Top Story – Carolina Confusion



When North Carolina became the third state to adopt the “Amazon tax” last summer the result was  an immediate termination of in-state affiliates by e-commerce companies across the board.  This has led the State of North Carolina to interpret the “modernization” of its sales tax language to be only a clarification of existing law and to immediately send notices to companies that terminated affiliates to pay up for back taxes as far back as 2003.   This “non-major change” was included by the state in a list of major tax changes for 2009 and is projected to generate the equivalent of a 1.5% increase in corporate taxes.  Try convincing the Chamber of Commerce that a 1.5% tax increase is a mere clarification,

Having applied the hammer, the state is now trying the carrot by granting amnesty for back taxes to ecommerce companies who participate in their Internet Transactions Resolution Program and agree to collect taxes going forward.

The state’s enforcement efforts have gained national attention, as their pursuit of sales records from has triggered a major First Amendment battle.

ACLU Asks Court To Declare Amazon Records Confidential, Daily Online Examiner.