Georgia Affiliates - Proposed Nexus Law

by jendoe
22 replies
Guys,

Just in case you haven't heard... it looks like we're on the chopping block next. The House is currently considering HB-993 which would create a nexus in the state for retailers using affiliates (i.e. an "Amazon law").

Unfortunately, it looks like this is being driven by big businesses (ie. Home Depot, Best Buy, Target, Walmart) that feel it's too difficult to compete with sites like Amazon and Overstock, due to having to pay sales tax.

The incredibly stupid thing is - they (the legislators) won't get what they want. In other states, passing similar laws has caused Amazon to immediately close its affiliate program in the state, resulting in $0 in new sales tax.

Further, the affiliates are no longer able to earn extra income to spend in state (or to pay state taxes on), and larger affiliates may move their business out of state. Thus resulting in even less income for the state.

Here are a couple links:
Georgia's effort to collect taxes on Internet sales | Political Insider
Governor Deal, Don't Put Us Out Of Business
Georgia House Bill 993
Georgia Affiliates vs. Gov. Deal and Home Depot
Georgia Affiliates Are Screwed

Please contact your representatives, contact the committe members that are sponsoring this, and contact the governor... and let them know what a lousy idea this is. Ask your friends and family to do the same!

(And, frankly, I'm going to spend alot LESS time/money with big retailers and look for MORE ways to shop online, just to spite them. What they're proposing isn't just bad for us, personally, it's bad for the entire state and will likely result in LESS tax revenue at the state level.)

Thanks, and sorry if it's been mentioned here already... I hadn't seen anything pop up yet.
#affiliates #georgia #law #nexus #proposed
  • Profile picture of the author bitriot
    One easy way to "get around this" is to switch over to skimlinks.

    In the end, every state is going to pass nexus law because, they don't mind losing revenue from amazon in the short term if it moves them closer to SALES TAX ON ALL INTERNET SALES in the mid-long term.

    Which just so happens to be what Amazon is suggesting should happen as well.

    In general, I am ambivalent about this. It is unreasonable to think that internet business can continue to put mainstreet retailer after mainstreet retailer out of business without kicking in sales tax revenue at some point.
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    • Profile picture of the author onSubie
      Originally Posted by bitriot View Post

      In general, I am ambivalent about this. It is unreasonable to think that internet business can continue to put mainstreet retailer after mainstreet retailer out of business without kicking in sales tax revenue at some point.
      It is interesting that the large retailers and big-box stores can use their power of scale to move into a town and cut down all the local businesses who can't compete on their level.

      But as soon as the "Internet" provides other consumer options, they cry about unfair competition.

      Maybe there should be a "Big Box" tax to protect local small business, just as the Big Box stores want an "Internet" tax to protect them...
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  • Profile picture of the author Madush
    Banned
    What is Georgia Affiliates???
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    • Profile picture of the author lerxtjr
      awwww, man, I'm really sorry to hear that. And, your "wondering" about what's going to happen is futile. If your state has been targeted, don't waist your time protesting. It's going to go through with flying colors within the next 3 months and without warning Amazon will send an email to you telling you they are no longer paying commissions to Associates in your state, sorry!

      Happened to me a couple of years ago and axed 40 websites of my own where I was making a near full-time income just in Amazon affiliate sales alone.

      The sucky thing about it is that AMAZON benefits as well! Just like a software company that starts out in the beginning promoting its product through a reseller channel, Amazon has not problem cutting you out of the loop and taking all the sales direct.

      Research any way you can now to get out of promoting Amazon product. It's just how thing are happening and Amazon isn't losing a night of sleep over it.
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  • Profile picture of the author jendoe
    Bitriot: Thanks. I've been checking out skimlinks (seen a few references to them), and it looks like something I'll pursue.

    RatRaceGrad: No problem.

    Madush: Affiliates that are located in the US state of Georgia.

    Affiliate nexus laws have been an ongoing issue in the states. It sucks, because there is a federal law (originally intended to cover "mail order" business, from before the internet) that says, if a company does not have a nexus (physical presence) in a state, they do not need to charge sales tax to people in that state.

    More states are claiming that affiliates now consitute a NEXUS. Anyone who knows how affiliate marketing works knows this is crazy, an affiliate is not the same as a storefront or warehouse. As I mentioned above, it's even crazier to me b/c the government is not going to actually increase their tax revenue with this scheme. I can understand why the first few states pursued it, before they knew how this would play out, but we've seen it in several states now with the same results. It's just plain stupid, honestly

    Lerxtjr: Wow - I'm sorry to hear that you lost so much. That's terrible And, thanks for the advice.

    And, in a stroke of cosmic irony, February is actually turning out to be my best month yet on Amazon - the first month that I broke $100 in earnings. Not a huge amount, I know, but it's a milestone.

    Thanks everyone.
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    • Profile picture of the author Kaneco
      I have personally vowed to destroy the political careers of those state reps in Georgia are pushing this. Websites are being created against them , PAC paperwork is being filled out, even if they pass this I want any one who ever thinks about messing with the Internet in Georgia to know that home depot has nothing over the power of affiliate marketers in the state.

      Just joined but long time affiliate marketer, been at DNf.com doing domain stuff but anyways look forward to sharing info.
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  • Profile picture of the author Troy_Phillips
    That is why I quit working with Amazon when the first state passed the law. I knew when they did .. Ga would get in line.

    I already have tax numbers prepared for the day all sales will require we pay one state or the other their share of taxes.

    It is almost to the point of being tax savvy to set your online endeavors to be run through a brick and mortar.
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  • Profile picture of the author hikerguy777
    Looks like it's coming to fruition, unfortunately. I got the first of what I expect to be many of these types of emails today.

    What are my options here? Move to another state? Incorporate in Delaware?

    Thanks in advance.

    ===

    Content of the letter below:

    "On December 31, the state of Georgia will be instating a law that unfortunately requires us to end our partnerships with Georgia-based affiliates. Under this new law, online retailers such as Wayfair must collect and remit sales taxes on purchases made by Georgia residents if the online retailer has a physical presence in the state. Wayfair has no physical presence in the state of Georgia but the new law expands the meaning of "physical presence" beyond a warehouse, factory or office to include affiliate relationships.

    We are opposed to this legislation and we deeply regret the action we are being forced to take because of this law.

    Due to this new tax law, contracts with all Georgia affiliates in the Wayfair Affiliate Program will end as of December 31st. Because of the way the law is written and will likely be enforced, we will not be able to pay commissions or fees on any orders placed after that day, no matter when they were directed. This means Wayfair may not be able to honor our 60-day referral period. If a Georgia affiliate were to direct a visit in December that led to a sale in January, we would not be able to pay a commission on that sale.

    We are writing to inform you of this upcoming change. We will send at least one more newsletter through ShareASale to remind you and inform you of any changes. You are receiving this email because our records indicate that you are a resident of Georgia. If you relocate to another state after December 31st, please reapply to our program in ShareASale.
    The Georgia tax law only affects our ability to work with affiliates in the state of Georgia. It does not impact Georgia residents who purchase online at Wayfair.com or any of our online stores.

    We have enjoyed working with you and our other Georgia-based affiliates, and if this law ever ceases to exist we would be happy to work with you again."
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  • Profile picture of the author Troy_Phillips
    @Hikerguy777

    Affiliate programs are going to be forced to change. In the very near future, all but a handful of states will join this trend.

    Collecting state tax and redistribution is not beyond the realms of possibility for most internet marketers. The ability to sweep profits under the rug shrinks dramatically but for those serious enough to set up a true business, and run it like every other real business, This can be a very profitable transition.

    As for being a Georgia affiliate in the real time, If you are already driving enough traffic to an Amazon page to worry about this new law, you might be better served to find those products locally and be their middle. It is a lot easier working out deals locally. You could soon get to the point of buying in bulk and make even better profits.
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  • Profile picture of the author PotPieGirl
    The "fun" part of all this is that now Georgia residents will have to pay an 8% sales tax on ANYTHING they buy online. Source here

    As a Georgia resident, this situation has me so...well, so baffled - I just can't see how anyone saw that this affiliate Nexus law was a good idea - or even made sense.

    "Nexus" means that we, as Georgia-based affiliates, create a physical presence for these online merchants that are NOT in Georgia.

    I can't recall the last time - or ANY time - I shipped an Amazon order from my house when someone bought through my advertising link.

    We (affiliates) are advertisers - not a "brick and mortar" presence - and there is a BIG difference there.

    Now, the State of Georgia will cause all resident affiliate marketers to lose their jobs. Naturally, the vendors will fire us (and it's already begun).

    Georgia residents who are online affiliates lose income.... the State of Georgia makes less in taxes paid on that previously earned income... we spend less because we make less... AND the State of Georgia doesn't get that tax money anyway because the vendors removed that "nexus" by firing us.

    End result, Amazon and the like make even MORE money.

    I find it hard to believe that ALL Georgia affiliates will go remove ALL their Amazon links on the internet when this happens. Will those links no longer work? Of course not! They will still work fine - except they will skip one important thing - paying the affiliate for the sale they created.

    Oh, and if the Georgia customer who buys online is NOT charged the 8%, Georgia will supposedly hit those customers with a "Use Tax" to be paid to the GA Dept of Revenue at tax time (see the source above).

    Neat, huh?

    My question is this - If Georgia is going to charge their resident online shoppers 8% one way or another on their purchases, why does it matter if the vendor has supposed "nexus" via affiliates or not? Why fire us? To keep it in the State's hands and responsibility to collect those online taxes?

    The whole thing makes me really wonder about those that pass laws 'round here. From what I remember, this entire Bill (which was many parts, not just the affiliate nexus stuff) was passed in only 30 HOURS from the moment it was presented.

    Sounds to me like some people didn't think this one through.

    Frustrating, to say the least.

    Jennifer
    ~PotPieGirl
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  • Profile picture of the author Troy_Phillips
    Actually all I have to pay is seven cents in my county for the fact I already have a brick and mortar here and a tax ID number.

    Since I already pay taxes as an established business I too wonder why those places refuse to do business with me as I am the one responsible for the taxes.
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  • Profile picture of the author Troy_Phillips
    No Jason .. don't stop. You are just getting to the good stuff lol.
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    • Profile picture of the author TheArticlePros
      [DELETED]
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      • Profile picture of the author PotPieGirl
        Originally Posted by JaRyCu View Post

        I still depend on my employment for some of my bills and peace of mind while I grow my online business -- if I say too much, said employment becomes endangered.

        Wait until after I quit, and then I'll give you ALL of my real thoughts.

        -- j
        Starting a "Help Jason Quit His Job" fund right now!

        And Holy Cr@p at the $19k per WEEK spent on sending out paper checks.... that....that makes me.... just speechless! (very unusual for me...lol!)

        Ya know, I try really hard to see the big picture when something happens that causes issue in "my backyard" - but this online tax/nexus thing makes no sense no matter HOW I look at it!

        I've even talked to some local politicians in office in my area who are friends of mine AND my representatives...and they are all like "yeah, we need that money - it's a great idea" (meaning from online sales/nexus stuff) and simply cannot hear what I am trying to tell them.

        In essence, they just passed a bill that could cause MORE Georgians to lose their jobs and need those paper checks (ok, direct deposits).

        Very frustrating.

        Jennifer
        ~PotPieGirl
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  • Profile picture of the author Sarevok
    All this talk of taxation gives me a warm fuzzy feeling.

    Can someone help me understand how anyone can claim tax on a private sale?

    Don't give me "But you're using public circuits to make the Internet connection feasible".

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    • Profile picture of the author Troy_Phillips
      Originally Posted by Sarevok View Post

      All this talk of taxation gives me a warm fuzzy feeling.

      Can someone help me understand how anyone can claim tax on a private sale?

      Don't give me "But you're using public circuits to make the Internet connection feasible".

      They have no problem sending you a bill each quarter ... on paper even.
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  • Profile picture of the author eddie jay
    sheeeesh ... well i guess that's it for me and amazon .... oh well back to trying with clickbank
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  • Profile picture of the author GeneralGadget
    Still no word from Amazon. No termination emails. No change in TOS.

    Nothing.

    The law went into effect 12/31/2012|1/1/2013.

    Something ain't right here.
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    • Profile picture of the author elliec
      I'm waiting too....still nothing. Anyone have any ideas?
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      • Profile picture of the author davidyair
        i live in ga. and would like to hear from anyone who has an update about amazon affiliates. The last comment here was months ago, and it is now july 11th. Am i going to get paid for any amazon sales or not? i was just about to start driving traffic to some pages when i heard about this nexus tax stuff here in ga. any updates?
        thanks,
        david
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  • Profile picture of the author dara60
    Could you please tell me more about Georgia Affiliates! Thanks in advance!
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