Amazon Terminating Louisiana Affiliates

9 replies
Louisiana recently passed a law that would require Amazon to collect sales tax if they continued to use affiliates in that state. Rather then collect sales tax, they appear to be terminating their affiliate program in Louisiana.

I've spoken with one affiliate who received her termination notice Friday. (Note: check your email and look for a notification from Amazon - contact them if you don't see a notice but live in Louisiana!)

She contacted the Amazon Associate support desk and when she asked if she could have her brother (who lives in another state) open an affiliate account using her site and switch the links to his account, they gave her an interesting alternative.

The rep suggested she simply transfer her existing account to her brother before the termination date of April 1st.

I've never heard of that being an option for folks before but it makes sense. There are tax implications, of course - the income from the account gets reported under the brother's name, etc. Anyone in such a position would want to do their own research on any income tax impacts. However, it's an option to keep in your back pocket should you live in Louisiana. It also allows for the tracking IDs and reports to all be protected. Once the account is terminated that data is wiped out.

As Amazon has begun to collect tax in more and more states, I'd hoped we'd reached a point where this wouldn't happen as often but the Louisiana example highlights that a couple of other states are also at risk.

Nebraska and Utah are working on similar bills.

South Dakota is also considering sales tax legislation that would have an impact on Amazon but their approach seems slightly different. I'm not sure it has the same impact on affiliates but those in SD should pay attention just in case.

It's no fun when this happens, but it does happen. If you're in an impacted state you have several options I can think of at the moment:
  • Sell your site
  • Transfer your Amazon account to someone else (talk to them first to find out how and research your tax implications)
  • Sign up with a different affiliate program and replace the Amazon links in your site (you're usually limited to affiliate programs for retailers that have a physical presence in your state so think big box stores like Home Depot, Target, Walmart)
Stay informed and you'll have more time to come up with a back up plan should anything happen in your state.
#affiliates #amazon #louisiana #terminating
  • Profile picture of the author marks2424
    What would be the possibilities of going to another state and getting a PO box and using that as your address.
    {{ DiscussionBoard.errors[10597013].message }}
    • Profile picture of the author Sojourn
      Originally Posted by marks2424 View Post

      What would be the possibilities of going to another state and getting a PO box and using that as your address.
      I think that approach might lead to trouble. If Amazon finds out, they could terminate your account in bad standing which could make it difficult to get a new one.

      Plus, they're going to send you a tax form at the end of the year and they also send that tax form to the state on file on your account. That other state will want you to file a state tax form with them based on their knowledge that you made income while appearing to have lived/worked in their state. I'm not an attorney nor a tax specialist so you'd want to check out all of those things with an expert in that field before making that change.
      {{ DiscussionBoard.errors[10597031].message }}
    • Profile picture of the author BradVert2013
      Originally Posted by marks2424 View Post

      What would be the possibilities of going to another state and getting a PO box and using that as your address.
      You need a physical presence in the state, not just a PO Box. Basically, where ever you're paying state taxes, Amazon is going to use as your residence.Trying to skirt their rules will only lead to trouble down the road.
      {{ DiscussionBoard.errors[10597088].message }}
      • Profile picture of the author Sid Hale
        Originally Posted by marks2424 View Post

        What would be the possibilities of going to another state and getting a PO box and using that as your address.
        It's a ittle more complicated than that...


        Originally Posted by BradVert2013 View Post

        You need a physical presence in the state, not just a PO Box. Basically, where ever you're paying state taxes, Amazon is going to use as your residence.Trying to skirt their rules will only lead to trouble down the road.
        You don't need a physical presence in the state, but you do need to form a company (foreign corporation) in that state, and that company must have a mailing address in that state - best done by enlisting the services of a registered agent.

        The company is the Amazon affiliate, and YOU are the owner of that company. It is perfectly legal to own a company that is physically located in another state (think stockholder). The company can be an LLC, an S Corp, or a Class C corporation. For most, a Limited Liability Corporation (LLC) will likely be the preferred option.
        Signature

        Sid Hale
        Coming Soon... Rapid Action Profits (Pro)

        {{ DiscussionBoard.errors[10597412].message }}
        • Profile picture of the author blueonblue
          Originally Posted by Sid Hale View Post

          It's a ittle more complicated than that...




          You don't need a physical presence in the state, but you do need to form a company (foreign corporation) in that state, and that company must have a mailing address in that state - best done by enlisting the services of a registered agent.

          The company is the Amazon affiliate, and YOU are the owner of that company. It is perfectly legal to own a company that is physically located in another state (think stockholder). The company can be an LLC, an S Corp, or a Class C corporation. For most, a Limited Liability Corporation (LLC) will likely be the preferred option.

          Thank you for the information Sid. Here in MD, Amazon built a warehouse and even delivers in their own trucks so no affiliate program here.
          {{ DiscussionBoard.errors[10665750].message }}
          • Profile picture of the author agmccall
            Originally Posted by blueonblue View Post

            Thank you for the information Sid. Here in MD, Amazon built a warehouse and even delivers in their own trucks so no affiliate program here.
            You need to check amazon TOS. MD is fine for affiliate program. Where Amazon has a warehouse has nothing to do with who can be a associate/affiliate, it has to do with tax legislation it particular states.

            Currently the only states not eligible for the associates program are Arkansas, Louisiana, Maine, Missouri, Rhode Island, or Vermont. You should check amazon TOS regularly to make sure your state is still eligible.

            al
            Signature

            Broken promises don't upset me. I just think, why did they believe me?
            ~Jack Handey~

            {{ DiscussionBoard.errors[10665857].message }}
  • Profile picture of the author BradVert2013
    This really stinks. It happened in Illinois several years ago, then the state supreme court ruled the law uncomstitutional. Amazon immediately invited affiliates back.
    {{ DiscussionBoard.errors[10597085].message }}
    • Profile picture of the author Sojourn
      Originally Posted by BradVert2013 View Post

      This really stinks.
      I agree! I always feel bad for anyone who has to go through this.

      Originally Posted by BradVert2013 View Post

      It happened in Illinois several years ago, then the state supreme court ruled the law uncomstitutional. Amazon immediately invited affiliates back.
      I hope there's a future change for LA, too. You'd think one of these years the states, the feds, and Amazon would all get on the same page but we know where their focus is this year and it's not on sales tax reform.
      {{ DiscussionBoard.errors[10597090].message }}
  • Profile picture of the author nishadhasan
    If it is true then louisiana affiliates are gonna have hard time.
    {{ DiscussionBoard.errors[10597941].message }}

Trending Topics