[CPABulletTrey]

Really, when the IRS comes, just go to Florida for a few days, and then get arrested like Wesley Snipes

: )

[MeeMaw]

I am still not clear why people don't want to pay taxes when it's the law. If you are making money, and have lots of taxes to pay, that's because you are making money.

Yea, it's a pain to keep track, but no different than having another type of business.

[net4biz]

You are all missing the FACTS: Corporations under the law are NOT you. They are basically a separate individual that when you pay the fees and get your charter, you as an individual are not liable personally.

If you incorporate in Nevada and you have an address there and run all your business thru that address, you can live anywhere. Nevada will not tell anyone who is who or where they live who are shareholders.

So if you are a Nevada corporation and your corporation gets approved as an affiliate for Amazon, YOU do not have to pay the sales tax IF someone in North Carolina buys
something, but Amazon is liable for the tax. The idea of the Nexus law is to force either the affiliate or the merchant to pay up.

You are not doing business in NC, but Amazon is doing business there because they sold something there. The loophole for you is basically this charge for advertising.

To do this trick you need TWO corporations: One in Nevada and one where you live.
Your local corporation charges your Nevada corporation to advertise for Amazon.

Say you charge your Nevada corporation $10/1,000 to spin an Amazon widget or product page. Your local corporation has a web page get traffic and your Nevada
corporation pays you with their corporate check the $300 and receives the Amazon commission. You solved the problem.

However, it will cost you $500 per year minimum for a Nevada Corporation when you count state fees, representative agent and web hosting. Plus depending on where you live you local corporation will cost you more than that ... probably at least $1,000, not counting lawyer fees and accounting fees.

So you have to make more than $2,000 plus whatever the other fees and stuff cost
before you breakeven from being an Amazon affiliate and this is not counting the $3,600 your Nevada corporation is paying you for advertising.

Lot's of hassles or maybe not ...depends on how much money you make going in.
You can figure costs of at least $500 a month just to be in the game. But if you are advertising on your local site for two or three others, you should have NO problem with any tax agency. Obviously you will have to fill out TWO tax returns plus you personal return. But, you can always go to Vegas for your Nevada corporations annual meeting and write off the trip as a business expense.

The reason tax laws are like they are is so people can get around them using tricks
which puts more money in the pockets of lawyers and accountants who are for the most part our elected officials ... and it's the NUMBER ONE reason we don't just have
a FLAT tax. Tax law is always written for big money people to avoid the taxes. No one really cares about Joe public because Joe Public does not even care about themselves.

[Rich Owings]

Talk to a sales & use tax attorney before implementing any "solution." You do not want Amazon to hold you liable for all taxes they should have collected in NC should nexus be established because of you and your interpretation of the law.

[Kevin]

Originally Posted by Rich Owings

Talk to a sales & use tax attorney before implementing any "solution." You do not want Amazon to hold you liable for all taxes they should have collected in NC should nexus be established because of you and your interpretation of the law.

^ This.

[MichaelColey]

Moderator Note: This seems to come up pretty regularly, so I'm making it a sticky thread.

[Hereandthere]

Thanks for doing that, Michael, and thanks for mentioning this thread over in the Colorado thread.

Any follow up would be most welcome, from chrisk or anyone.

[Kevin]

Hereandthere: I would simply add that our attorney in New York told us that as long as I live in New York, I could be incorporated on the moon and we still would create a nexus in New York.

Consult your attorney (and I assume you have one), but trust me. State of incorporation makes no difference in these Nexus cases.

[Hereandthere]

Originally Posted by Kevin

Consult your attorney (and I assume you have one), but trust me. State of incorporation makes no difference in these Nexus cases.

Have an attorney? A small town one who did my will a while back... but will keep my ears open for a good tax one.

[nsusa]

Originally Posted by Kevin

Hereandthere: I would simply add that our attorney in New York told us that as long as I live in New York, I could be incorporated on the moon and we still would create a nexus in New York.

That's a pretty long commute, dude

I have yet to talk to a tax attorney, but I assume I will get the same answer as you did. However, and I guess that is a question for a lawyer - is Colorado different because of the Nexus piece removed from the bill? Just wondering ...

[delsol]

Originally Posted by nsusa

That's a pretty long commute, dude

I have yet to talk to a tax attorney, but I assume I will get the same answer as you did. However, and I guess that is a question for a lawyer - is Colorado different because of the Nexus piece removed from the bill? Just wondering ...

nsusa (ken?) this question is very different for Colorado since their is no nexus to establish. Stores have to collect or help collect sales taxes PERIOD.

This issue becomes a "private" issue between the affiliate, his company and the merchant. It will depend on a case by case basis on how the merchant declares his desire to "avoid" Colorado affiliates.

Sorry for being redundant for the one's that "get it". With or without affiliates (from Colorado or elsewhere) this new Colorado law applies to all merchant (with $100,000+ in Colorado sales, if my memory serves me correctly)

I think one of the better perspective/summary on this issue is from Mark (post #9) here:
Information for merchants dropping affiliates out of ignorance...

[Jmf421]

I think everyone is on different pages with this topic and there might be some confusion. The law states that the merchant must collect tax in the state where the affiliate resides. So amazon.com who would normally not have to charge tax in NC because there is no physical location in NC; would now have to collect sales tax for purchases if I were an affiliate and directing traffic to their site while collecting a commission.

I am not having to pay a tax as the affiliate in NC but the retailer is dropping me so that they do not have to charge tax in NC. My loss is the relationship with Amazon or whatever retailer this is effecting. I wouldn't mind paying a tax on the money I am making but sometimes the retailers that some affiliates work with fill a specific niche and losing them isn't easy to replace in some cases.

[stremayne]

I have sympathy for U.S affiliates and merchants.

My company is about to start an affiliate program, but I believe we will be free from any tax consequences in the U.S.

The company is registered as an offshore corporation in England (so it is tax free there) and run from Panama (where foreign income is tax free).

Is it likely we could be held liable for U.S tax?