Did you get an email from Intuit saying that “Your QuickBooks tax invoice is available!” and having no idea what the heck they are talking about? If you are wondering why the hell you are receiving a tax invoice from Quickbooks, here’s the deal.
This week, with no announcement or fanfare, Amazon quietly started charging sales tax on orders being shipped to Colorado, making Colorado one of 28 states for which Amazon collects sales tax. Amazon charges tax for orders shipped to Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, North Carolina, North Dakota, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington, West Virginia, and Wisconsin.
As tax time looms, the IRS has set forth rules about whether they will treat (and so you should treat) Bitcoins and other virtual currency as, well, currency, or property, for tax purposes. The short answer is that the IRS will treat virtual currency such as Bitcoin as property for tax purposes. Here is a more full explanation.
Amazon has decided to tackle states that are adopting Internet sales taxes head on, by underwriting and spearheading a referendum to have the newest Internet sales tax, that in California, repealed.
California is the newest state to pass a law taxing sales at companies like Amazon when those sales are generated by a local (in this case California-based) affiliate or associate. And, not unexpectedly, about five minutes after California Governor Jerry Brown signed the legislation, California becames the newest state to have their affiliates dumped by Amazon. As we’ve pondered before, is it arrogance or simple ignorance that is leading these state legislatures to pass laws that, instead of bringing in new taxes, are depriving their state economic engines of taxable spending fuel? Instead of bringing more income into the state, by chasing away the affiliate programs, they are depriving their own residents of income – income which would come back to the local economy.
The city of Philadelphia has taken that age-old pastime – trying to get blood out of a stone – to a new high tech high: trying to get money out of a hobby blogger. Philadelphia may be the ‘city of brotherly love’, but it’s certainly not the city of bloggerly love, especially not with Philadelphia charging bloggers what amounts to a $300 blogging tax. Oh sure, Philadelphia officials call it a “business privilege license”, but when you require it of someone who hasn’t monetized their blog at all, well, that’s not much of a business model, is it? Of course, it’s a dandy business model for Philadelphia, right up there with states charging an affiliate sales tax.
With ever more states either passing or contemplating passing an Internet affiliate program sales tax, the two edges of that particular sword are being felt from coast-to-coast, as associates are being slashed from the lucrative affiliate programs of some of the largest Internet companies.
Following in New York’s footsteps, North Carolina is set to enact a similar Amazon Affiliate Tax, by which we mean that sales generated by someone in North Carolina via an affiliate program will be taxed (New York enacted an affiliate sales tax last year, over which New York was promptly sued).
The Obama administration has launched a new website at Recovery .gov to provide the American people with greater transparency when it comes to how the government is spending tax revenues. Created under the House American Recovery and Reinvestment Act of 2009 (HARRA), the website will help to provide insight into how the funds being made available by the Federal government for economic recovery are actually being spent.