Web retailers, states tussle over tax rules

In a big break for online shoppers, web retailers generally don’t have to charge sales taxes in states where they lack a store or some other physical presence. But increasingly, states aching under the weight of the recession are seeking a way around that rule, reports the Associated Press — an effort that could have large implications for state education budgets. Because companies such as Amazon.com Inc. get help drumming up sales from online affiliates–people who link to products on their blogs, promote web shopping deals, and offer coupons–several states say the internet retailers should charge sales taxes in states where those affiliates are based. The financial benefits might not be quite what the states anticipate, though. Rather than gearing up to collect taxes, Amazon and other web retailers are simply shutting down their affiliate marketing programs. As the small businesses that participate in these programs get cut off, a state could lose tax revenue rather than add to it…

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