Another Amazon Tax Fight is on the Horizon in Connecticut

by tpw
16 replies
Connecticut is the most recent state to tackle the question of the Amazon Tax:
Lawmakers eye 'Amazon tax' on Internet purchases to close budget gap - NewsTimes

They are proposing to force Amazon to collect sales taxes on any sales that are made to Connecticut residents, and arguing the flawed position of "if you have an affiliate in our state, then you have a physical presence in our state."

We know where this will go if the law is passed in the language that lawmakers are suggesting.

Amazon will cut relationships with all Connecticut-based affiliates.

If Connecticut lawmakers would use their brains on this, they could avoid the protracted legal battles that other states are fighting with Amazon over this very issue.

If you were a lawmaker in Connecticut, how would you word the legislation different than other states have done, so as not to cut your nose off to spite your face?
#affiliate marketing #affiliates #amazon #connecticut #fight #horizon #tax
  • Profile picture of the author Will Perkins
    Originally Posted by tpw View Post

    Connecticut is the most recent state to tackle the question of the Amazon Tax:
    Lawmakers eye 'Amazon tax' on Internet purchases to close budget gap - NewsTimes

    They are proposing to force Amazon to collect sales taxes on any sales that are made to Connecticut residents, and arguing the flawed position of "if you have an affiliate in our state, then you have a physical presence in our state."

    We know where this will go if the law is passed in the language that lawmakers are suggesting.

    Amazon will cut relationships with all Connecticut-based affiliates.

    If Connecticut lawmakers would use their brains on this, they could avoid the protracted legal battles that other states are fighting with Amazon over this very issue.

    If you were a lawmaker in Connecticut, how would you word the legislation different than other states have done, so as not to cut your nose off to spite your face?

    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
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  • Profile picture of the author MichaelHiles
    I predict that this is going to become a political topic and get locked.
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    • Profile picture of the author tpw
      Originally Posted by MichaelHiles View Post

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

      Human nature being what it is will push most any thread talking about government action into a political realm.

      I hope we can be adult enough about the subject, without taking political sides on the subject. :p


      p.s. Good to see you here Michael...
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      • Profile picture of the author MichaelHiles
        Originally Posted by tpw View Post

        Human nature being what it is will push most any thread talking about government action into a political realm.

        I hope we can be adult enough about the subject, without taking political sides on the subject. :p


        p.s. Good to see you here Michael...

        I'm never too far away...
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  • Profile picture of the author Lauryn
    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.
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    Don't be an arse and try to flip something you clearly have no knowledge of against me.

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  • Profile picture of the author pizzatherapy
    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...
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    • Profile picture of the author Will Perkins
      Originally Posted by pizzatherapy View Post

      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...
      Not exactly Florida is one of the nine states that do not have income tax. Although our property taxes are a b****...

      No income tax might also explain why we're always so short on money though :p
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  • Profile picture of the author jtgjustin
    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.
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  • Profile picture of the author energytimes
    Just past in IL just got the letter this morning i'm sure more will follow.
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  • Profile picture of the author CDarklock
    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?
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    • Profile picture of the author Tina Golden
      Not to argue whether these laws are good or bad for the economy, does anyone else see that there is a very good possibility of this eventually hitting every state? Amazon is going to have to figure out how to deal with this situation if that happens.

      They keep fighting and pulling affiliates, but this doesn't seem to have the least effect on the states in question.
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      • Profile picture of the author CDarklock
        Originally Posted by Tina Golden View Post

        does anyone else see that there is a very good possibility of this eventually hitting every state?
        There are six "safe" states for Amazon affiliates.

        Washington, where Amazon's HQ is located. They have to collect sales tax from customers here already, so any change in the affiliate policy doesn't mean jack.

        And the five states that have no state sales tax, which I've memorised: Alaska, Delaware, Montana, New Hampshire, and Oregon.

        As mentioned earlier, it takes about $200 and less than 24 hours to register a corporation in Delaware which can then be an Amazon affiliate quite safely.
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        "The Golden Town is the Golden Town no longer. They have sold their pillars for brass and their temples for money, they have made coins out of their golden doors. It is become a dark town full of trouble, there is no ease in its streets, beauty has left it and the old songs are gone." - Lord Dunsany, The Messengers
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        • Profile picture of the author GeorgettaSterling
          Originally Posted by CDarklock View Post

          As mentioned earlier, it takes about $200 and less than 24 hours to register a corporation in Delaware which can then be an Amazon affiliate quite safely.
          And Montana has very liberal LLC legislation. Virtually instant LLCs available for around $100, and corporate office addresses are dirt cheap too.
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      • Profile picture of the author nubchai
        Originally Posted by Tina Golden View Post

        Not to argue whether these laws are good or bad for the economy, does anyone else see that there is a very good possibility of this eventually hitting every state? Amazon is going to have to figure out how to deal with this situation if that happens.

        They keep fighting and pulling affiliates, but this doesn't seem to have the least effect on the states in question.

        I think it's a possibility if Amazon terminates New York and California affiliates. Time will tell but if they terminate the program in the larger states I wonder whether having affiliates in remaining states would be much value to them.

        Sandy
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  • Profile picture of the author Marvin Johnston
    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
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  • Profile picture of the author bbonus
    I JUST GOT THE LETTER IN IL THIS AM TOO. unreal.......................so i guess i'm done?
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