Correct Me If I'm Wrong Re: Affiliate Marketing

You are not wrong, it is just Amazon and probably some other online merchants in the same situation.

It sounds like they misunderstood what you meant since you are talking about an affiliate program for people to get affiliates not for them to be affiliates, right?

Lee

Hey Tiff,

Not my part of the world, but I did read this article when the furore started -

ShareASale Blog » Blog Archive » Governor Quinn Abolishes Affiliate Marketing in Illinois

HTH

Cheers
Partha

Thanks for your replies. Yes, I was talking about the person setting up her own content store, then letting affiliates from all over the world promote for her. So she could still do that, awesome!

I thought, from the way she talked, that maybe Illinois had some cantankerous rule about not even having an affiliate program.

You rock Warriors!
tiff

Yeah, Gov. Quinn must be friends with Gov. Rick Perry... but it is not only them, it seems there are quite a few that against Internet Marketing these days. (At least Rick Perry is running for President... maybe we can get rid of him like we did Bush? Give the problem to everyone else instead of ourselves, LOL?)


It is an interesting problem, dealing with governments that try to hold back the Internet and Internet Marketers... Ultimately they cannot win, but they do have power and they are desperate for money right now, in the short term.


Anyway, from what I've read, it seems to me that although your client cannot be an affiliate or have any affiliates from IL, they should be able to have affiliates from other states working for them.

Gov Perry was against the law that forced Amazon out - he's PRO business and affiliates.

The comptroller made that decision. Here's a news blurb about it:

"At issue is whether a company with a physical presence in the state is compelled to pay sales taxes to residents of the state. Perry's argument is that since Amazon has no storefront the physical presence rule shouldn't apply, and from his comments it sounds as though he may push the Legislature to make some move that would allow the company to stay and not pay taxes."

Tiff

No. You can still create an affiliate program, or market products as an affiliate. Amazon just took their ball and went home, that's all.

I still think this is just for Amazon affiliates. Does anyone have a link that shows that other affiliate programs are not allowed in Illinois?

Gov Quinn (grrr) in Illinois passed a bill saying Amazon had to report Illinois sales tax for Illinois affiliates. I don't think Amazon had to collect the sales tax but Illinois wanted the amount documented so that the affiliates would then pay the taxes due. That was my understanding. Then of course Amazon pulled out of Illinois so there were no more Amazon affiliates.

/* Begin Rant It was another example of bad thinking on the part of Quinn and other legislators. Illinois is turning into an anti business state and small business are starting to move to Indiana and Wisconsin. /* End Rant

Howdy,

I live in North Carolina, one of the states that passed what is known as "The Amazon Tax".

Here is how it works.

The state governments have declared that companies who use "affiliate marketers" to promote their product have a presence inside the state and are subject to the laws of that state for in state business.

Therefore, Amazon.com would be required to collect sales tax from all sales originating from, in my case, North Carolina. Therefore, they terminated the affiliate program to residents of the state. I can no longer be an affiliate.

I considered using an out-of-state address to conduct business, but then came to realize that I might be held liable for sales tax of all sales Amazon made to this state since the day they enacted the law. (How many $5000 TVs did Amazon sell to NC in the last three years?) The law is illegal but I don't want to test it in court.

As a result of the termination of the program, Amazon.com does not fit the definition of the 'in state business' and is not required to charge, report or collect state sales tax for any sale in the state.

As for the person owning a digital product business in any state, sales made to others inside the same state may be subject to sales tax depending on the laws of that particular state. You will need to consult a tax specialist in your state to see if it applies to you.

If you have an affiliate in any state that supports the "Amazon Tax", you may be responsible for sales tax due for any sale you made to anyone in that state. You may want to consult your lawyer.

Anyone living in one of the Amazon Tax states knows that Clickbank charges sales tax for sales made to these states.

Amazon.com makes tens of millions of dollars in sales per year in some of these states. That would equate to about $80,000 per $ million in sales tax at 8%. It is easy to understand why the states would go after big businesses.

For the one of these states to go after a small business vendor that has affiliates in the state could be cost prohibitive. First of all, the State would be responsible for determining the total number of sales made to residents of the state. Then it would need to prove that the business has an affiliate in the state, then it would have to find the out of state business.Much of this information would not be tracked at all for digital products.

Therefore, many marketers don't worry about sales made through affiliates in these states.

This post may contain errors and omissions. It is strictly my opinion, not legal advice. If you want legal advice or a legal opinion, consult your lawyer.

yea for gov making laws to hurt the small business person in this recession.