No, this isn’t the beginning of a terrifying Stephen King novel–though Mr. King, who resides in Maine and sells books through Amazon, has undoubtedly heard the news. Rather, Maine is the latest state to feel the sting from Amazon.com’s displeasure with affiliate nexus laws.
New York was the first state to require remote vendors to collect sales tax if in-state affiliates made a certain amount of sales in a given period of time. When Overstock.com heard the news back in 2008, it severed its relationship with New York affiliates and took the state to court. Amazon joined the lawsuit while maintaining affiliate relationships in the Empire State. Earlier this year, New York’s Court of Appeals ruled in favor of the state. Now both Amazon and Overstock would like the Supreme Court to hear the case.
Maine Governor Paul LePage (R) signed LD 346 (HP 251) into law back in June. Under An Act Concerning the Collection of Sales Tax by Any Businesses Making Sales to Persons in Maine, “A seller is presumed to be engaged in the business of selling tangible personal property or taxable services for use in this State if an affiliated person has a substantial physical presence in this State or if any person, other than a person acting in its capacity as a common carrier, that has a substantial physical presence in this State:
- Sells a similar line of products as the seller;
- Maintains an office or other facility in the State to facilitate delivery of property or services sold to seller’s customers;
- Uses trademarks, etc, similar to or the same as those used by the seller;
- Delivers or installs or provides maintenance services for seller’s customers;
- Facilitates seller’s delivery to in-state customers; or
- Conducts any activities in the State that are significantly associated with the seller’s ability to establish and maintain a market in the state.
Maine’s new affiliate nexus law is similar to other such laws (see an interactive map of states with Amazon Tax laws). Amazon’s response in Maine is similar to its response in other states. And so the dance continues.
Amazon’s letter informing Maine affiliates that it is terminating the relationship, effective October 6, 2013, reads in part:
“While we oppose this unconstitutional state legislation, we strongly support the federal Marketplace Fairness Act now pending before Congress. Congressional legislation is the only way to create a simplified, constitutional framework to resolve interstate sales tax issues and it would allow us to re-open our Associates program to Maine residents.”
How does your business handle sales tax changes?