Georgia Affiliates - Proposed Nexus Law

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.

Thanks for sharing the information.

What is Georgia Affiliates???

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.

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.

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."

@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.

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

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.

No Jason .. don't stop. You are just getting to the good stuff lol.

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".

sheeeesh ... well i guess that's it for me and amazon .... oh well back to trying with clickbank

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.

Could you please tell me more about Georgia Affiliates! Thanks in advance!