It's All Over for Minnesota Amazon Affiliates

Profile picture of the author Tom Ryan by Tom Ryan Posted: 06/18/2013
Just got the email from Amazon this morning that because of the recent tax legislation that just passed MN amazon associate accounts will be terminated as of June 30th.

Yup, that pretty much stinks. I have a number of sites that use amazon. My one main site that I build a list in also using Amazon quite extensively because they have all the products that my subscribers use.

I guess I'm going to have to figure out what my option are from here.
#affiliates #amazon #minnesota

  • Profile picture of the author flipfire
    flipfire
    Could you not create a LLC or a company based in a city that accepts amazon affiliates and then paid through the company?

    I'm not actually sure how it works over in the US, i'm sure some other warriors will give a bit more of an explanation on setting up a company.

    Regards,

    Lee
  • Profile picture of the author Marc Rodill
    Marc Rodill
    Without knowing more, I see two options. You could sell digital products to them. That depends on your market of course. If they don't buy those types of products, you can try pitching them and see what happens and how they respond. Will require salesmanship.

    Also, while you may not be able to be an affiliate, you could acquire the products yourself and sell them as a vendor from Amazon. The good news is you'll make more money. The bad news is you'll have to manage inventory and acquisition costs, returns, etc. Depends on your budget and desire to go down that path obviously but it can be scaled. But I'm pretty sure Amazon will do a lot of the legwork on fulfillment for you.

    There are other options out there of course, but those come to mind.

    Marc

    PS. Like flipfire said, you could create a Nevada corporation that holds your LLC then you and Amazon will be taxed according to that state. There are several other states too that will give you a level of privacy similar to Nevada too. Leave it up to the government and taxes to ruin a good thing.
  • Profile picture of the author Daniel Elss
    Daniel Elss
    "We are writing from the Amazon Associates Program to notify you that your Associates account will be closed and your Amazon Services LLC Associates Program Operating Agreement will be terminated effective June 30, 2013. This is a direct result of the unconstitutional Minnesota state tax collection legislation passed by the state legislature and signed by Governor Dayton on May 23, 2013, with an effective date of July 1, 2013. As a result, we will no longer pay any advertising fees for customers referred to an Amazon Site after June 30 nor will we accept new applications for the Associates Program from Minnesota residents"
  • Profile picture of the author CurtisSWN
    CurtisSWN
    Dayton is a rich liberal idiot, of course, buying his way into office with Dayton-Hudson-Target wealth. But it's just another way for the middle class to pay for the super-rich lifestyles.
  • Profile picture of the author chow
    chow
    Just got the email too. I have so many sites that are running on the amazon associates program. This sucks!
  • Profile picture of the author JSProjects
    JSProjects
    Seems to be happening fairly frequently. I agree with flipfire and would look at creating a LLC somewhere.
  • Profile picture of the author Mandi
    Mandi
    You could try finding sponsors through Commission Junction advertising your niche products as an alternative and push your traffic to their store instead. A lot of CJ sponsors pay a higher commission rate than Amazon, and if your content is good enough to convert browsers to buyers, you won't need the power of Amazon to help you finish the sale.

    Another alternative is skimlinks.com - I haven't used them before, but from what I understand, you can convert your Amazon links to skimlinks and get a flat 6% commission on your Amazon product sales without having to change too much on your site. This is a bonus for small sellers who don't reach the 7-30 products shipped tiered Amazon commission structure in the first place to boost commissions, but it'd be a bit of a reduction in your profits otherwise. However IMO, 6% is better than 0%. So the benefit here is sending your traffic to the same place as before, but getting your commission check from another source for the same sales.

    Regards,
    Amanda
  • Profile picture of the author wesawu
    wesawu
    No need to worry. Set up a single member LLC in a state that is Amazon friendly and open a bank account in that state. You will also need an office address in that state also. You can open a PO Box in that state and then use the USPS forwarding service for a few months, at least until you get the Amazon Key in the mail. You can then notify Amazon of the new LLC and address and have them reinstate your account. All payments will go to your out state bank account. You can then write yourself a check from that account! Of course you will have to file state tax returns in whichever state you start the LLC. As long as you are the only member in the LLC, you don't have to file a separate federal tax return for the LLC since all income/expense flows thru to your ss#.
  • Profile picture of the author Lori Kelly
    Lori Kelly
    Wow that stinks.

    Nevada is a good state to set up an LLC. There's no state income tax in that state so no state tax return is filed. A tax return for the LLC is filed on the federal level and then your personal return filed, you will claim any earnings from your LLC on your personal return.

    I don't know about forming LLCs or corporations in other states, but I was registered agent in Nevada for over a decade. You can do the filing on your own (online) and that will save you money.

    You will need a registered agent in Nevada, find one that also offers the business address and mail forwarding. There are many agents who will also help you set up a bank account so you won't even have to leave the comfort of your own home.

    It will take a while, but at least you can get back in the game.

    Good luck and again, sorry to hear about this. It's like someone punches you in the gut.
  • Profile picture of the author RogueOne
    RogueOne
    Just to be fair, there is more to this email:

    While we oppose this unconstitutional state legislation, we strongly support the federal Marketplace Fairness Act now pending before Congress. Congressional legislation is the only way to create a simplified, constitutional framework to resolve interstate sales tax issues and it would allow us to re-open our Associates program to Minnesota residents.


    We thank you for being part of the Amazon Associates Program, and look forward to re-opening our program when Congress passes the Marketplace Fairness Act.
  • Profile picture of the author Tom Ryan
    Tom Ryan
    While I'm not absolutely killing it with Amazon, I am still contemplating forming an llc in another state. I might wait to see how sales ramp up as my sites grow before I do that, which leads me to the other option...

    In the meantime I may very well use a site like skimlinks or viglink, which will share the commissions.

    So, all is not lost, there are options.
  • Profile picture of the author Kay Elliott
    Kay Elliott
    Just received my email from Amazon. I saw a previous comment in this thread about selling digital products instead. Good suggestion, but that won't work either. MN's new sales tax law includes digital products. See Star Tribune article: Ringtones, digital books, business repairs will soon be taxed in Minn. _ with a few catches | StarTribune.com

    They also just passed a gift tax law (second state to have one). The law excludes spouses giving gifts to each other. (Wasn't that thoughtful?) The gift tax also excluded political contributions. (Even more thoughtful.)

    I love Minnesota, but it may be time to move.
  • Profile picture of the author GforceSage
    GforceSage
    Any friends or relatives in other states that could help get you set up there?

    Once it appears that you are operating from a different locale, you can keep rolling.
  • Profile picture of the author teresarothaar
    teresarothaar
    If you want to set up a corporation, look to set it up in Delaware. This state is very corporate-friendly. Additionally, there is no sales tax here.
  • Profile picture of the author schnisz
    schnisz
    Yep, same thing happened to us in California. I had myself all set up with an out of state relative when the state came to an agreement and everything was restored. for now. Hope that happens for you guys. Mobilize!!
  • Profile picture of the author seobro
    seobro
    Well, move from Minneapolis to Indianapolis as houses are inexpensive. Also, it is warmer. Indiana is a right to work pro business state that is not going away. This is one solution for you. Frankly, I do like amazon. However, I do not like their affiliates program.
  • Profile picture of the author midwestmedia
    midwestmedia
    Originally Posted by schnisz View Post
    Yep, same thing happened to us in California. I had myself all set up with an out of state relative when the state came to an agreement and everything was restored. for now. Hope that happens for you guys. Mobilize!!
    How exactly did that all shake out? What was used as the reason to restore everything?

    I'm in Minnesota and can probably expect to be dropped from other programs too now, correct? I've been checking for emails from other companies/networks but so far, I think Amazon is the first to officially drop me.
  • Profile picture of the author Kay Elliott
    Kay Elliott
    Here's another issue. A few weeks ago I called MN Dept. of Revenue to ask about the new sales tax laws and if online sales would be MN 6.875% sales tax or if local taxes would be included. If local taxes were included, how was the location to be determined if digital (address of credit cards, etc.). The person at the Dept. of Revenue said she didn't know. I said the deadline was the end of the month and businesses would need time to set up the systems to collect the correct tax. She said the Dept. of Revenue hadn't heard from the MN Legislature yet and a statement from them was to be issued June 13th. I said that only allows 17 days for a business to figure out how to be compliant. She said it was a problem for them also. It is now June 18th and no word yet from the MN Legislature. It makes it very difficult for a business (including Amazon) to be compliant with MN laws when no one knows exactly what the laws are and within an impossible timeframe.
  • Profile picture of the author OnlineStoreHelp
    OnlineStoreHelp
    Unfortunately this is just Amazon.com posturing. They want the marketplace fairness act passed as it gives them a huge competitive advantage over just about any other seller, regardless of what their PR pieces are telling you. Now they will use this to lobby congress of, "oh look how this hurts stay at home moms trying to make a little money". Bunk.

    As for setting up a Nevada LLC and trying to run it through there... don't. While there is no "corporate income tax" starting an LLC or corp in Nevada is cost prohibitive now, with a $350 a year business license you need to file now, as well as your typical $99 registered agent fee. Your bank will not allow you to use a PO Box as your address (Patriot Act and KYC rules) which means you will need to use your home address (which Amazon will pick up) or your registered agent which will charge you for every forwarded mail you want to send.

    Add on top of this, even if your business is "based" in Nevada, you still have nexus in Minnesota and your corporation or LLC will still have to file income tax filings in Minnesota. You don't want to run afoul of the state revenue department and guess what happens when Amazon finds out. Back at square 1.

    When it is all said and done, many online businesses are starting to register in Wyoming or South Dakota which also has lax filing requirements and no "corporate income taxes".

    Your best bet, is to move away from Amazon and find affiliates that you can point people towards from networks such as CJ, Linkshare, Avantlink and Share-a-sale, etc. You might find it is better for you income wise since most tend to pay out better than Amazon with much longer cookies. This could be a blessing in disguise. The other thing to check out is if Skimlinks will let you open an account to use Amazon in your state.
  • Profile picture of the author ratracegrad
    ratracegrad
    Well another option would be to sell your Amazon affiliate websites that are making money to others - like me. Just PM me your website and what price you are asking and what revenue you have earned in the past year and let's talk.

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