Another Amazon Tax Fight is on the Horizon in Connecticut

I'm sorry but aren't there already enough Americans without jobs? I don't understand why greedy, freaking law makers are deciding to suddenly hop on this since Illinois did...

I feel sorry for anyone who lives in a state considering this new "law". Because if it happens to Florida, Amazon has no problem paying someone off-shore just as easy as on-shore. Not to mention I'd be able to avoid having to deal with taxes. :p

I predict that this is going to become a political topic and get locked.

This is getting ridiculous. They're going to end up making Amazon destroy the system, or a lot of people will end up moving their businesses in other states with a corporate veil.

This is exactly what happened to me in the state of Hawaii almost two years ago. (I am a Hawaii resident).

The tax Amazon bill passed in the Hawaii state legistlature. Amazon immediately cut me out of their affiliate program. It was swift and complete. All of a suddent the hundreds of amazon links I had set up offered me no commision. The links worked but my affiliate id was inoperable.

Luckily, our Governor vetoed the bill and it did not become law. Within 30 days after that I was reinstated as an Amazon affiliate.

It seems to me, that the handwriting is on the wall. Each state is different. However,
you can contact your state legistlators and explain that as an Amazon Affiliate you pay income tax to the state already.

The lesson for all Affiliate Marketers is to try to diversify.

I am originally from Connecticut, and knowing what I do of that state, they love to tax anything and everything...I will be watching this story....

I hope it has a happy ending...for Amazon Affiliates...

I live in connecticut.. I've spent the last 3 months building amazon sites... I swear to god if they pass this I will flip a sh*t.

Just past in IL just got the letter this morning i'm sure more will follow.

Amazon need to write an open letter to legislators, which I envision going something like this.

Dear Legislators,

We appreciate and understand that many of you are facing large budget shortfalls, and that you are considering your options to increase tax revenue. We also understand that you are considering the possibility of requiring online vendors - like us - with affiliates in your state, to collect sales tax from residents of your state on every purchase.

Well, to be blunt, we don't like the idea of tracking the sales tax rates of every state in the nation. That is a big job, and we don't want to do it, because it would cost us a lot of money. So we're not going to do it.

Instead, if you claim that an affiliate in your state is a physical presence, and that means we need to collect sales tax on your behalf... we will simply stop accepting affiliates from your state.

You see, we don't really need affiliates. They don't make us that much money. In fact, most of the affiliate commissions we pay out are not because our affiliates made a sale... but because someone clicked an affiliate link, received that affiliate's tracking cookie, and later came directly to Amazon to purchase something completely unrelated.

If your state's affiliates don't get to set tracking cookies anymore, people still buy from us, we just don't have to pay an affiliate. Which actually saves us money.

But since most people are constantly seeing and clicking Amazon affiliate links, chances are pretty good that anyone ordering from us has a tracking cookie from some affiliate who gets paid a commission. But once your state's affiliates are gone, that commission is not going to go into your state for those affiliates to pay income tax on it. It is going to go into some other state, where they have quite wisely reasoned that the income tax rate is significantly higher than the sales tax rate.

You may think that our big affiliates will pressure us to stay in the state, so they can keep making their fat commissions. That is not going to happen. Instead, they will simply incorporate in Delaware - as so many people do - and then their corporation will become the affiliate. Because Delaware has no state sales tax, so they will never ask us to collect it.

It costs about $200 to start a Delaware corporation, and you can do it in less than 24 hours. That's a lot easier than trying to argue with us, or indeed with you.

There are, of course, small-time players who won't incorporate. People who are unemployed or underemployed, often work-at-home moms or people on the welfare rolls, and just generally people your state is already failing to adequately employ. The little income they get from us will be happily transferred to you, and make your budgetary crisis a little bit worse.

Much as the move of big affiliates to Delaware corporations will make your budgetary situation a little bit worse.

And meanwhile, we will lose some of our smaller and less-productive affiliates, but we will probably not lose any significant sales volume as a result of it. Instead, we will simply have to send out fewer affiliate checks, as most of what your state's affiliates were earning is now going to other affiliates in different states. And the rest is going in our pocket.

But hey! It's your state, and you get to make the laws. So feel free to make your budget worse, drive business out of your state, take money from the disadvantaged, and send that money to people in other states. Because that is almost certainly what your constituents had in mind when they voted for you.

Isn't it?

From what I've seen, nobody has written a compelling sales letter to the legislatures as to why what they are doing is ... ah ... less than admirable.

I think this is more a case of kicking people that won't fight back. The people who are, or could be affected need to start kicking back.

My guess is it would take a month or so of doing the research to find the hot buttons that could get this nonsense stopped, and then another month of getting a good sales letter written.

And then the fun could begin of publicizing what these legislators and lobbyists are doing. And how it hurts the very state they are "concerned" about helping.

Marvin

I JUST GOT THE LETTER IN IL THIS AM TOO. unreal.......................so i guess i'm done?