Yesterday evening @MattEnders, a North Carolina based colleague of mine, tweeted:
The page links this this article on MyNC.com. where Enders’ anti-tax points are juxtaposed to those of Senator Hoyle, co-chair of the Senate Finance Committee and proponent of the North Carolina affiliate tax. The article says that the “sales tax from Amazon.com alone could run as much as $13 million a year”. It could but will it? The answer is negative. So Amazon will pull out. What about Overstock.com that the article also mentions? Based on the New York precedent, the answer is also negative.
The article ends with this paragraph:
Senator Hoyle said while he sympathizes with small business owners, he believes on-line retailers aren’t willing to give up the revenue, even if it means paying tax.
Recalling the New York State experience, hundreds of online retailers will “give up the revenue”, and in addition to Amazon and Overstock we’re also talking such major brands from the Internet Retailer’s Top 500 List as CaféPress.com, CSN Stores, Gaiam, Home Shopping Network, Jewelry Television, Karmaloop, Lamps Plus, Musician’s Friend, NetShops, Northern Tool + Equipment Co., OnlineShoes.com, Oriental Trading, ReStockIt.com, ShopNBC.com, ShoppersChoice.com; and this is only to mention the larger brands. See this thread for a fuller list of merchants that dropped affiliates after a similar law passed in the state of New York.
As someone has commented under the above-quoted article “7% of zero” is “still zero” and “that’s what NC will get in taxes”. I believe, the actual number is 4.5%, but that doesn’t change the main point of this statement. Such a law will not yield the desired results, but what it will definitely do is destroy thousands of smaller businesses along the way.