When considering a lower tax rate we can make one of two assumptions. We can assume that changes to taxes rate will not change behavior, or we can assume that changes to tax rates do change behavior.
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Legislators in Louisiana are considering a click-through nexus law. Commonly known as "Amazon" laws after their most visible target, these laws deem an out-of-state company to be an in-state company for sales tax collection purposes if the company receives commissioned referrals from in-state resident "affiliates." The out-of-state company must then collect sales tax for the state. While a number of states have considered "Amazon" laws in the past four years, only five have enacted them (Connecticut, Illinois, New York, North Carolina, and Rhode Island) and they have been unsuccessful and ruled unconstitutional.
Our Special Report on Amazon tax laws explains why they expand state taxing authority in a manner likely to invite extended litigation, and that in every state, they have failed in their twin objectives of collecting additional revenue and creating a level playing field between brick-and-mortar and remote sellers. Sponsors have promised revenue windfalls follow enactment of an Amazon tax, but no windfalls have been forthcoming so far. This is often because online companies respond to Amazon tax law enactments by ending their affiliate programs. In-state persons who earn income from referring potential customers lose that income source.
"Amazon" tax laws such as the one Louisiana is currently considering are poor tax policy and likely unconstitutional. Some possible amendments to obviate these flaws include:
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29 Democratic members of Congress from California today urged California to make its film tax credit more generous. A bill to do so, AB 1839, has passed the state Assembly and is pending in the Senate.