Posts Tagged ‘taxes’

photo credit: Hey Paul

Business Week:

Missing from Washington’s health-reform discussion is a simple change that would make insurance more affordable for millions of the nation’s smallest business owners by letting them fully deduct the cost of their health insurance premiums.

By a quirk in the tax code, self-employed workers who buy their own health insurance essentially pay an extra tax on their premiums. They’re the only taxpayers in the system who pay taxes on premiums, which count as a business expense for corporations and pretax income for employees. Because self-employed workers have no corporate employers to match their payroll tax contributions to Social Security and Medicare, they pay double the rate of wage and salary workers in a levy known as the self-employment tax equal to 15.3% of their net earnings. That’s on top of regular state and federal income taxes, and the income they spend on health premiums is not exempt.

From Business Opportunities Weblog.

Internet Retailer:

Threats by retailers to cut off affiliate marketing relationships in states that are trying to tax sales generated by affiliates have had an effect.

The governors of California and Hawaii have vetoed legislation that would have imposed such taxes in those states.

The governors acted after such major online retailers as Amazon.com Inc., Blue Nile Inc. and Overstock.com Inc. began this week cutting off affiliates in states that adopted laws requiring collection of sales taxes by e-retailers with affiliates in those states.

California Gov. Arnold Schwarzenegger called Overstock CEO and chairman Patrick Byrne to say he was going to veto the sales tax legislation. “We couldn`t be more pleased to have been directly told that the governor is going to focus on balancing the budget via cost cutting and not by jamming consumers and small businesses with new taxes,” Byrne says. “I compliment Governor Schwarzenegger on getting it right.”

Overstock reinstated relationships with its California affiliates following Schwarzenegger’s call, and resumed relations with affiliates in Hawaii today after getting news that Gov. Linda Lingle had vetoed that state’s sales tax law yesterday.

Photo by svilen001.

From Business Opportunities Weblog.

The Wall Street Journal:

Overstock.com Inc. informed its marketing affiliates in four states — California, Hawaii, North Carolina and Rhode Island — that it is ending its business with them to avoid collecting sales tax.

Lawmakers in the states have passed or are preparing to pass legislation that would require companies to collect sales tax if they have marketing affiliates in the state. Affiliate marketers run blogs or Web sites and get a sales commission by featuring links to outside e-commerce sites.

Rival Amazon.com Inc. has taken similar steps in the past few days, ending ties with affiliates in three of the same states and warning about California.

The decision highlights mounting tensions between online retailers and cash-strapped states. Other states are considering similar laws that would use affiliates as a way to force companies to collect sales taxes for online purchases.

Chief Executive Patrick Byrne said Overstock plans to sever its affiliate relationships in each state that appears close to passage of similar laws, but will reinstate its businesses if the laws are found unconstitutional, vetoed or repealed.

Forcing e-commerce sites to collect tax upfront would strip a key advantage they have over traditional retailers, though consumers are technically supposed to pay a so-called use tax for online purchases on their own.

Photo by Overstock.

From Business Opportunities Weblog.