CA Amazon Tax - Asking for any Help

22 replies
i don't post on here very much anymore as i have been focusing entirely actually working on my Amazon associates business. i am really beginning to see results of my efforts but today i found out my business could be close to instant death if the Amazon Tax Law is passed in California.

this would be absolutely devastating to my business. i cannot just move to a state unaffected because my day job keeps me here. believe me, if i could i would.

i am asking anyone for any real tips to get around having my Amazon Associates account closed. any help will be greatly appreciated. this has been my pride and joy for the past 6 months. i don't want to lose it because of this newly about to be passed law.
#amazon #tax
  • Profile picture of the author MatthewNeer
    Hey Red,

    Sorry to hear about that man. I've been keeping my ear to the ground as well and have heard TONS about the Amazon Tax Law about to be passed in CA.

    What I don't understand is how that would shut your business down overnight? Sure it might tax you a portion of your income but I dont see how that would kill your business? You would just be making a little bit less profit right?

    With that said, maybe you can open a business license in Nevada or something because tax laws are much lighter over there. Maybe it will be worth looking into for you...
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    • Profile picture of the author myob
      This will affect over 10,000 Amazon affiliates in California, and Amazon of course has already demonsrated that they will immediately dump affiliates when the law passes. It's certainly no big secret about their intentions in California. I've been an affiliate since 1996 and built it into a very comfy 5-6 figure monthly income. But just as Amazon has to make tough business decisions, affected affiliates are also faced with making some changes.

      Some affiliates may move, others may incorporate in other states, and many perhaps will join other affiliate programs. There may be additional suggestions offered here, but the uncertainty looming in planning for the lucrative holiday season is forcing our hands to make changes very soon. Personally, all of my links are being swapped for similar products in other affiliate programs. Cya, Amazon; it's been a nice ride.
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    • Profile picture of the author ARVolund
      No, not talking about income tax...

      Amazon will be dropping all affiliates in Ca because the state wants them to start collecting sales tax. Just did the same thing in my state I am dropped as of Jul 24.


      Really you do not have all that many choices. Find another company, try telling them you moved, or create a corp or LLC in another state.

      I can not imagine trying to use a fake address will work very well, I am sure a lot of people will try it but I would think they would want to see some paperwork.




      Originally Posted by MatthewNeer View Post

      Hey Red,

      Sorry to hear about that man. I've been keeping my ear to the ground as well and have heard TONS about the Amazon Tax Law about to be passed in CA.

      What I don't understand is how that would shut your business down overnight? Sure it might tax you a portion of your income but I dont see how that would kill your business? You would just be making a little bit less profit right?

      With that said, maybe you can open a business license in Nevada or something because tax laws are much lighter over there. Maybe it will be worth looking into for you...
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      • Profile picture of the author redstanford
        thanks for the replies guys. any more ideas?

        someone mentioned switching to similar companies. wouldn't they ditch their affiliates like Amazon and Overstock are doing?
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        • Profile picture of the author myob
          Many of the smaller competitors are wooing the Amazon orphans such as Walmart, Best Buy, Target, Barnes & Noble, etc. These stores already are collecting online sales taxes in every applicable state because they have a physical presence in those states. There are also thousands of specialty manufacturers and resellers within California that pay high affiliate commissions. We in California actually have lots more options than others.
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          • Profile picture of the author Dave90210
            Ok what are those options?


            Originally Posted by myob View Post

            Many of the smaller competitors are wooing the Amazon orphans such as Walmart, Best Buy, Target, Barnes & Noble, etc. These stores already are collecting online sales taxes in every applicable state because they have a physical presence in those states. There are also thousands of specialty manufacturers and resellers within California that pay high affiliate commissions. We in California actually have lots more options than others.
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            • Profile picture of the author myob
              Originally Posted by Dave90210 View Post

              Ok what are those options?
              Apply as an affiliate for Walmart, Best Buy, Target, Barnes & Noble, etc. You can also apply as a direct affiliate for publishers, resellers, manufacturers that are advertising in these stores. Linkshare and Shareasale have hundreds to choose from. Also do a search in google for "affiliate your niche". There are millions of these coming up for the dozens of major niches that I market in. Amazon may be more convenient, but they're not the only game in town.
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              • Profile picture of the author Dave90210
                Which alternative do you recommend that you can trust. I want to promote electronics which affiliate program has the highest commissions and is trustworthy?

                Originally Posted by myob View Post

                Apply as an affiliate for Walmart, Best Buy, Target, Barnes & Noble, etc. You can also apply as a direct affiliate for publishers, resellers, manufacturers that are advertising in these stores. Linkshare and Shareasale have hundreds to choose from. Also do a search in google for "affiliate your niche". There are millions of these coming up for the dozens of major niches that I market in. Amazon may be more convenient, but they're not the only game in town.
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                • Profile picture of the author myob
                  Originally Posted by Dave90210 View Post

                  Which alternative do you recommend that you can trust. I want to promote electronics which affiliate program has the highest commissions and is trustworthy?
                  For consumer electronics I don't know anything specific beyond what I've already suggested. That niche is the lowest of the low for paying commissions; 1-4% is typical for all the affiliate programs that I'm aware of.
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                  • Profile picture of the author redstanford
                    i wish it was as easy as registering a mailing address in another state
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  • Profile picture of the author webapex
    Amazon also owns properties in CA they will have to dump, have top wonder if they are hoping the affiliate threat will get 10,000 extra letters written to congress. I heard mention of another CA bill that would would more directly effect affiliate?

    Wyoming, Montana & New Mexico may be less costly than Nevada for LLCs
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  • Profile picture of the author serena85
    And now to be honest it is a well deserved tax because you are creating an income. And all that is listed as an income most be taxed.
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    • Profile picture of the author AnniePot
      Get an address in another state. These two services could probably help you:

      Regus USA

      Mail Forwarding with UsaForwarding.com | US Mail Forwarder | US Mailing Address | Forward Mailing Address | How to get a USA Mailing Address | Mail Forwarders

      I have no affiliation with either company.

      EDIT: Also, open an online bank account with a bank such as ING Direct. This won't point to you as living in California.
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      • Profile picture of the author Dave90210
        Ok that's fine and dandy but what if someone from California buys something from affiliate link? Does that mean you don't get credit for that sell when the new law passes because they had to collect tax off that item?

        Originally Posted by AnniePot View Post

        Get an address in another state. These two services could probably help you:

        Regus USA

        Mail Forwarding with UsaForwarding.com | US Mail Forwarder | US Mailing Address | Forward Mailing Address | How to get a USA Mailing Address | Mail Forwarders

        I have no affiliation with either company.

        EDIT: Also, open an online bank account with a bank such as ING Direct. This won't point to you as living in California.
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        • Profile picture of the author kindsvater
          Originally Posted by Dave90210 View Post

          but what if someone from California buys something from affiliate link? Does that mean you don't get credit for that sell when the new law passes because they had to collect tax off that item?
          Getting credit for an affiliate commission is not based on whether Amazon has to collect a sales tax. But whether you are eligible to be an affiliate is.

          Here is a scenario:

          If an Oregon affiliate refers a California resident to purchase from Washington based Amazon, then

          - The Oregon affiliate still gets their commission.

          - Amazon does not owe sales tax simply because a California resident is the buyer (although Amazon has other issues to consider by having California subsidiaries)

          - The California resident owes a use tax, which no one pays.

          .
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      • Profile picture of the author redstanford
        Originally Posted by AnniePot View Post

        Get an address in another state. These two services could probably help you:

        Regus USA

        Mail Forwarding with UsaForwarding.com | US Mail Forwarder | US Mailing Address | Forward Mailing Address | How to get a USA Mailing Address | Mail Forwarders

        I have no affiliation with either company.

        EDIT: Also, open an online bank account with a bank such as ING Direct. This won't point to you as living in California.
        is this legal? feasible?

        this was honestly the 1st thought that came to my mind yesterday but i didnt think it was legal. also wouldn't that mean you open the door to having to pay which ever state you choose taxes on top of the state you actually live in?
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        • Profile picture of the author Kay King
          Of course it's not legal - and it's why you don't take legal advice from forums.

          MYOB is right - you move the home of your business entity to another state legally or you change affiliate programs. Get legal advice in your state and set up your business accordingly.
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        • Profile picture of the author AnniePot
          Originally Posted by redstanford View Post

          is this legal? feasible?

          this was honestly the 1st thought that came to my mind yesterday but i didnt think it was legal. also wouldn't that mean you open the door to having to pay which ever state you choose taxes on top of the state you actually live in?
          It's perfectly legal. Choose a state such as Texas that has no state income taxes. Also, they have already considered implementing the tax changes as CA, etc. and it was thrown out.
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  • Profile picture of the author weblink29
    I just read that Amazon is closing warehouses in certain states over this:
    Amazon CEO: State tax demands violate Constitution

    This is from the Amazon.com website:
    Amazon.com Help: Sales Tax
    Items sold by Amazon.com LLC, or its subsidiaries, and shipped to destinations in the states of Kansas, Kentucky, New York, North Dakota, or Washington are subject to tax.

    I live in NY myself. It looks like they already collect sales tax in NY State. I would assume this won't effect states that Amazon is already charging sales tax in. At least they haven't moved to Mexico yet like so many other companies.
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  • Profile picture of the author txconx
    I don't understand how dropping affiliates helps Amazon.

    The tax is for ALL online sales to anyone in California, regardless of a company's presence in the state. Amazon will have to collect/pay sales tax on sales to anyone in the state of California. In order to avoid this tax, they'd have to drop affiliates AND refuse to sell goods to anyone in California. I don't see that happening.

    I'm hoping that if they have to collect sales tax on all sales in the state, they'll retain their affiliates in the state.
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    • Profile picture of the author weblink29
      Originally Posted by txconx View Post

      I don't understand how dropping affiliates helps Amazon.

      The tax is for ALL online sales to anyone in California, regardless of a company's presence in the state. Amazon will have to collect/pay sales tax on sales to anyone in the state of California. In order to avoid this tax, they'd have to drop affiliates AND refuse to sell goods to anyone in California. I don't see that happening.

      I'm hoping that if they have to collect sales tax on all sales in the state, they'll retain their affiliates in the state.
      I believe the state is going after tax because they consider affiliates "employees" of Amazon and therefore are entitled to taxes. If Amazon drops the affiliates in the states they no longer have "employees" in the state and therefore no tax is due.
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      Nothing to see here folks.....move along.

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      • Profile picture of the author txconx
        Originally Posted by weblink29 View Post

        I believe the state is going after tax because they consider affiliates "employees" of Amazon and therefore are entitled to taxes. If Amazon drops the affiliates in the states they no longer have "employees" in the state and therefore no tax is due.
        No, the tax has nothing to do with employment; it's about sales tax.

        Aside from that, there's no way affiliates can be defined as employees. They are clearly independent contractors.
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