, we drove a Ford Fusion over the weekend…and bought it.

For us, the drive was just so much better…the feel of it, and especially the visibility.

The tech was fine: it’s practically like having gotten a new computer, which is a fun day for me. I’m not that big on driving, but I really enjoyed it today. I have a touchscreen in the car, but I can also talk to it. The Kindle Fire (and my phone and my Blackberry and my Significant Other’s phone) paired to the Bluetooth with no problem. I start the book on the Kindle (before I start driving), and tell it to play Bluetooth audio…and I’m off and running. It also has two USB charging ports, so I don’t need a car adapter with this one.

Unrelated to the Kindle, the back-up camera is crazy cool. I haven’t had a new car for about nine years, so this all new to me. I really like that it shows me two virtual reality lines for where the car is going to go…and if you turn the steering wheel (even before you start moving), it shows you the projected path. It’s going to take quite a while before it feels natural to look forward (at the screen) when backing up, but I can clearly see the advantages.

That “taking a while” thing happens, though. I had a funny one the other day. The clock in our bathroom died, and I’m often reading on my Kindle Fire in there while I exercise and brush my teeth (I take a long time doing the latter). However, I did have a paper magazine up on the towel rack where I normally put my Fire. I caught myself reaching up to push something on the paper magazine to see what time it was. I didn’t get very far, but that’s clearly become a habit for me.

Some people ask why an RSK (Reflective Screen Kindle…anything but a Kindle Fire) doesn’t show a clock all the time. One reason why their batteries last so long is that they do very little when you are reading. They redraw the “page”, and that’s about it unless you tell it to do something. If there was a clock, they’d have to redraw the page at least every minute…that would eat up battery charge life.

What do you think? Will equal collection legislation pass the House? How will it affect Amazon if it does? Did you buy any more books from Tor because they went DRM-free? How do you use your Kindle in the car? Feel free to let me and my readers know by commenting on this post.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

Senate approves equal collection budget amendment

Senate approves equal collection budget amendment

I’ve written many times about equal collection legislation.

What that would be is federal legislation that would result in large internet retailers (like Amazon) collecting sales tax at the time of sale on purchases in states where they do not have a nexus (essentially, a physical presence, but a sales force counts in addition to buildings). That would make your purchase from an out-of-state retailer seem more similar to your purchase from a brick-and-mortar store: sales tax would be collected when you made your purchase.

It’s very important to realize that this is not a new tax. Generally, purchasers are supposed to pay those taxes (they may be a “use tax” at that point) on their annual state taxes, the same time they pay they income taxes.

We do that every year (I’m still working on our taxes for this year), and it’s been a bear in the past. We have to go through our internet purchases, figure out whether or not taxes were collected, then figure out which purchases are taxable in our state (not all purchases are…e-books delivered electronically, for example, are not subject to sales/use tax in California where I reside…but e-books on a CD would be), then pay one big lump sum.

I was quite happy when Amazon started collecting and then paying the sales tax for me on purchases. That makes it far easier than doing it myself.

However, it is likely that the vast majority of people do not pay those taxes. The states don’t (currently) have a way to know about those purchases, so it’s hard for them to enforce the payment. Oh, I assume they can sock it you for penalties and fees if they catch it on an audit, but that’s an expensive thing to do.

So, people have been introducing equal collection legislation for some time, which would compel the collection (although it’s a bit complex).

How do you think Amazon feels about that?

They are for it…big time.

In 2011, Amazon Vice-President Paul Misener testified before Congress in favor of it, and you don’t send a top executive to do that if you don’t mean it.

Why would Amazon support the company having to collect taxes, therefore raising the bottom line that the consumer pays at the time of purchase (but not the bottom line overall for that consumer, if they properly pay their use taxes later)? Isn’t it more expensive for them? Doesn’t it cut into a competitive advantage?

Yes and yes.

However, if it doesn”t happen federally, then states start passing all kinds of “Amazon laws”, that have different rules and different processes. That’s more expensive.

Amazon already collects sales taxes in a lot of places (the state of Washington, of course, but also a lot of places outside the USA), and has repeatedly said that it doesn’t significantly hurt them.

What they don’t want is to have to do it a whole bunch of different ways.

That suggests that equal collection is inevitable in some form or another, so Amazon is trying to get it into the best form for them.

Now, I need to say that this amendment doesn’t make it law. There is a law under consideration called the

Marketplace Fairness Act

and a vote will likely come on that fairly soon.

Will it pass?

Well, the amendment passed handily, 75 to 24…bilateral support.

It’s being sold by some groups as making a “level playing field” for brick and mortar stores and e-tailers, but of course it doesn’t. It’s still more convenient to shop online, for example, and it’s still possible to get something in a brick and mortar store more quickly (although not by much).

One of the reasons it has support?

Money.

Remember, this is money that taxpayers should already (according to the law) be paying. If they start paying it, that will put more money in state coffers, which in turn makes things easier on the feds.

For the Congresspeople who are staunchly against new taxes, this is not a new tax. No one will owe an additional penny in taxes, as I understand it…it’s just that (I would guess the vast majority of) taxpayers will pay more taxes.

It’s not going to save main street. As a former retailer (including having been a bookstore manager), I’ve written about that many times, too. You have to make the buying experience such that your customers are willing to pay more money than they would online. You can not sell in a brick and mortar more cheaply than you can online and make a profit. You have literal overhead, and more payroll per sale, and shoplifting losses in a way quite different from an e-tailer. You have to appeal on other bases, and then you’ll survive…and thrive.

As you can imagine, there has been some coverage of this…although I think the issue has been going on for long  enough that the sharpness of any protests have dulled.

I think that this

Forbes article

gets it right, but this

cnet article

doesn’t make it clear. They say, for example, that “The U.S. Senate voted overwhelmingly today to endorse levying Internet sales taxes on American shoppers…” Dictionary.com says in their definition (which I am briefly excerpting):

“verb (used with object)

5. to impose (a tax): to levy a duty on imports.”

They are not imposing a tax: they are changing the point in the cycle at which an existing tax is collected, and changing who has to do the collection and submission from the consumer to the seller.

If the MFA (Marketplace Fairness Act) passes, how will affect you?

It probably won’t affect you on e-books delivered electronically, unless your state already has a tax on those. Oh, it’s worth saying…why don’t they tax those? Remember that what you buy is a license to read the book, which is like a contract…you aren’t buying a physical object. Generally contracts are not subject to sales tax.

It might affect you when you purchased an EBR (E-Book Reader), tablet, or accessory from Amazon. Again, it wouldn’t add sales tax, but you would have the sales tax collected at the time of sale.

I think it’s probably pretty obvious here that I’d like to see this passed…it would simplify my life. However, I would be interested to hear what you think about it, particularly if you think it should not be passed (and why). Feel free to let me and my readers know your thoughts by commenting on this post.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

The Guardian: Amazon overholding on VAT for UK publishers?

The Guardian: Amazon overholding on VAT for UK publishers?

I think this

Guardian article

will have a negative impact on Amazon’s perception by the public in the UK, even though the issue is a bit mathy and wonky.

In the USA, we have sales taxes and “use taxes”, when it comes to purchasing e-books from Amazon. The basic idea is that either there is a tax on the sale of an item, or, if you buy it from outside your state and then bring it in and use it there, the state may charge you a tax for using it.

It’s very inconsistent, with different states (and counties, and even cities in some cases), charging different rates…I’ve heard that there are over 8,000 tax jurisdictions.

Still, the idea is the same: the actual sale of the product within your state is taxed, or your use of it is.

Not all states tax e-books delivered electronically, though, sort of the same idea as not taxing a contract.

In Europe, Australia, and other places, there isn’t a sales tax…there is a Value Added Tax (VAT).

The idea there is that you are taxed when the value of something is increased. Just making up numbers, let’s say a tree is worth $100. You chop it down, turn it into lumber (let’s say ten boards), and it’s worth $250. You would be taxed on that $150 difference.  Now, one of those $25 boards is turned into a table that sells for $100. The company that did that would owe tax on the additional $75 value. That’s the basic idea.

I’m honestly not very familiar with the European implementation of that idea. I know when I visited Australia, the price on the menu or on the price tag was the price I paid: there was nothing visually added to what I paid in the form of a tax. That was quite some time ago, though, and I’m not sure it’s the same in Europe.

I do know, though, that there are different rates of VAT in different countries, and that VAT impacts the consumer prices of e-books paid by customers.

In the USA, the amount of sales tax collected at the time of sale depends on where the customer is located (based on the customer’s account). I’m in California, and we aren’t taxed on e-books delivered electronically, so the price I see is the price I pay. In other states, it might be 5%, 8%, and so on.

According to the Guardian article, the UK VAT rate is 20%…and the Luxembourg VAT rate is 3%.

Here’s the thing.

Again, according to that Guardian article, Amazon withholds 20% from the money it pays a UK publisher to cover that VAT. Let’s say that the list price of the e-book is $10. Maybe Amazon would normally pay them $5, but they only pay them $3 (so they have the other $2 to give to the government in the UK).

On the surface, that makes sense. In the USA, Amazon collects the money from the customer and sends it to the state, but again, that’s a sales tax, not VAT.

However…

The article says that Amazon only pays the government the Luxembourg rate of 3%, because that’s where they are based.

If, and that’s a very big if to me, that’s the case…what happens to the other 17%?

Now, I don’t understand the mechanics of this enough. If a UK customer buys something from a Luxembourg seller over the internet, does the VAT happen in Luxembourg, or in the UK (the latter being what would happen in the USA traditionally)?

The article by Ian Griffiths and Dan Milmo (which I recommend) has a lot more to say about Amazon’s dominance in the market. It suggests that there are situations where UK publishers might get only 10% of the consumer purchase price on an e-book sold by Amazon.

Now, movie theatres in the USA can run into that same situation with blockbuster movies…you pay $8 at the box office, and the theatre gets eighty cents of that. However, they can make it up with that $5 box of popcorn.

I don’t know how influential this article will be with the public, but regardless of  how the mechanics actually play out, it’s quite negative about Amazon.

If you have insight on how VAT works in Europe, I’d love it if you comment on this post for me and my readers. Would what Amazon is alleged to have done be unfair? Would Amazon actually pay that 20% to the UK, even though they are based in Luxembourg? Do you just have an opinion about this? Feel free to let me know.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

Amazon to start collecting sales tax in California on September 15

Amazon to start collecting sales tax in California on September 15

I’ve written pretty extensively about the issue of equal collection legislation, where out-of-state retailers (including internet) collect sales tax at the time of sale, the same way the brick and mortar stores do. Amazon will start doing that for California customers a week from Saturday on September 15, 2012.

L.A. Times article

I’m looking forward to it.

That will seem counter-intuitive to some people, but it’s important to note that we are not going to be charged any more tax…the question is how does it get paid.

In California, we are supposed to be paying a “use tax” (equivalent to a sales tax) on out-of-state purchases on our annual state taxes. We do that in our family, and it’s a bear. We have to figure out what we bought, whether or not we  already paid taxes, and whether or not it is a taxable item in California. Then, we pay a not inconsiderable lump sum. Can you imagine doing that with everything you bought from the local store?

The problem all along has been that many people don’t do that, and California doesn’t have the resources to go after them.

In this situation, no one will owe more taxes, but many people will pay more taxes.

This does add expense for Amazon, but they already collect sales tax on many sales, so they have a mechanism in place.

Will this hurt Amazon’s sales?

I don’t really think it will all that much. I know they’ve said that it hasn’t significantly hurt them in other markets where they collect the sales tax/VAT (Value Added Tax) for their customers.

In fact, there are a lot of sites encouraging people to buy a lot right now, to avoid the tax collection…presumably, that advice is for people who haven’t been meeting their tax obligations up to this point.

That bump may help Amazon in the short run.

What do you think?

Note: I believe we don’t pay sales tax on e-books delivered electronically in California, so this doesn’t impact Kindle book purchases.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

Chris Christie supports equal collection

Chris Christie supports equal collection

I’ve written before about the issue of equal collection legislation.

The basic idea is that many residents of states don’t pay the use tax that they usually owe when they purchase items from out of state sellers.

It’s different with in-state sellers (such as your chain brick-and-mortar stores, or “Mom and Pop” stores). Those stores can be compelled by the state to collect sales tax at the time of sale.

Most people, I think, perceive this as meaning that you don’t have to pay sales tax on out-of-state purchases from places like Amazon, even though that’s not what it means. Oh, I suppose you don’t “have” to pay it, but you owe it in the same way that you owe income tax.

Different states have tried different ways to redefine things with so-called “Amazon laws”.

Amazon itself supports a national sales tax policy (not a national sales tax). They want all internet retailers to have to collect the sales tax at the time of sale. Why would they want that, when it presumably gives them a competitive advantage not to have to do it?

For one thing, they don’t want to be singled out. If they collect sales tax, other online retailers should have to collect sales tax the same way.

This has also been perceived as something Republicans would support less than Democrats. It is additional regulation on businesses: it may be perceived (again incorrectly) as raising taxes (rather than as changing the collection method).

That’s why it’s big news that Chris Christie, a leading light Republican, has supported equal collection:

Wall Street Journal article

Christie doing it may lead to other Republican governors supporting it.

However, it’s important to note that this is a deal between New Jersey and Amazon…it isn’t Federal regulation.

I also want to point out that there are people who think that having equal collection policies (however they are achieved) will right a wrong and allow brick-and-mortars to compete more fairly with online retailers.

I’ve said before (as a former bookstore manager); brick-and-mortars can’t compete with the internet on selection. I don’t think they can compete with it on prices (even with sales tax collection). Online retailers can charge for shipping, but I do think it is more efficient to be an online retailer in many cases. One big issue? No shoplifting. Yes, you’ll still have employee theft, but shoplifting is a much bigger issue than you think.

It will “level the playing field” a bit, though.

I’ll go back to my basic principle: people will shop in a brick-and-mortar, paying higher prices, having the inconvenience and expense of driving there, and having the smaller selection…because they like the people who work in/own the store and want to support them.

That’s the trick. I know, I know…it’s easier said than done.

“Another romantic lunacy.  We assume that a personality problem can be liquidated merely through an understanding of it – as though a man could lift a mountain once he admitted it was heavy.  No: recognition is not synonymous with solution.  I fly toward freedom as a moth toward the candle, and nothing so insubstantial as Reason will turn me aside.”
–Dr. Charles “Doc Bedside” Bedecker
Chthon
written by Piers Anthony

While this is a very tough time to get anything passed at the Federal level, I could see how, if all the states had already required equal collection, the Feds would then step in to unify it.

States have a significant motivation to make this happen (they need the money), and Amazon has a significant motivation to guide the process so the impact affects them and their competitors evenly.

Are the days of no tax collection on internet sales numbered? Not numbered, I think…but an end seems likely.

Oh, I should mention (despite that being a good exit line) that most of the proposals I’ve seen for this have minimum sales thresholds. If  you sold your old bicycle on eBay, you might not be required to collect sales tax (the buyer would still pay use tax, I think). If you sold a thousand old bicycles, that might be different. Think of it selling just a few items like having a garage sale, in terms of enforcement.

What do you think? Will there be a national policy mandating collection of applicable sales tax on out-of-state internet purchases? Would that violate the interstate commerce clause? Does it matter for this issue which party wins the Presidential election? Is the current situation unfair? Feel free to let me and my readers know by commenting on this post.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

E-books and your annual taxes

E-books and your annual taxes

April 15th* is traditionally the day when our annual income taxes are due to the federal government in the USA.

Many of us also pay state income taxes by that day.

One of my readers and regular commenters, Lady Galaxy, suggested that I do a post about how e-books play into that…so here it is.

I had helped Lady Galaxy with a question regarding them, which sparked this.

Let me start out by saying clearly: I am not a tax attorney or adviser or an accountant. If you have any questions about this, consult with a tax professional and/or your appropriate tax authority.

For those of you outside the USA, you may still find this interesting. We don’t do VAT (Value Added Tax), for example.

Oh, and each state does things differently as well. Even smaller jurisdictions (such as counties and cities) may be involved.

One other thing: I’m talking in this post about how your purchases of e-books may impact your annual taxes, not money you might have earned from them.

Okay, all of that said, let me start out by telling you a bit about what we did in my family.

We live in California.

California, like many states, has provisions for residents to pay “use tax” on items that they bought outside of California, but used in California.

The use tax rate is the same as the sales tax rate.

My process?

I go back through our internet purchases for the year. I have to look at each one, to see if we already paid sales tax (if we did, we don’t have to pay it again).

The tricky part is knowing whether an item is taxable or not.

Not everything you buy in California is subject to sales tax.

Honestly, I don’t always know…when in doubt, I pay it. I remember hearing once that more people overpay their taxes that underpay them, and that makes sense to me.

Now, you might be wondering at this point…how would California know I bought, oh, floss from Amazon?

They don’t.

If I don’t report it to them, it’s not like there’s a W-2 on it.

If I got audited, though (knock virtual wood), and they found I had purchases where I should have paid and didn’t, I could be in trouble.

Here’s a key thing, and this is what helped Lady Galaxy (even though I think she’s in a different state).

E-books delivered electronically are not subject to sales or use tax in California.

I don’t have to pay use tax on my Kindle book purchases.

The Board of Equalization says:

“ Sales and use tax applies to the sale or use of tangible personal property in California. Section 6016 of the Revenue and Taxation Code defines tangible personal property as “personal property which may be seen, weighed, measured, felt, or touched, or which is in any other manner perceptible to the senses.”

http://www.boe.ca.gov/sutax/faqusetax.htm#6

Just to make sure, I specifically asked them about use tax on e-books…again, they confirmed that delivered electronically, they aren’t subject to use tax. If I bought e-books on a CD, those would be subject.

Stressing again, check with your state and/or a tax professional.

My guess is that you’ll find that many states don’t charge use tax for e-books delivered electronically.

By the way, we ended up paying over $200 in a lump sum.

I’ve written pretty extensively before about “Amazon laws”, which are trying to compel internet retailers to collect sales tax at the point of sale, just like brick-and-mortar stores do.

Amazon supports a national policy on that…and so do I.

It would certainly make me doing our taxes easier.

I wouldn’t be paying any more taxes than I do…I just wouldn’t be responsible for figuring out how much they are, and I would pay them as the year went along, rather than all at once.

I don’t know that anything can get through the US Congress right now…but maybe after the Presidential election.

It would be a tough sell, though…it would end up in many people paying more taxes, even though people wouldn’t owe more taxes.

Well, if you are already paying use tax, what I hope you get out of this post is that you check to see if owe it on e-books before paying it.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

Amazon’s Paul Misener testifies before Congress on Equal Collection Legislation

Amazon’s Paul Misener testifies before Congress on Equal Collection Legislation

I’ve written extensively before about sales tax and Amazon.

Briefly summing up, some states have passed laws redefining what constitutes a “nexus” in their states. By doing so, they can declare that Amazon is doing business in their states, and can therefore by compelled to collect sales tax at the time of sale, in the same way that a brick and mortar store can be compelled to do that.

These laws have varied from state to state, and Amazon has changed how they did business in some states to stay outside the new definition.

Amazon has also supported a federal sales tax policy…not, to be very clear, a Federal sales tax. A federal sales tax policy would define at a national level what constitutes a nexus. The result would be that internet retailers would collect tax at the time of sale. That’s tax that has already been owed to states…you are usually supposed to report it on your annual state taxes, and it is often called a “use tax” at that point.

Believe it or not, that’s the simple version.

In a

press release 

today, Amazon gives us the text of a statement made by the retailer’s Vice-President Paul Misener in front of the House Judiciary Committee.

It’s fascinating stuff…I highly recommend you read it.

Two of the interesting points are: Misener arguing for a low exemption value; and Misener calling out eBay for their objection to Equal Collection legislation.

The first one is one of the tricky points. Should someone who only sells one ten dollar item on eBay have to collect sales tax?

Well, the answer seems to me to be…sure, if they can do it reasonably. The software is there, and Misener suggests that eBay could do it easily enough for their sellers…and that Amazon would do it for their Marketplace sellers.

I haven’t had a chance to view any testimony yet, and there should be a question and answer session as part of this.

Will Equal Collection legislation pass?

It’s hard to say that any legislation will pass right now.

However, it would greatly benefit states. I’m sure many states have millions of dollars owed to them that isn’t being collected.

Senators represent states…it helps them politically to help their states.

They are, of course, elected by individuals…individuals who may not like it when more sales tax is collected (even if no more sales tax is owed than was before).

I’ll keep my eye on it…

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

Equal Collection bill introduced in Senate: Amazon supports it

Equal Collection bill introduced in Senate: Amazon supports it

A bill is being introduced by a bipartisan group of Senators to establish a Federal policy that will allow states to compel internet retailers to collect sales tax for sales into their states.

Amazon put out this

press release

expressing their strong support for the bill.

I’ve written quite a bit about Amazon and sales tax before.

Amazon is supporting a Federal policy on sales tax.

Now, I have to be very careful to say this clearly, although I’m thinking most of my readers know it.

This is not a policy for a Federal sales tax. It would not mean that people owe a new tax.

It has to do with having internet retailers making sales into a state collecting the sales tax (just as a brick and mortar store does) and submitting it to the state.

It might seem odd that Amazon would support something that would mean that the total people see when they buy taxable items from Amazon would be higher.

I think they see that as inevitable…what they don’t want is to have to fight fifty different states about whether they have to do it or not, and how.

The bill seems relatively simple and clear. You can read it here (it won’t take long):

http://enzi.senate.gov/uploads/marketplacebill.pdf

Here are a couple of interesting sections:

Each Member State under the Streamlined Sales 
8 and Use Tax Agreement is authorized to require all sellers 
9 not qualifying for a small seller exception to collect and 
10 remit sales and use taxes with respect to remote sales 
11 sourced to that Member State pursuant to the provisions 
12 of the Streamlined Sales and Use Tax Agreement.
===
(c) SMALL SELLER EXCEPTION.—A State shall be 
16 authorized to require a remote seller, or a single or con-
17 solidated provider acting on behalf of a remote seller, to 
18 collect sales or use tax under this Act if the remote seller 
19 has gross annual receipts in total remote sales in the 
20 United States in the preceding calendar year exceeding 
21 $500,000
===
(d) NO NEW TAXES.—Nothing in this Act shall be 
8 construed as encouraging a State to impose sales and use 
9 taxes on any goods or services not subject to taxation prior 
10 to the date of the enactment of this Act.

===

Is the bill going to pass?

Is any bill going to pass?

I’ve talked about this a lot already, so I’ll let the comments argue the sides.

I’ll say this…if you want to contact your Senator pro or con, you can do that here:

http://www.senate.gov/general/contact_information/senators_cfm.cfm

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

California is back in business!

California is back in business!

NOTE: I had to go back and considerably rewrite this. That sometimes makes it a bit choppy…my apologies in advance.

Woo hoo!

Amazon has reinstated the Amazon Associates program in California.

Associates can start helping California with its economic woes again.

For those of you who haven’t been following this, here is a brief summary:

Amazon Associates are paid advertising fees when someone clicks on a special link created by the Associate, and then goes to Amazon and buys something.

Associates are, I think, typically individuals and some organizations.

California passed what is called in slang an “Amazon law”. That compels Amazon to collect sales tax for sales into a state, based on a new definition of what constitutes a “nexus” (a physical presence in a state that changes the sales from interstate commerce, regulated by the Federal government, to a state sale, regulated by the state government).

That redefinition in several states has included the presence of Associates in that state.

So, one response by Amazon is to drop the Associates program in those states.

In the case of California, it got pretty messy, with Amazon starting (or at least backing) a state initiative to overturn the law.

California and Amazon have worked out a compromise, which gives Amazon about a year to help get a national sales tax policy (not a national sales tax) passed. If that doesn’t happen, Amazon agrees to start collecting sales in the state.

So, having Associates in California no longer hurts Amazon…it goes back to helping them, as it always has (by producing more sales). Whichever way a national effort goes, it won’t hurt Amazon.

That pretty much brings you up to date.

If you were a California Amazon Associate, you should be getting an e-mail.

While it is too bad for the Associates that didn’t have it reinstated by…oh, say, September 28 for the announcement of the new members of the Kindle family, it is nice that the old links still work. If people go back to old posts of a blog that has those links, those will work again…the Associates don’t have to go back and change them to something new.

What if you are a customer: how does this affect you?

That’s one of the good things. There is no difference for a customer at all. The price of the product is the same.

It’s a great way to support somebody or some organization you like. If you buy by clicking through their links, they get a reward for that from Amazon. You don’t even have t buy the product they described. That’s why a lot of non-profits do it…it’s a painless way to raise revenue.

I’ve always made most of my money on this blog through the Kindle store subscriptions (thanks, subscribers!). I’m proud of that…it says that there are people who think this is worth roughly three cents a day.

If you aren’t an Associate but are interested in being one, it’s pretty easy. You do need a website (a blog is fine), and you need to have a way for them to pay you. There’s more to it than that, but those are two of the main elements. You can start here:

https://affiliate-program.amazon.com/

 “Bufo Calvin is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.”

This post by Bufo Calvin appeared in the I Love My Kindle blog. 

Governor Brown signs California/Amazon sales tax compromise

Governor Brown signs California/Amazon sales tax compromise

Governor Jerry Brown of California has signed a compromise with Amazon regarding compelling the Seattle-based company to collect California sales tax.

http://gov.ca.gov/news.php?id=17232

It’s a remarkable development, and one which was not at all certain to occur.

I’ve written about this previously, but this makes it official.

Amazon is dropping a petition drive to overturn California’s “Amazon law” which would have compelled it to collect California sales tax at the time of sale for sales going into California (on products which would have been taxable there if sold in a store…not on e-books).

Amazon also agrees to bring ten thousand jobs to California, and there is talk of them opening fulfillment centers in the state.

What did Amazon get in exchange?

The internet retailer does not have to collect sales tax in California…until September 15, 2012.

That gives time for a national sales tax policy (such as the “Main Street Fairness Act”) to get passed, which would override California’s law.

What does this mean for former Amazon Associates in California (which includes me)?

After all, Amazon dropped the program (through Amazon pays advertising fees to individuals and organizations that use special hyperlinks to direct buyers to Amazon) in California in response to the law California had passed…which is now suspended. My guess is that they’ll restart the program…and soon. Whether a federal law is passed or not, the presence of Associates in California after September 15, 2012 makes no difference. I should say, “Most likely.” The Main Street Fairness Act might not pass, and something else might. I doubt anything else will make advertisers into a “nexus” that forces a company to collect sales tax. If nothing passes, Amazon has to collect sales tax anyway.

The Associates are a good thing for Amazon: we drive business their way. The Associates are also a good thing for California, in my opinion: we pay income tax on those fees.  The argument against it is that people buy online from Amazon rather than buying the same thing in California…and then that they don’t pay their “use taxes” on their annual taxes, which is what they hypothetically should be doing.

However, it would be hard to demonstrate that people wouldn’t just go ahead and buy online, even with tax collection.

So, I’m guessing we’ll see the Associates program restored by Monday.

There is also a rumor out there that Amazon is going to announce the AmTab (Amazon Tablet…that’s just my slang for it) on Wednesday. They’ve called a press conference in New York for that day, according to online stories:

GadgetBox MSNBC article

Having the Associates back up and running for the launch of the AmTab would make a difference, I believe, in the early sales. Obviously, I’d be favorably affected by that personally, but I don’t think that’s swaying my speculation too much.

My best guess: California Associates restored by Monday, AmTab announced on Wednesday…and I get one quickly and tell you about it.

Amazon could also be announcing something else, but the timing seems about right.

What do you think about Governor Brown signing? What do you think will happen with a national sales tax policy? Is the AmTab going to be announced Wednesday? Feel free to let me know.

This post by Bufo Calvin appeared in the I Love My Kindle blog.