Unless something is done, its over for NC Affiliates

[Cash37]

I had a good time while it lasted. Time to get a job, perhaps.

I'm getting one of these e-mails a day now:

As you may know, the State of North Carolina recently enacted new legislation that addresses tax registration, collection and remittance, which challenges the CafePress affiliate business model.

Due to mounting uncertainly over these new laws we will no longer be able to support affiliates residing in the State of North Carolina, effective July 8, 2009.

While CafePress has no tax nexus in any states other than California, Nevada and Kentucky we feel it wise to discontinue our affiliate business in North Carolina at this time.

Regrettably, our hand was forced into making this difficult business decision, and we openly acknowledge the loss of income this means for our North Carolina affiliate partners. Should circumstances around this law change we will eagerly reconsider this decision.

Effective July 8, 2009 CafePress affiliate agreements with all North Carolina residents will be terminated.

Please let me know if you have any questions.

Sincerely,

Tad Dooling
Affiliate Manager
CafePress
tdooling@cafepress.com
650-655-3052

[RebeccaL]

Time to move to another state/country perhaps?

[Josh Anderson]

Amazon is cutting off all its NC affiliates as well:

http://www.news-record.com/content/2...ith_affiliates

A pretty good article on the issue. In this case Amazon was making the move to avoid liability and send a message to NC before being forced to collect and pay illegal taxes like they are being force to collect and pay in NY.

If the state you are in creates unconstitutional laws just to try and collect more taxes you might be better off moving.

What we really need to hope for is for the Amazon vs NY case to make it to the Supreme court and set some precedent on this and put these unconstitutional moves by money hungry state legislatures to bed once and for all.

[Jagged]

Affiliate markting is definately taking a swift kick in the shins these days...

Moving is not a long term answer....wont be long until all states follow suit....

[Marian Berghes]

Man this sucks, really reconsidering my dream to move to the us if stuff like this keeps happening.

Just gives me a sense of insecurity...today you have an income, tomorrow you don't.

[Josh Anderson]

Originally Posted by Marian Berghes

Man this sucks, really reconsidering my dream to move to the us if stuff like this keeps happening.

Just gives me a sense of insecurity...today you have an income, tomorrow you don't.

The beauty of the US is that you are free to create multiple streams of income so that you do not have all your eggs in one basket. You are also free to move.

If you were running a successful business as an Affiliate and that was your bread and butter the decision would be simple...

Bye Bye NC and hello new home in a state with legislators that adhere to the constitution.

Moving is not a long term answer....wont be long until all states follow suit....

Hopefully not. Its unconstitutional. So if Amazon wins the pending case against New York it could turn the tides.

[GarrieWilson]

Prime example of why people need to know pending laws and bills looking for sponsors/cosponsors so you can stop silly laws like this BEFORE they are passed.

[bgmacaw]

Go to Amazon and send this book as a gift to your looters, err, representatives in the state legislature: Amazon.com: Atlas Shrugged: Ayn Rand: Books

[Marian Berghes]

Still sucks abit tho

And for me its gonna be HARD to move to the US, I got only 2 options: either win the green card lottery or invest $500.000-$1.000.000 in some area of the US that has a bad local economy.

So it is/will be a GIGANTIC decision for me, and I don't wanna mess up

Ontopic: You could either move or try and find other companies that are still offering affiliate programs.

[bgmacaw]

Originally Posted by Marian Berghes

Man this sucks, really reconsidering my dream to move to the us if stuff like this keeps happening.

Unfortunately, we're working hard to become what your country was 30 years ago.

[jacktackett]

Originally Posted by bgmacaw

Go to Amazon and send this book as a gift to your looters, err, representatives in the state legislature: Amazon.com: Atlas Shrugged: Ayn Rand: Books

Sucks big time - I was preparing a blog to host a daily affiliate product - now poof, have to rethink it. Looking to move the business (not my family - I really like NC) to another place.

There are several other threads on this topic here in the forum as well - please read those and sign the petitions and send/call your representatives to let them know how you feel.

Personally - I think the law is NOT going to generate any new tax revenue but it is going to cost folks money.

I try to teach my kids there are repercussions for your actions - wish our elected civil serpents, er servents (or as Robert Heinlein referred to them - civil masters) would get a clue.

Alas bgmaca - if having our elected leaders read a book could fix the problem - I'd send every member of congress a copy of "The Rise and Fall of the Roman Empire". As someone much wiser than me once said - those who ignore history are doomed to repeat it.

peace,
--Jack

[Trader54]

Originally Posted by GarrieWilson

Prime example of why people need to know pending laws and bills looking for sponsors/cosponsors so you can stop silly laws like this BEFORE they are passed.

Sounds like lately most laws and bills are passed without the members even reading them, some deals have been so big they haven't even had the time.

[thegoddessofeleven]

Is there some sort of petition available to sign to contest laws like this? It may be too late for NC, but our livelihoods depend on our squashing this before it spreads further. It makes me so angry that they can pass a law and, poof!-- perfectly legitimate business models are no longer an option.

[CDarklock]

Like many other professions before them, the affiliate marketers will now learn that it is really not so hard to pick up and move to another state when the work disappears.

Half-arsed suggestion: incorporate. Put your corporation in another state. Now you get to live in NC, but your company - the affiliate - is in some other state that doesn't have this problem.

It might work. I don't know. I'm not a lawyer, and I'm drunk.

[Bruce NewMedia]

This is part of the statist's dream come true.

Tax everything that moves in the state.

Extract tariffs, fees and taxes from any entity, even if the business is not even located in the state. ...and pay no heed to the local business damage done.

Businesses are of no real importance to the statist/leftist thinking. All the state cares about is bleeding businesses dry to pay for the non-productive.

However, there will be some states that do not tax internet sales no matter what the others do, .....just not many. And I'm not sure it's predictable who.

_____
Bruce

[Cash37]

It won't be long until the merchants are forced to pay taxes on affiliate networks that have affiliates in these states.

Moving won't help. Several other states are watching this, and if NC goes along with this UNCONSTITUTIONAL tax, they will be jawing at the bit to recover some of their state debt with this BS tax.

I do understand that Amazon among others can simply charge taxes on orders from our links, but the margins are so slim on affiliate commissions that it isn't even worth it to setup the accounting to track it.

Such a sad few weeks for AM. It really looks to be over within the next 6 months. I enjoyed having my own business while it lasted. At least I can feel the brick and motar shops pains now as I dust off my resume.

[CDarklock]

Originally Posted by Steve Porcaro

I am not always so sure about just moving, what about roots in the community, fighting for your home values that America was built on.

You can move your company without moving yourself. Just get a registered agent in the company's "home" state.

[Eric Lorence]

Just get a mail drop in a neighboring state, UPS box, or something similar.

Too minor of an issue to just give up...

[Tsnyder]

Incorporate in Nevada... no state income tax the last time
I checked and plenty of mail drop services who will receive
and forward your mail... or set up a bank account in a Nevada
Bank... have checks direct deposited and access the money
with a debit card.

Tsnyder

[CmdrStidd]

Well, there is one option to moving. Set up a mail drop. It is simple to do. All you do is contact UPS and tell them you need a mailbox in another state but you want that mail forwarded to your home residence. UPS has PO Boxes in many of their stores and for a small fee they will forward that mail anywhere in the US for you. Voila, your problem is solved. You keep your affiliate programs while keeping the house, garage, wife, kids, well, maybe not the wife. Just kidding.

[Cash37]

Originally Posted by Tsnyder

Incorporate in Nevada... no state income tax the last time
I checked and plenty of mail drop services who will receive
and forward your mail... or set up a bank account in a Nevada
Bank... have checks direct deposited and access the money
with a debit card.

Tsnyder

I need details on all of this. What banks do you recommend, what companies drop, etc.

[mr2monster]

Time for a Nevada state corporation and a P.O. Box....

[mr2monster]

Originally Posted by Tsnyder

Incorporate in Nevada... no state income tax the last time
I checked and plenty of mail drop services who will receive
and forward your mail... or set up a bank account in a Nevada
Bank... have checks direct deposited and access the money
with a debit card.

Tsnyder

beat me to it. :P

[John Durham]

Originally Posted by Marian Berghes

Still sucks abit tho

And for me its gonna be HARD to move to the US, I got only 2 options: either win the green card lottery or invest $500.000-$1.000.000 in some area of the US that has a bad local economy.

So it is/will be a GIGANTIC decision for me, and I don't wanna mess up

Ontopic: You could either move or try and find other companies that are still offering affiliate programs.

Or get an invitation to the U.S. by making a business deal with a U.S. corporation. They can send you an invite for legal entry.

[AllAboutAction]

Originally Posted by Cash37

I need details on all of this. What banks do you recommend, what companies drop, etc.

I recommend Earth Class Mail (sorry, can't post links). They have receiving locations in many states, and will open and scan your mail for you so you can view it online. I'm a happy customer and have been for some time.

[ptone]

Originally Posted by billyboy

explain it to me like a 5 year old...what are they doing?

Having 3 young children, I have experience with this...so, I'll give it a whack.

Once upon a time, the brainless people that run the NC government decided that they wanted to raise some money to pay for their frivolous spending habits.

Since NC has a difficult time collecting sales tax on items sold over the Internet, they thought it would be really smart if they forced companies like Amazon to collect sales tax on any items sold as a result of an affiliate of Amazon that lives in NC providing that sale. In other words, a NC resident that is also an Amazon affiliate runs a website that directs visitors to Amazon. He/she then makes a sale because of this. BAM - NC gets some money.

Amazon says they do not want to deal with the hassles of having to collect sales tax for NC, so they simply terminated the contracts with all affiliates living in NC.

The End.

IMHO, what makes this stupid beyond belief is this:
Imagine that someone living in Texas goes searching for the latest digital camera. He comes across an affiliate's site that lives in NC. He clicks a link for the camera he likes and buys that camera. So, a Washington state-based company sells an item to a resident in Texas and NC thinks it has a right to collect sales tax on this transaction? WTH are they thinking? They are already getting money from this transaction anyway because the affiliate has to pay income tax from his affiliate commissions. What greedy jackasses.

[Marian Berghes]

Originally Posted by kadensnga

Or get an invitation to the U.S. by making a business deal with a U.S. corporation. They can send you an invite for legal entry.

Yeah but that only allows me to stay for 3-6 months as far as I know, and I can't work or make any kind of subscription for a cell phone number for example.

I am in India and I have (had) a dream of moving to the US. Now I guess I have to reconsider. There are many things happening there which repels me (sorry US guys).

Originally Posted by Marian Berghes

Still sucks abit tho

And for me its gonna be HARD to move to the US, I got only 2 options: either win the green card lottery or invest $500.000-$1.000.000 in some area of the US that has a bad local economy.

So it is/will be a GIGANTIC decision for me, and I don't wanna mess up

If you are single, getting married to a US girl is the easiest option as of now

[mywebwork]

This stupidity has also spread to Hawaii - I received my Amazon letter a few days ago.

Amazon Drops North Carolina and Hawaii Affiliates - 5 Star Affiliate Blogs

Amazon Terminates Hawaii and North Carolina

I used to do affiliate marketing but fortunately I've moved on to other things now, so this isn't going to impact me as much as it will other marketers here. Still the idea of incorporatuing in Nevada is looking better every day.

Bill

[nicholasb]

or switch to product creation

[Dredger]

I watched the press conference on this yesterday. The spokesman for the new "law" said that they also intend to go after back taxes on this as well. By the way, if you go to the government website, there is no mention of this in Bill 202. They cover the new rules for dog owners and the raise in parking fees at the airport, but not one word about the Internet tax. Of course, that was yesterday, they may have posted something today. They kind of make it up as they go along. Can't find anything anywhere that says the "Governor" actually signed this into law.
P.S. check out my last url in my sig before I have to take it down. It's CJ, still haven't heard from them yet. Anybody want to make an offer on a brand spanking new website? It went live last Saturday.

[hiphil]

In the UK it is possible to rent a business address in a different part of the country. This service is offered by secretarial and/or business service companies. So you can have your business address in a city hundreds of miles from where you live.

Is this service available in the US? (Try Googling "accommodation address" , "mail box service", "business services" etc.)

Or you might be able to find someone willing to provide this service for you (another Warrior perhaps).

If you can have your business address in another state, then you might be able to get round silly laws in your own state.

[YseUp]

Originally Posted by Marian Berghes

Still sucks abit tho

And for me its gonna be HARD to move to the US, I got only 2 options: either win the green card lottery or invest $500.000-$1.000.000 in some area of the US that has a bad local economy.

So it is/will be a GIGANTIC decision for me, and I don't wanna mess up

Ontopic: You could either move or try and find other companies that are still offering affiliate programs.

Dude why do you want to move to the US? It's not the land of milk and honey portrayed on TV and in the movies.

[~Davor Debrecin~]

Wow, this is really a stupid decision from the NC government.

But, IMHO Amazon and other companies wouldn't make a decision like this one (terminating affiliate agreements) if the government financed (or helped in some way) the new additional costs Amazon and other companies now face.

If they told them that they will create a special software for them that would track the amount of sales tax they need to pay, or that they will organize a special department that will help all companies implement the new system, then these companies wouldn't suffer 100% of those additional costs. The more the government reduced the hassle for these companies, the better!

And then Amazon would not made the decision they made.

Or maybe they still would because this is really an unfair and greedy decision these governments have made, so..

Maybe if every state in the US decides the same, than Amazon will be forced to make the changes they need. But I don't believe this will happen.

Take care,

~Davor

Originally Posted by ptone

Once upon a time, the brainless people that run the NC government decided that they wanted to raise some money to pay for their frivolous spending habits.

Since NC has a difficult time collecting sales tax on items sold over the Internet, they thought it would be really smart if they forced companies like Amazon to collect sales tax on any items sold as a result of an affiliate of Amazon that lives in NC providing that sale. In other words, a NC resident that is also an Amazon affiliate runs a website that directs visitors to Amazon. He/she then makes a sale because of this. BAM - NC gets some money.

Amazon says they do not want to deal with the hassles of having to collect sales tax for NC, so they simply terminated the contracts with all affiliates living in NC.

The End.

IMHO, what makes this stupid beyond belief is this:
Imagine that someone living in Texas goes searching for the latest digital camera. He comes across an affiliate's site that lives in NC. He clicks a link for the camera he likes and buys that camera. So, a Washington state-based company sales an item to a resident in Texas and NC thinks it has a right to collect sales tax on this transaction? WTH are they thinking? They are already getting money from this transaction anyway because the affiliate has to pay income tax from his affiliate commissions. What greedy jackasses.

[Dredger]

The Internet portion of tax bill 202 has been postponed for a couple of weeks according to an email I just received from LinkShare. If you are a LinkShare affiliate, they are asking you to compose a "letter to the governor" detailing how this proposed law will impact your business. They even furnish a template. They will hand deliver these letters to the key leaders and the governor. We may have just been given a break. Let's all do our part and get those letters to LinkShare.

[melanied]

That's HILARIOUS!

Originally Posted by CDarklock

I'm not a lawyer, and I'm drunk.

[GarrieWilson]

Originally Posted by ptone

IMHO, what makes this stupid beyond belief is this:
Imagine that someone living in Texas goes searching for the latest digital camera. He comes across an affiliate's site that lives in NC. He clicks a link for the camera he likes and buys that camera. So, a Washington state-based company sells an item to a resident in Texas and NC thinks it has a right to collect sales tax on this transaction? WTH are they thinking? They are already getting money from this transaction anyway because the affiliate has to pay income tax from his affiliate commissions. What greedy jackasses.

It doesn't work like that. They only collect and pay taxes for purchases made from NC residents not if a NC affiliate is the referral.

Originally Posted by ~Davor Debrecin~

But, IMHO Amazon and other companies wouldn't make a decision like this one (terminating affiliate agreements) if the government financed (or helped in some way) the new additional costs Amazon and other companies now face.

The costs are deducted as a tax credit when you file taxes.

If they told them that they will create a special software for them that would track the amount of sales tax they need to pay,

Amazon already has it. They just need to add another tax code. 10 minutes of work.

That's not the point though.

1. It's unconstitutional.
2. It would reduce Amazon sales for NC.

or that they will organize a special department that will help all companies implement the new system,

Yeah. Just what we need. Another organization.

The more the government reduced the hassle for these companies, the better!

The LESS the government does, the better.

If affiliates create a nexus then so does advertising.

[Marty S]

I would be feeling very stressed right now if I wasn't Canadian. Still something to keep a close eye on though.

It reminds me of the US legislation a few years ago which banned online poker, only to create 2 mega sites, Full Tilt and Poker Stars which operate offshore.

[Nightengale]

Given the recession, you'd think government would be doing everything possible to encourage entrepreneurship instead of killing it.

Their timing is impeccable, I must say.

Michelle

[Thomas Belknap]

Originally Posted by CDarklock

You can move your company without moving yourself. Just get a registered agent in the company's "home" state.

It doesn't work that way otherwise everyone would be setting up shop in Nevada where there is no state tax.

If you are actively running your business from NC but have a company based out of Nevada than you are still going to be paying taxes in NC.

[ptone]

Originally Posted by GarrieWilson

It doesn't work like that. They only collect and pay taxes for purchases made from NC residents not if a NC affiliate is the referral.

Are you sure?

Because if that were the case then NC would just require that all purchases from NC residents be taxed whether it was made because of an NC affiliate or not. In which case, Amazon would stop selling items to all NC residents or start collecting the sales tax. Also, what would be the point of canceling affiliate contracts in NC if this were the case?

Right? What am I missing here?

[K2SMedia]

Originally Posted by Josh Anderson

Bye Bye NC and hello new home in a state with legislators that adhere to the constitution.

This simply doesn't exist. Seriously.

This country is.... ugh. It stressed me out just thinking about it.

I'm ready for a different country, that's for sure.

[Thomas Belknap]

Originally Posted by ptone

Are you sure?

Because if that were the case then NC would just require that all purchases from NC residents be taxed whether it was made because of an NC affiliate or not. In which case, Amazon would stop selling items to all NC residents or start collecting the sales tax. Also, what would be the point of canceling affiliate contracts in NC if this were the case?

Right? What am I missing here?

NC residents are suppose to pay taxes on their online purchases. It is called a "Use Tax". I doubt many do pay those taxes which is why the states want companies, such as Amazon, to start collecting them.

[Shaka]

Thank you everyone for your thoughts. Now I have a headache and want to get drunk (and I dont' drink!)

[discrat]

Originally Posted by Josh Anderson

Amazon is cutting off all its NC affiliates as well:

Amazon cuts relationships with N.C. affiliates : News-Record.com : Greensboro & the Triad's most trusted source for local news and analysis

A pretty good article on the issue. In this case Amazon was making the move to avoid liability and send a message to NC before being forced to collect and pay illegal taxes like they are being force to collect and pay in NY.

If the state you are in creates unconstitutional laws just to try and collect more taxes you might be better off moving.

What we really need to hope for is for the Amazon vs NY case to make it to the Supreme court and set some precedent on this and put these unconstitutional moves by money hungry state legislatures to bed once and for all.

I wholeheartedly agree !! Just treat it like a job relocation for any of you BIG Hitters out there whose family rely on this for thier Living.
Thats the way you might want to look at it. Of course there are many other options out there as far as Affiliate Networks !

[ptone]

Originally Posted by Thomas Belknap

NC residents are suppose to pay taxes on their online purchases. It is called a "Use Tax". I doubt many do pay those taxes which is why the states want companies, such as Amazon, to start collecting them.

But where do the affiliates come in? I still don't understand why Amazon would cancel affiliates' contracts if the NC gov't wants Amazon to collect sales tax on NC residents' purchases. I'm sure there are plenty of NC residents that make Amazon purchases by going directly to Amazon's website.

[Thomas Belknap]

Originally Posted by ptone

But where do the affiliates come in? I still don't understand why Amazon would cancel affiliates' contracts if the NC gov't wants Amazon to collect sales tax on NC residents' purchases. I'm sure there are plenty of NC residents that make Amazon purchases by going directly to Amazon's website.

Why deal with the headaches of collecting the taxes for each state? That could cost them millions in software changes to implement that on a state level. Each state has different sales taxes.

They don't get majority of their sales from affiliates so why put that time and money into software changes. It is easier and less expensive to cut all affiliates from the state.

[Russ Reynolds]

Any of you guys who want to get out of the US can trade me.

I'll go live in San Diego where it is warm and diversify my business and focus more on product creation instead of affiliate stuff.

I am not saying that you shouldn't fight this at all but I wouldn't be in a big hurry to get out either.

BTW - I really am trying to move to San Diego and have spoken to an immigration lawyer - it is not impossible. Can anyone recommend a good quiet area near the ocean for a family?

[AnneE]

I also don't understand Amazon's logic. Why did they cut ties with NC affiliates for NC considering a law that they compare to NY's law. But Amazon still has NY affiliates (I'm one of them).

I also don't understand why they would be trying to tax affiliate commissions but not purchases made by people in NC? Shouldn't the taxable/not taxable decision be based on the location of the purchaser and the buyer? Usually for state tax to be owed, both have to be in the state. Not sure what the affiliate has to do with anything? Does anyone understand (even if they disagree) with the logic?

Also Delaware has no sales tax. You will notice TONS of companies are incorporated in Wilmington, Delaware.

[GarrieWilson]

Originally Posted by ptone

Are you sure?

Yes.

Because if that were the case then NC would just require that all purchases from NC residents be taxed whether it was made because of an NC affiliate or not.

They can't - yet.

The NC government is saying an affiliate is a representative of the company which creates a Nexus in the state. Like having an office, wharehouse, etc.

Also, what would be the point of canceling affiliate contracts in NC if this were the case?

Amazon might sell more in NC than affiliates bring in so collectig tax would reduce their income.

Originally Posted by AnneE

I also don't understand Amazon's logic. Why did they cut ties with NC affiliates for NC considering a law that they compare to NY's law. But Amazon still has NY affiliates (I'm one of them).

Amazon is currently sueing NYC over the issue. Wait and see if they continue.