Why can't Californians lie about where they live to Amazon?

https://news.ycombinator.com/item?id=2720727

by phirephly • 15 years ago

7 5 15 years ago

news.ycombinator.com

What's legally keeping us from giving Amazon a Nevada PO Box number and filing a Nevada tax return on just what we earn through the Amazon Affiliate program?

gregjor• 15 years ago

tax fraud

phirephly• 15 years ago

So what? Do I incorporate in Nevada? I can't believe there's no way around this.

djloche• 15 years ago

Form a business in a state that does business with amazon legally. Then do contracting work for said business.

Talk to your lawyer/accountant and make it work. Plenty of people have done this from the start.

staunch• 15 years ago

IANAL. There's absolutely nothing illegal about being a CA-based affiliate of Amazon. Amazon simply doesn't allow it anymore. If you're CA based and you trick Amazon into letting you be an affiliate that might cause problem between you and Amazon.

They might accuse you of fraud and/or of violating their Terms of Service or something. Most likely they'd kick you out of the program and possibly go after the money you earned.

You would not be in violation of any state of federal tax laws. The new laws only apply to stores themselves.

My guess is that it would be legal to setup an out of state LLC that was owned by your CA C-Corp/individual and let that company be the affiliate. Again, worst case is you violated your agreement with Amazon, not any tax laws.

philiphodgen• 15 years ago

1. Set up a real corporation outside of California.

2. Get a real business license and everything a real business does.

3. Report all income scrupulously to the IRS.

4. The Franchise Tax Board will take the position that your non-California corporation is doing business in California. You will be required to jump through all of the Secretary of State and State tax hoops. If you don't you have a very expensive learning experience waiting for you.

Note that last item. You now have a Nevada (for instance) corporation fully engaged in business in California. You ran around in a circle for nothing.

And of course you have a Nevada corporation fully engaged in business as far as the Franchise Tax Board is concerned. Which means as far as the State of California is concerned they have the Holy Grail -- an Amazon affiliate doing business in California.

Amazon may not be amused.

Keep it simple. If your Amazon affiliate business is so profitable, go rent a cheap house in Las Vegas and live there. You'll be bulletproof. If your Amazon affiliate business is marginally profitable you're going to spend all of your money on lawyers and accountants.

Why can't Californians lie about where they live to Amazon?

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