[cowboysfan]

I'm not a lawyer..and I don't understand the law...but has anyone tried incorporating in another state? ie: say you live in NY, you incorporate in Delaware....would this help avoid the sales tax?

i'm also thinking what if you have a family member that lives in an "amazon tax" free state and you rent a room from them...can you then at least use that address as your business residence? i have a grandmother in puerto rico that will rent me a closet for $50 a month :)

i'm not saying these are ways to go. i'm going to consult a tax attorney..but if anyone has a solution (for the time being) other then moving, please post it here.

[Herb ԿԬ]

after you consult with your tax attorney, post the answer here. but I'll bet if you don't physically move it will be considered fraud. and why move if within a few years the sales tax goes national?

[Kevin]

I'm not a lawyer..and I don't understand the law...but has anyone tried incorporating in another state? ie: say you live in NY, you incorporate in Delaware....would this help avoid the sales tax?

No.

[markwelch]

I'm not sure why people keep asking this same question, over and over, in different threads under the Affiliate Tax discussion. I really don't think the people asking these questions actually intend to do so -- I think the real purpose is to point out how easy it might be to evade the "Amazon Tax" laws, or the consequences of those laws, if someone wanted to do so. Perhaps the goal is to persuade legislators that since enforcement of the law is difficult or implausible, they should not enact the law in the first place.

(1) It does not matter where you incorporate your business. What matters is where you engage in your business activities. You can easily be a "resident" of more than one state, for purposes of certain laws. A corporation is a resident of every state where it has offices, employees, or agents. (Note that the concept of "residency" is not uniform -- for some purposes, the rules may be quite different, and concepts like "jurisdiction" and "nexus" bring incredible complexity and nuance.)

(2) Any kind of "trickery" or deception will properly be viewed as fraud by merchants, who can probably refuse to pay you as a result. (The merchant might also be able to sue you to collect compliance costs and legal fees associated with any "gotcha" sales tax if you turn out to be the land-mine that caused the merchant to be required to collect tax.)

(3) In addition, if you use an address in another state in order to avoid paying taxes yourself (for example, pretending to live at an address in a low-income-tax state, but actually residing in another state), then you can be criminally prosecuted for tax fraud.

Compliance with the law should never be based on "the likelihood of getting caught." Don't rely on trickery or games.

Of course, lots of individuals and companies will probably not obey these laws. Some folks may do so openly, insisting that they will not comply with a state law that violates the U.S. Constitution. Many others will ignore the law, just as millions of Californians currently ignore the "use tax" law.

Yes, this proves that the law is not very reasonable, and it's especially unfair because laws like this create an "honesty tax" -- people who are honest will pay these taxes, but the law really encourages people to be dishonest in order to avoid the tax (in the absence of an increadibly expensive and unpopular RIAA-style punitive-enforcement campaign).

Based on our experience after the New York "Amazon Tax" law was enacted, several hundred companies will take affirmative steps (such as terminating affiliates, or adding the complex certification/paperwork process used by some merchants in response to the New York law) to prevent the law from applying to them.

[cowboysfan]

sorry guys. i looked all over for this information. couldn't seem to find it. thanks for the details mark.