Amazon CEO Jeff Bezos on the so called affiliate tax or amazon tax


Interviewer1: On another front you know, nobody
likes taxes. And when we threw out questions, we asked our readers, “What would you like
to ask the CEO of Amazon?” One question that repeatedly came up was that you know,
why should Amazon.com not have to collect state sales taxes? Don’t you think it gives
them an unfair advantage? Now, how would you respond to people who have this concern? Jeff Bezos: Well you know, I’d give you
a couple of these. First of all, most of where we do business – Europe, Japan, some of
the states here in the United States – we collect sales tax. So more than half of our
business, we do collect sales tax for the European equivalent – the value added tax.
It is… and then in the US, the Constitution, prohibits states from interfering in interstate
commerce. And then there was a Supreme Court case decades ago that clarified that businesses…
it was mail order at that time because the internet did not exist – the mail order
companies could not be required to collect sales tax in states where they didn’t have
what’s called nexus. And it’s a very clear decision. Our point of view on this is that
we should simplify the sales tax system and we’ve been consistent on this for probably
10 years. It’s called the Streamline Sales Tax Initiative. I think 22 or 23 states have
signed on to it because the right place to fix this is with federal legislation. That’s
where it can be fixed properly. The sales tax collection is very complicated and you
know, we’re no different from you know, big chains of retailers. They don’t collect
sales tax in states where they don’t have nexus either. So it’s not… everybody is
following the same rules and I don’t think our customers would say, “Why don’t you
guys just optionally collect the tax? I know you’re not required to do it but go ahead.” Interviewer2: And the blogger question is,
“Are you going to be dropping states for the affiliate program? For the states that
have the tax.” Jeff Bezos: We will continue to drop states
who passed those affiliate laws from the affiliate program and the big affiliates pick up and
move when that happens which we’re grateful for. It is you know, such as us because you
know, people who make money through affiliate programs usually Amazon is just a piece of
their business. They’re usually doing a bunch of affiliate programs and they all get
affected by these new laws. So it makes sense for them to do something different.

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