First of all I would like to say thank you for writing this article. As you may have noticed this issue has been getting much more press recently since amazon did end up preemptively dropping all of it’s NC affiliates. Still this remains the most well informed and insightful article about the issue and the only I have come across that actually links to the legislation in question.

I run a few, currently very small, websites and initially I was appalled to be loosing my affiliate status with amazon. I rushed to blame my lawmakers as is my habit, but after reading you article I have a much better understanding of the complexities of the situation and can really sympathize with all sides of the issue.

Thanks to your links I have spent the afternoon pouring over the related legal documents I could find. I have very minimal legal training, as I am a computer scientist by trade, but also I am very accustomed to reading very dense papers of other scientist and the even more esoteric tomes of antiquated source code so in-comparison tax law was not too particularity difficult to follow.

I agree with you that obviously the solution is to simplify the multiple state taxes through federal legislation, or at least through federal law provide a clarification of what exactly constitutes “substantial nexus.”

I is my humble opinion that affiliates within the sate do not. The reason I feel this way is because, while the affiliates may live in NC I find it unlikely, at least generally, that they are targeting a NC audience with their advertising. So in that sense affiliate advertising should be considered as a common carrier like the mail system.

With the advent of amazon pulling out of NC I really think this could do more damage than good. I think the estimates of $13 million in revenue are a bit inflated. But even if true that money will do little to benefit the NC population as a whole when compared to the utter devastation it is going rep on many NC webpreneurs. It is may opinion that even giving 13 million to schools is deplorable if it unjustly costs even one family their livelihood.

For a retail operation, traditionally, the company only had to collect and report sales tax if it had a physical location within the state or used direct mail/catalogs or TV/radio ads to target NC customers. Otherwise, the purchaser (individual) is supposed to report and pay use tax on the online or mail order purchase.

The unfair playing field is between someone like Target with retail locations in NC and someone like Overstock.com without these facilities. Overstock does not have to collect/charge sales tax, which makes its products cheaper here.

Business purchasers generally are better at self-reporting “remote” or “mail-order” purchases because most of these purchases are listed on tax returns as deductions, and it is fairly easy to see where the expenditure was made and if the seller collected sales tax.

Many commissioned sales agents are not selling retail products, and the changes to the law are specifically for retail products.

These questions are extremely fact-specific and hard to answer based on generalities.

I ask because it seems to me that, by becoming a paid (by commission) associate for Amazon is roughly akin to being a paid (by commission) sales representative. If this law puts the virtual “sales rep” on the same tax footing as the physical “sales rep,” why should it be wrong to do so?

The presence of affiliates in NC means, the state argues, that Amazon can be compelled to collect sales taxes on products delivered into NC. This means that if I go directly to the Amazon site and buy something, I will be charged sales tax becuase of the presence of affiliates (which did not take any part in the transaction) within the state. Likewise, if I go to a website based in Oregon and click on a link to buy the fishing pole that is being reviewed, and that dumps me to Amazon, Amazon will need to collect sales tax from me (becuase it has affiliates in NC).

The Court has made clear that while due process is about the affect on the individual, the commerce clause is about the impact on the national economy. In effect, NC can pass a law that leads me not to patronize a website in another state (opting instead to purchase my fishing pole through a company that does not have affiliates in NC). I think that this is where the law fails, at least under current jurisprudence.

The Court in Quill (and particularly Justice Scalia in his concurring opinion) noted that the doctrine of stare decisis has “special force” in situations where Congress is free to act in contravention of the Court’s reading of current law. Congress can act to give effect to laws such as the one being considered here, but in the absence of Congressional action, I do not think the tax withstands commerce clause jurisprudence.