Becoming an Amazon Affiliate

13 years ago

Here's where a major problem with this scheme comes in: If you earn over $600 you will be sent a 1099 and you will need to report that as income. If you give your brother's name and SS he will need to report the earnings on his taxes. Have you figured out a way to make that work out?

Amazon does not pay by PayPal, it pays by direct deposit or check or in Amazon gift cards. I believe (and someone please correct me if I'm wrong) direct deposit only requires a $10 payout whereas a mailed check requires a $100 payout.

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dvhantiques

13 years ago

Yes I see what you mean. I'd probably have to discuss it further with my brother and have him put aside a certain amount to pay tax on anything above $600.00. Also, I'm not sure if the @ would put him in a higher tax bracket himself. So I would have to talk to him about this. I guess I wasn't expecting to make that much, as I'd be adding the amazon products to my micro niche sites.
Thanks for the insight.
Deb

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fitz10 13 years ago

If you earned under $600 I don't see a problem. You and your brother could either open a joint account or you could have the checks mailed to him.

Another viable solution would be to form a corporation in a non-Nexus state (Delaware or Nevada are probably your best bet). However, I'd only do that if you anticipate making a substantial income from Amazon.
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cashcow

13 years ago

There's a whole host of other problems with this too.

Since (I assume) you would be claiming all your business deductions now against your other income then your brother will have to pay taxes from his highest tax bracket on that money (yes and including the first $600 - its only that you dont get a 1099 if you dont make more than $600 but you are supposed to pay taxes on it all). Could be more than you would pay if you were folding it all into your business.

What if your brother gets audited and the audit uncovers that he's not really the person earning the money? What if you only earn $500 and no 1099 is sent and you use your brother to recieve the money - could he get into trouble somewhere down the line during some other sort of audit?

Probably the best bet is to consult an accountant/attorney and find out what the best resolution is for you (like maybe just forming a corporation in another state).

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dvhantiques

13 years ago

Yes I see what you are saying. If I go this route, I will consult an attorney.
Thanks,
Deb

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areoo

13 years ago

Hey just wondering where is nc. can u explain what is nexus law?? lol sorry

i know im not helpin but just so curious

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myob 13 years ago

The nexus law does not affect non-US residents. Basically, in states that collect sales tax they are requiring Amazon to collect these sales taxes from affiliate sales. Amazon is contesting the legal rational that affiliates are considered to be a "presence" in these states. Rather than paying state sales taxes, Amazon has canceled affiliate relationships in affected states, including North Carolina (NC).
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dvhantiques

13 years ago

Sure, NC is North Carolina. Basically what I'm referring to is tax affiliate laws. In the past two years, state governments wants Amazon (and others) to pay taxes on sales so they can collect revenue. Some of the states affected so far are NC, RI, AR, CO .....there are others but I can't think of them now. I know CA had it in their legislature. Amazon does not want to have to do the record keeping for this, so if you live in a state where the law was passed you cannot be an Amazon affiliate. Alot of affiliate companies are following along, for example, I can't be an affiliate of CJ. You can always google nexus laws to find out the most recent. Unfortunately, the states are gaining momentum.
Deb

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myob

13 years ago

Originally Posted by dvhantiques

... Unfortunately, the states are gaining momentum.
Deb

It's not really gaining momentum. Right now, there are efforts underway for example in North Carolina and Rhode Island to repeal the affiliate nexus law due to some hard lessons learned there. Legislatures are realizing this was a big boo boo, resulting in the secondary consequence of lost revenue from affiliate income tax base. Amazon also threated to pull out of Texas where they have a huge number of affiliates and a regional distribution center, so the governor intervened saying "This is a big mistake". The Texas legislature is frantically rewriting the laws to keep Amazon from leaving. I'm watching this closely myself because this is coming down to the wire in California, which has a very large number of Amazon affiliates. A great debate is going on that the loss in state income tax revenue from such a large tax base would be far greater than any gains in sales tax.

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Lisa RRB

13 years ago

Originally Posted by myob

It's not really gaining momentum. Right now, there are efforts underway for example in North Carolina and Rhode Island to repeal the affiliate nexus law due to some hard lessons learned there. Legislatures are realizing this was a big boo boo, resulting in the secondary consequence of lost revenue from affiliate income tax base. Amazon also threated to pull out of Texas where they have a huge number of affiliates and a regional distribution center, so the governor intervened saying "This is a big mistake". The Texas legislature is frantically rewriting the laws to keep Amazon from leaving. I'm watching this closely myself because this is coming down to the wire in California, which has a very large number of Amazon affiliates. A great debate is going on that the loss in state income tax revenue from such a large tax base would be far greater than any gains in sales tax.

I really think it was that regional distribution center that made them change their tune for Texas. As it stands we do not have state income tax here in Texas. California is a whole different story though. It will be interesting to see how that plays out in California.

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myob 13 years ago

Texas, however, does have a sales tax, and Amazon actually successfully "bluffed" the legislature by threatening not only to cancel all affiliate ties but also to close down the distribution center. The economic contributions of affiliates as well as the regional distribution center to the local economy would have been a double whammy if those were lost. You guys are safe.

I think for California, our legislature is watching the economic disaster this was in North Carolina and Rhode Island. But, it does appear some never will learn until they try it. I understand the Connecticut nexus law will take effect on July 1, and Vermont is coming up next. Amazon affiliates have their own plans.
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- JRCarson 13 years ago
  
  I personally have a full time income with Amazon Associates and I live in Colorado (Coloradans were dropped by Amazon in March of last year).
  
  We had a company set up (tax ID # to enter in Amazon account) in another state and links swapped out within 2 hours.
  
  Taxes took a little longer this year, but it was very, very much worth it. I was worried we would get "double taxed", but you don't pay more taxes, you just have to have a good accountant that helps you through it (not hard at all for them).
  
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dominodivine

13 years ago

If you are serious I would recommend forming a corporation in another state but as a disclaimer: I recommend you talk to your accountant or lawyer on how to approach this.

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pflyers

13 years ago

There is a big time affiliate, Jerry West who I think also lives in NC. He made a post about this which I think will help you. He had the same problem and found a solution.

Amazon Affiliate Tax Solution

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JRCarson

13 years ago

Originally Posted by pflyers

There is a big time affiliate, Jerry West who I think also lives in NC. He made a post about this which I think will help you. He had the same problem and found a solution.

Amazon Affiliate Tax Solution

Good God...that is the worst solution I have ever seen for this situation. Please stop sending that link around.

Amazon is going to call you and check the weather in your state? What?! If that happened just tell them you set up another company in another state and now run the affiliate sales through that company! There's nothing wrong with that! Go to LegalZoom.com and see how a huge part of their company is setting up corporations in other states for people.

IRS red flags??? If you don't declare your taxes in the state you set the company up in, then yes, you may raise some red flags.

Secondly, (thirdly? fourthly?) I make a full-time living with Amazon Associates and I have NEVER received a phone call from them.

Notice that Jerry's video hinges on a phone answering/mail forwarding service that is....gasp....$200 per month??! Hmmm, have an interest in that Jerry?

Because, as we all know as internet marketers, it's the paper mail and phone calls that won't stop coming in!!

Sorry...but that video was disgusting.

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aperture 12 years ago

Dear JR,
I hope you and yours are all safe in Denver.
I would be grateful for YOUR OPINION - I have an LLC out of state with an EIN. I live in a state with tax laws that are not going to work for affiliate marketing. I talked to my CPA and was explaining to him that I need to use the LLC for my business venture. I will be filing a schedule C on my personal taxes. The CPA wasn't really sure if I would need to pay sales tax where I live! Obviously, I will pay state income tax on any monies I make, where I am a resident. The state where I have registered the LLC does not have a state income tax.
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aperture 12 years ago

Sorry JR - turns out I must have 50 posts before I can pm you with a question!
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dvhantiques

13 years ago

Thanks for all your responses. I was aware of Jerry West's video. I will have to make some $ first with adsense so I can afford the out of state answering service.

Hopefully, this will get repealed in NC.
Deb

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simonbuzz

Banned 13 years ago

I don't think you should use others mailing address...because in the future you will face some problems...

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riorio

13 years ago

Get a corporation and have them pay the corp. Then write everything off. Or have brother setup the corp and pay the corp..then pay yourself personally out of the corporation as a write off as well.

Originally Posted by dvhantiques

Hi,
I wanted to become an amazon affiliate, but I live in NC and because of the "nexus laws" they don't accept anyone from NC. However, I have a brother in NY and was thinking of signing up with his address. But I do have a couple of questions:
1. Can I just sign up in my name on my computer and just use his mailing address? Or do I have to sign up in my brother's name?
2. Will they ask for a ss#? If so , I will use my brother's.
I just want to be prepared and was wondering what questions they will ask when I sign up?
3. Does amazon mail a check to your mailing address? Or do you have to use paypal? This concerns me because my paypal has my personal info, including address.
Anyway, thanks to anyone who can help me with this or has done it before.
Deb

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cryst

13 years ago

@arushi u can start working on amazon... its free to join but u need to pick good products which u gana work to promote those product.....

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Becoming an Amazon Affiliate

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