Is Amazon Dropping Affiliates From Your State?

by raynman 95 replies
I just got this email and I'm wondering if anyone knows anything about it...
We regret to inform you that the North Carolina state legislature (the General Assembly) appears ready to enact an unconstitutional tax collection scheme that would leave Amazon.com little choice but to end its relationships with North Carolina-based Associates. You are receiving this e-mail because our records indicate that you are an Amazon Associate and resident of North Carolina.

Please note that this is not an immediate termination notice and you are still a valued participant in the Associates Program. All referral fees earned on qualified traffic will continue to be paid as planned.

But because the new law is drafted to go into effect once enacted – which could happen in the next two weeks – we will have to terminate the participation of all North Carolina residents in the Amazon Associates program on or before that same day. After the termination day, we will no longer pay any referral fees for customers referred to Amazon.com or Endless.com nor will we accept new applications for the Associates program from North Carolina residents.

The unfortunate consequences of this legislation on North Carolina residents like you were explained in detail to key senators and representatives in Raleigh, including the leadership of the Senate, House, and both chambers’ finance committees. Other states, including Maryland, Minnesota, and Tennessee, considered nearly identical schemes, but rejected these proposals largely because of the adverse impact on their states’ residents.

The North Carolina General Assembly’s website is North Carolina General Assembly - Home Page, and additional information may be obtained from the Performance Marketing Alliance at Performance Marketing Alliance.

We thank you for being part of the Amazon Associates program, and we will apprise you of the General Assembly’s action on this matter.


Sincerely,

Amazon.com
I don't make much from Amazon at all so I'm not too awfully worried about it but I'm wondering if this will have an effect on other affiliate sales. That would be bad.

Anyone know what this is about?
#main internet marketing discussion forum #afffiliate #affiliate #affiliates #amazon #amazoncom #anti-affiliate bill #antiaffiliate #bill #biz or address #carolina #closing #dropping #fight #hawaii #killing #laws #legislature #nexus #north #north carolina #program #relocate #shutting #state #stupid #tax #termination #tricks #virtual
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  • Profile picture of the author raynman
    This was in the link to the Performance Marketing Alliance...
    North Carolina
    Status: Nexus Legislation is probably part of the overall budget buried in the Senate tax bill, which may pass later in the month. However, the House is committed to not raising taxes of any kind. AB 178/ H 558 (the bill to modernize Sales Tax Stat/ Digital Goods) may have at one time had the e-commerce legislation in it, but it has been taken out and pooled with other tax issues in the budget package. The senate has been quiet on the specifics of what will be included in the package. They adjourn in early July. We will keep you posted on any action that might be needed by the affiliates, but for now, we are waiting for more information.
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  • Profile picture of the author Dennis Wagoner
    Hey Warriors,

    I just got an email stating Amazon will more than likely be dropping all North Carolina affiliates due to new NC regulatory laws.

    According to the email, the measure is supposed to go into action in two weeks, at which time all North Carolinians will be dropped from the program.

    Anyone else get a notification like this for their state?

    Dennis
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    • Profile picture of the author bellabee
      I received the same email. I have two questions

      1. Do you guys think this will also apply to other affiliate networks and/or Adsense?

      2. What if a person were to just change their contact address within Amazon/the other networks to a relatives addy in a different state? Not that I'd necessarily do this, but I'm just wondering.
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      • Profile picture of the author WritingMadwoman
        This happened to New York affiliates too. I was able to find an article that gives the details:

        New York Court Dismisses Amazon’s Objections To Paying State Taxes

        Wendy
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        • Profile picture of the author raynman
          Originally Posted by WritingMadwoman View Post

          This happened to New York affiliates too. I was able to find an article that gives the details:

          New York Court Dismisses Amazon’s Objections To Paying State Taxes

          Wendy
          ugh....thanks.
          Back in April, the New York State legislature passed a bill requiring Amazon to collect taxes from New York State residents even though it doesn’t have a physical presence in the state (the normal requirement for retailers). The state got around the physical presence requirement by counting affiliates as part of Amazon. Amazon (and Overstock) filed lawsuits seeking summary judgment against the State of the New York. Yesterday, a New York State judge dismissed those lawsuits, potentially throwing the case into the Court of Appeals.

          The question, though, is not whether Amazon should collect New York State taxes. It would be trivial for Amazon to do so during the checkout process for residents of New York. (Update: In fact, it’s been doing so since the law was passed last summer). The real issue is the way the law gets Amazon to do so by dragging its affiliates into it.
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  • Profile picture of the author liban
    I live in North Carolina, and I received the notice. My head must have been in the sand, but I knew nothing about this.

    Way too late, I'm firing off a letter to my State Senator. But it doesn't look good, does it?
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  • Profile picture of the author liban
    So - has Amazon dropped all New York affililates? If not, what's the difference between the legislation there and that here in NC?
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  • Profile picture of the author Michael Motley
    Originally Posted by OnlineMarketingSys View Post

    interesting hopefully other states wont follow
    Yeah, im sure they wont. I mean its not like the government just put us neck deep in debt and every state is looking for new revenue sources or anything .
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  • Profile picture of the author raynman
    how are they going to check to see if my residence is in NC? are they going to go check IP addresses or something>

    I just don't understand how they can do this. can i just change my residence to another state? i live in another one a few months out of the year anyway. what's to keep me from claiming that as my residence but still staying in NC most of the time?

    i just don't know how this is going to work. is it just a matter of checking Amazon's affiliates addresses?

    Are they going to stop sales to people in NC?

    Frustrating......
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    • Profile picture of the author new2ebiz
      Originally Posted by raynman View Post

      how are they going to check to see if my residence is in NC?
      Are they going to stop sales to people in NC?
      I got my notice in the email today.

      This is my guess as to how the logistics would work.
      Amazon will have your payment address for sales, the irs simply checks Amazon's list. When you fill out your income taxes they will know where you claim as your primary residence.

      This 'find what else we can tax' is likely to continue, as someone else pointed out, while states attempt to raise revenue to pay for services.

      Will send my opinion to the necessary politicians but am also looking into contacting a major news outlet to see what I can stir up. I live in a small town but it would seem a larger population center would be a better place to do that.
      As much as I might not like the news media today I don't feel bad about using them to help regular people make ends meet.

      One of the points I will make is the state ends up with less money because they lose the income tax they could have received because state residents don't make the money once made, because companies will not deal with NC business people anymore. Something along the line of 'cutting off your nose to spite your face' .

      It's just another heads up.

      And another example of why one should have multiple streams of income.

      Good luck to all.
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      • Profile picture of the author ExRat
        Hi bgmacaw,

        Quote:
        Originally Posted by ExRat
        Hi bgmacaw,

        Shrugs :confused:


        Atlas Shrugged - Wikipedia, the free encyclopedia
        My humour is obviously way too cryptic. I recognised your quote immediately, as I use it myself in the same context as yourself. The confused, *shrugging* smiley was meant to resemble someone who feels that 'there's something terribly wrong with the world.' Hence, why I thanked you (previously) for your ironic, but topical post.
        Signature


        Roger Davis

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        • Profile picture of the author bgmacaw
          Originally Posted by ExRat View Post

          Hi bgmacaw,

          My humour is obviously way too cryptic. I recognised your quote immediately, as I use it myself in the same context as yourself.
          I thought so but I wanted to let everyone else who was interested in on it.
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          • Profile picture of the author ladyshadowrider
            I got that email from Amazon also

            In doing some research this morning I ran across this webpage on the American Booksellers Association website that is a sample letter for their NC members to send to their senator in support of Senate Bill 487 claiming it will "level the playing field" for brick and mortar book stores. They are even more delusional than the lawmakers.
            ABA: Sample Letter to North Carolina Senator

            I also found the links where you can read the 2 bills that were put before the NC General Assembly

            http://www.ncga.state.nc.us/Sessions...PDF/S487v1.pdf

            http://www.ncga.state.nc.us/Sessions...PDF/H558v1.pdf

            There is also an active thread over at the ABestWeb forum about this and some participants are trying to get a group together to fight this.
            Add North Carolina Affiliate Tax - ABestWeb Affiliate Marketing Forum

            I'm in the Raleigh area with bull horn and picket sign ready!

            As for the question about the logistics of collecting sales tax...if this gets passed in NC, all internet based companies who have affiliates in NC will have to collect sales tax on ALL SALES MADE TO NC RESIDENTS regardless of whether or not those sales were made by an affiliate residing in NC because the law views companies having 1 or more affiliates within the state as a "nexus" or physical presence in the state.

            However, if the internet based company terminates their NC affiliates, they will technically no longer have a "nexus" in the state and will no longer have to pay NC sales tax on sales made to NC residents. This is why Amazon and OverStock tried to fight the NY sales tax law after they terminated all their affiliates in NY. Unfortunately, the greedy b@st@rds in NY didn't let Amazon and OverStock off the hook, so they terminated their NY affiliates for nothing.

            For more information about what a "nexus" is and why this whole mess is pretty much unconstitutional, you can read this article about Internet Sales Tax Fairness Internet Sales Tax Fairness | The New Rules Project

            I think you'll see that considering an affiliate to be a "nexus" is really stretching the interpretation of the word.

            HTH,
            Tamara
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            • Profile picture of the author KirkMcD
              Originally Posted by ladyshadowrider View Post

              Unfortunately, the greedy b@st@rds in NY didn't let Amazon and OverStock off the hook, so they terminated their NY affiliates for nothing.
              Amazon never dropped their NY affiliates. They started charging NY sales tax instead.
              It doesn't make sense that they aren't doing it for NC too.
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            • Profile picture of the author jacktackett
              Originally Posted by ladyshadowrider View Post

              I'm in the Raleigh area with bull horn and picket sign ready!
              Tamara,
              I'm in Cary and if you need someone to help make signs let me know!
              best,
              --Jack
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              Let's get Tim the kidney he needs!HELP Tim
              Mega Monster WSO for KimW http://ow.ly/4JdHm


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  • Profile picture of the author MichaelHiles
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    • Profile picture of the author raynman
      Originally Posted by MichaelHiles View Post

      good read. thanks.

      increase taxes during a recession = dumb

      tax the businesses more and make them move...it worked for California.

      Virginia and Tennessee are pretty close to where I am now and I spend a lot of time in South Carolina. It just makes sense to take my business elsewhere.
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  • Profile picture of the author Cash37
    If you have not heard, our state is the only one that is moving forward with the affiliate tax. Amazon is already going to be cutting ties with NC affiliates on or before the date the tax is enacted.

    Please look up your Senator here: North Carolina General Assembly - NCGA - Representation

    And send them a letter to let them know the mistake they are making!

    Subject: OPPOSITION to Senate Bill 487


    Dear Representative [Insert Last Name]:
    I am a small business owner with a website, and I am in strong opposition to Senate Bill 487, which would require retailers that advertise and receive direct or indirect referrals from advertising on websites, such as mine, to collect sales tax in North Carolina.



    I am opposed to this bill because it would substantially harm my small business by reducing a large source of revenue that I rely on to survive. This revenue results from providing advertising on my website on behalf of out-of-state retailers.



    If retailers believe that doing business with me will result in their having to collect sales tax on all North Carolina sales, they likely will sever ties with my business, putting the viability of my business at risk. Such was the case in New York State where Overstock dismantled its affiliates program and hundreds of other business followed Overstock’s example. This left thousands of affiliates – most of which are small- and medium-sized businesses with a major loss of income.


    For these reasons, I respectfully oppose this legislation.


    Sincerely,
    [Your Name]
    PLEASE TAKE 5 MINUTES FROM YOUR DAY TO DO THIS.

    I'm already looking to move ASAP.
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  • Profile picture of the author Cash37
    What else can we do? Is moving really the best option?

    Citizens Against Net Taxes has a map of all the states with internet taxes, only North Dakota is exempt.
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  • Profile picture of the author raynman
    I sent an email to my congress people.

    Hmmm....we are internet marketers. You think there is some way we can get the word out to other IMers and draw heat/attention to the state congress people and what they're planning to do?

    Might be a futile effort that results in my moving but I don't want that to happen.
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    • Profile picture of the author Cash37
      Originally Posted by raynman View Post

      I sent an email to my congress people.

      Hmmm....we are internet marketers. You think there is some way we can get the word out to other IMers and draw heat/attention to the state congress people and what they're planning to do?

      Might be a futile effort that results in my moving but I don't want that to happen.
      Maybe email the news stations too.
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      • Profile picture of the author Barbara Eyre
        So, basically, if passed - there will be no sense in North Carolina residents trying to be an affiliate for any company - because the company would have to charge NC sales tax on any purchases done in NC that were made via any affiliate link.

        So, NC would be cutting off another form of income for their residents ... so less money in circulation. Lovely! :rolleyes:

        Now, I know there aren't a heck of a lot of us in NC that is even on the internet (especially here in the Foothills) ... but still ...
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      • Profile picture of the author affenpinscher
        If you're looking for a new place to do business from, these states currently do not have any sales tax:

        Alaska, Montana, New Hampshire and Oregon.

        It's very likely affiliate programs besides Amazon will ban affiliates from states such as
        New York that are going to apply sales tax to affiliate sales in their states.

        Note: Delaware is a great state for incorporation. Although there's no sales tax on individuals, there is a gross receipt tax (with a highest rate of less than 2%) applied when certain thresholds are met. It might be worthwhile for some people to investigate this.
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  • Profile picture of the author CDarklock
    About twenty years ago, a bill was passed in North Carolina that essentially said men were not allowed to have erections ("a perceptibly turgid state").

    Why anyone still resides in this state is beyond me. The legislature is clearly insane.
    Signature
    "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 Jeff_Gardner
    The writing is on the wall.

    Amazon is dropping affiliates, because if they were to start paying sales taxes on all of the sales made by affiliates, all 50 states would quickly follow suite.

    Here's the problem: Amazon can't drop 100% of it's affiliates, so the States are putting the squeeze on them one state at a time. As more states enact this legislation, there comes a time when Amazon will agree to paying sales tax in all 50 states.

    However, this isn't new.

    I own a Network Marketing Company - and every "distributor" is considered a "Nexus". Meaning, the States believe that every distributor in our company is just a subsidiary of our company. Therefore, we're already set up to collect and pay sales tax on all sales. Our headquarters are in Texas - but if someone buys something in New York, we charge and pay sales tax to New York.

    A paperwork and filing nightmare?

    Yes. Fortunately, because of companies like ours (and soon, companies with affiliates), there are service providers who can calculate, file forms, and pay your taxes for you in all jurisdictions. Cheap? No. A pain? Absolutely. But it keeps us from dropping distributors in big states.

    Many states are moving toward a "Standardized Sales Tax" (SST) which makes it easier, but not all states are on this - and many states want to do their own thing.

    SO, look for companies with any affiliates to start paying sales taxes for all states in the next 2 to 5 years. I'd be surprised with the legislation going through state-by-step if it takes 5 years. More likely 2 to 3. We'll see.

    Anyway, if you've got affiliates, start preparing. Check out companies like Avalara, look into SST, and just do your due diligence before this comes. Because it is coming.

    Best,
    Jeff
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    • Profile picture of the author Cash37
      Originally Posted by Jeff_Gardner View Post

      The writing is on the wall.

      Amazon is dropping affiliates, because if they were to start paying sales taxes on all of the sales made by affiliates, all 50 states would quickly follow suite.

      Here's the problem: Amazon can't drop 100% of it's affiliates, so the States are putting the squeeze on them one state at a time. As more states enact this legislation, there comes a time when Amazon will agree to paying sales tax in all 50 states.

      However, this isn't new.

      I own a Network Marketing Company - and every "distributor" is considered a "Nexus". Meaning, the States believe that every distributor in our company is just a subsidiary of our company. Therefore, we're already set up to collect and pay sales tax on all sales. Our headquarters are in Texas - but if someone buys something in New York, we charge and pay sales tax to New York.

      A paperwork and filing nightmare?

      Yes. Fortunately, because of companies like ours (and soon, companies with affiliates), there are service providers who can calculate, file forms, and pay your taxes for you in all jurisdictions. Cheap? No. A pain? Absolutely. But it keeps us from dropping distributors in big states.

      Many states are moving toward a "Standardized Sales Tax" (SST) which makes it easier, but not all states are on this - and many states want to do their own thing.

      SO, look for companies with any affiliates to start paying sales taxes for all states in the next 2 to 5 years. I'd be surprised with the legislation going through state-by-step if it takes 5 years. More likely 2 to 3. We'll see.

      Anyway, if you've got affiliates, start preparing. Check out companies like Avalara, look into SST, and just do your due diligence before this comes. Because it is coming.

      Best,
      Jeff
      This is more about affiliates than merchants. You can just cut off affiliates. Its a LOT harder on us affiliates who make full time income to figure out what to do, which most likely will end up in a move to a new state.
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      • Profile picture of the author Jeff_Gardner
        Originally Posted by Cash37 View Post

        This is more about affiliates than merchants. You can just cut off affiliates. Its a LOT harder on us affiliates who make full time income to figure out what to do, which most likely will end up in a move to a new state.
        That's why we already register and pay sales tax in all 50 states. I'd rather go through the expense of setting up and paying sales tax - than dropping Associates who spent their own time, money, and energy building their business. It's not fair to affiliates to give them the opportunity to build a business (which many rely on for their full-time income) --- only to dump them unceremoniously.

        I think it's time for the merchants to either fight back - or get set up to pay sales tax in those states.
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    • Profile picture of the author CDarklock
      Originally Posted by Jeff_Gardner View Post

      As more states enact this legislation, there comes a time when Amazon will agree to paying sales tax in all 50 states.
      And those of us who really dislike this will just move to Oregon...
      Signature
      "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 liban
      Just talked to my Senator's office. They said the legislation is not on the calendar. The lady I spoke to wasn't familiar with the bill nor with affiliate marketing, so I filled her in. (And yes, I was very nice and polite, and used words she could understand. Pat me on the back.)

      There are a lot of us in NC, btw.

      And we live here because we have roots here, it is a GREAT place to raise a family, and it's our home.
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      • Profile picture of the author LIndaB
        And those of us who really dislike this will just move to Oregon...
        We may not have a sales tax, but that doesn't mean we have less taxes - they more than make up for it with property taxes and income taxes.
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  • Profile picture of the author Marian Berghes
    Im not affected by this but let me get this straight: If Amazon (or any other website that has an affiliate program) has to pay a tax for the commission that the affiliate would earn?

    Like if you now had 35$ commission on one product, for the seller to stay legal he would have to only pay you 25$ or something?

    I can't really understand what the tax is about,how much is it, and how does it apply to lets say a product launch? anyone care to explain please?
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  • Profile picture of the author clint48
    Just received notice that all North Carolina Residents will be terminated from the Amazon.com affiliate program, over state sales taxes.

    Clint
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  • Profile picture of the author jacktackett
    Wow - I didn't know there were this many fellow warriors in NC.

    First realize this is not a done deal - you need to contact your state senators and legislatures - you can look them up either at your local county's voter registration office or here:

    North Carolina General Assembly - Home Page

    There's also an online petition started to let the government know we're opposed to this potential legislation:

    Internet Marketers Against the NC Affiliate Tax - Petition Spot

    Remember, democracy is not a spectator sport....

    best,
    --Jack
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  • Profile picture of the author Cash37
    I'm so pissed right now.
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  • Profile picture of the author braver55b
    I just checked my bank balance and noticed that I got paid by Amazon and I would hate for this type of legislation to be passed here in the "Show me" state.

    NC could be making their state be seen as not a good place to do business in.


    If I got wind of something like that here, I would be contacting them and making a "stink" about it.
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  • Profile picture of the author Gail Sober
    Seems like legislation like this could really blur the lines between 1099'd independant contractors and employee.

    Does this mean the independant contractors in NC are not considered as having their own business? Will they become eligible now for workers comp, etc..?
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    • Profile picture of the author Cash37
      We are writing from the Amazon Associates Program to notify you that your Associates account has been closed as of June 26, 2009. This is a direct result of the unconstitutional tax collection scheme expected to be passed any day now by the North Carolina state legislature (the General Assembly) and signed by the governor. As a result, we will no longer pay any referral fees for customers referred to Amazon.com or Endless.com after June 26. We were forced to take this unfortunate action in anticipation of actual enactment because of uncertainties surrounding the legislation’s effective date.

      Please be assured that all qualifying referral fees earned prior to June 26, 2009 will be processed and paid in full in accordance with our regular referral fee schedule. Based on your account closure date of June 26, 2009, any final payments will be paid by September 1, 2009.
      In the event that North Carolina repeals this tax collection scheme, we would certainly be happy to re-open our Associates program to North Carolina residents.
      The North Carolina General Assembly’s website is http://www.ncleg.net/, and additional information may be obtained from the Performance Marketing Alliance at http://www.performancemarketingalliance.com/.
      We have enjoyed working with you and other North Carolina-based participants in the Amazon Associates Program, and wish you all the best in your future.

      Best Regards,
      The Amazon Associates Team
      **** **** ****.
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    • Profile picture of the author FSherrill
      I agree with the previous poster. The best course of action would be to set up an LLC in another state and then set up an Amazon account. By the way Delaware currently does not recognize "nexus" based on where the affiliate lives. And fortunately, Delaware does not have a state sales tax.
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      • Profile picture of the author Dredger
        Just got an email from LinkShare. The vote in North Carolina has been postponed for a couple of weeks. They are requesting that I send them a "letter to the governor" explaining how this proposed law will impact my business. They even provided a template. They are going to hand deliver it to the key leaders and the governor themselves. If you are a LinkShare affiliate, please check your emails and get your story to them ASAP so they can help.
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  • Profile picture of the author new2ebiz
    Got my notice from Amazon today.
    --------------------------------------------
    We are writing from the Amazon Associates Program to notify you that your Associates account has been closed as of June 26, 2009. This is a direct result of the unconstitutional tax collection scheme expected to be passed any day now by the North Carolina state legislature (the General Assembly) and signed by the governor. As a result, we will no longer pay any referral fees for customers referred to Amazon.com or Endless.com after June 26. We were forced to take this unfortunate action in anticipation of actual enactment because of uncertainties surrounding the legislation’s effective date.
    Please be assured that all qualifying referral fees earned prior to June 26, 2009 will be processed and paid in full in accordance with our regular referral fee schedule. Based on your account closure date of June 26, 2009, any final payments will be paid by September 1, 2009.
    In the event that North Carolina repeals this tax collection scheme, we would certainly be happy to re-open our Associates program to North Carolina residents.
    The North Carolina General Assembly’s website is http://www.ncleg.net/ , and additional information may be obtained from the Performance Marketing Alliance at http://www.performancemarketingalliance.com/ .
    We have enjoyed working with you and other North Carolina-based participants in the Amazon Associates Program, and wish you all the best in your future.

    Best Regards,
    The Amazon Associates Team
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    • Profile picture of the author melanied
      I wondered about that when this issue was coming up for California. A lot of "Super" Affiliates live in California, and it crossed my mind that fact might influence decisions.
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    • Profile picture of the author rtrotter
      Originally Posted by Steve Porcaro View Post

      I just contacted Amazon, New Yorkers are still welcome to join.

      Can it be based on numbers of affiliates? Maybe NY has more and they do not want to lose that revenue?

      Is the NC tax that much different than the NY tax? Like I said Overstock gave me the boot, but not Amazon.
      I think the reason they have not shutdown NY affiliates is to maintain they standing in the lawsuit.

      Rodney
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      • Profile picture of the author JDSalinger
        It is ironic these efforts to get tax money are back firing in these states as the big affiliate programs are just closing shop in those states. It is my understanding, Amazon has canceled the affiliate program in Hawaii, Rhode Island, North Carolina, and looks like New York will be as well pending the legislation.

        I would not be surprised to see a few more states added to this mix like California and a number of states in the Northeast like Massachusetts, Connecticut, Maine, etc. Basically, if you live in liberal tax state, you should be concerned about this.

        However, if the main companies like Amazon just keep canceling their affiliate programs in those states, other states may be less inclined to pursue this measure. After all, Amazon would be the major revenue generator from these taxes and if they are not in the picture, any taxes gained would be significantly limited. Also, Amazon seems to be gradually moving away from using affiliates as they have made changes that have hurt affiliates in the last year like not allowing affiliates to direct link in the US or put a uniform cap on referrals earned in the UK.

        Also, as mentioned some states are in much better shape financially than others. They have little incentive to start this type of tax and should have a greater business incentive to not tax as this can help bring in more business to their state allowing them to get more revenue from a pull strategy rather than a push strategy. This should actually create an opportunity for those states.

        For all those living in states that have or will likely see this change, I agree this type of tax is fundamentally unfair. It is terrible that you will have to pay for other people's excesses. If you are able to do so, you should strongly consider moving to more tax friendly states. I know this is not necessarily practical for everyone, but I fear there will be more taxes like these in the future. Sending letters to the legislators sounds noble and productive, but I fear they will not listen as past history has shown to be the case. The best thing people could really do in those states is vote for and help elect new people on the next election cycle who promise tax reform.
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  • Profile picture of the author confetti
    I'm located in Hawaii, and I got my termination email from Amazon last night. I wasn't even aware that this was happening. Even though the Gov. has already signed it, she still has till June 30 to veto it. I sent my email in to the Governor explaining how this will destroy my business and not make any money for the state. It's a lose-lose.

    As my IM business is still in it's infancy, I would not be able to afford to move to another state right away. (And why should I be forced to leave my home and my family just so I can survive?)

    My question is this: Can I really use a virtual mailbox address in Oregon (or some other affiliate friendly state). And operate my business temporarily from "Oregon"?

    I'm not trying to get out of paying taxes. I would even be willing to pay income taxes to both states, just so I could actually still have an affiliate marketing business.

    I've been wanting to go to the mainland and travel around (RV). That's the whole purpose for my internet business. I'm just not ready to have to do it this week!

    Even though I will be travelling all the time in my RV, I know I will have to choose a state as my domicile (and I can have only one). My voting, taxes, vehicle registrations, business - all has to be in one state. So I might as well choose that state now!

    I'll wait till Tuesday, to see if the Governor vetoes the bill. But I want to start lining up my ducks just in case. I guess there aren't that many affiliate marketers in Hawaii. Or they're probably all at the beach.

    Should I get an Oregon virtual address, and operate my business from there? Will that solve the problem (at least temporarily)?

    Aloha,
    Lisa
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  • Profile picture of the author pizzatherapy
    I live in Hawaii and got the same notice from Amazon that they would be dropping all affiliates that live in Hawaii.

    It seems the handwriting is on the wall as the Legistlation goes into law on July 1.

    I wrote to the Governor and other legistlators. I got no response...

    I do get a check fom Amazon each month so this will affect my Internet Business.

    If this affects enough affiliates in enough states, maybe Amazon will have to back down.

    Sounds like for Hawaii this is a done deal...Unless the Governor Vetoes this bill. With money to be made on an the Internet tax...there is not much chance of that...

    For now we will stand shoulder to shoulder with the residents of the Great State of North Carolina!

    Onward!
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  • Profile picture of the author ltdraper
    We got our termination notice today (NC), and to add insult to injury we got our last direct deposit yesterday for a fairly nice amount.

    I never got a response from either my state rep or senator. I think I'm going to look at what we made on the affiliate program this year and donate a substantial portion of that amount to whoever is running against them in the next election.
    Signature

    Nothing to see here, move along...

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  • Profile picture of the author ladyshadowrider
    Yep, I got my termination email from Amazon today as well (NC).

    Since Amazon has never been a big earner for me, it won't hurt my income much, but I will have to take the time to go thru all my websites and remove their ads!

    What ticks me off the most about the politicians is that instead of tightening the belt like the private sector has had to do during this difficult economic time, they are looking to dig their greedy hands even deeper into our pockets.

    I have been seeing some really great bumper stickers on cars around here lately...

    One said "Don't Steal, The Government Doesn't Like Competition" and another one said "Stop Repeat Offenders, Don't Re-Elect Them!"

    Tamara
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    • Profile picture of the author affenpinscher
      Some news media are reporting that Amazon is planning to appeal the New York state court decision. The sales tax, however, applied only to those affiliates who made more than $10,000 a year in sales. That may be why Amazon hasn't dropped New York (yet) as it applies to a small subset of affiliates.

      On the other hand, I believe the North Carolina bill has no sales threshold and applies to all affiliates in North Carolina. It also would make Amazon prices higher than those of online companies that don't have affiliates.

      It's sad and amusing that states are so stupid. Affiliates will simply 'operate' their business from tax friendly states or outside the USA or stop making money which means less money circulating in North Carolina. It's like the North Carolina legislature can't believe that anyone would do anything other pay a tax because they passed a bill.

      If you haven't, you should read about the cap-and-trade bill that the House of Representatives just passed. Basically, every business will have to account for, and be taxed on, any action that uses energy or produces CO2.

      If the bill passes in the Senate, expect more businesses to move manufacturing operations out of the US and expect more online businesses to 'operate' outside the US.

      How does driving people and businesses out of the US or out of business help get us out of the recession?
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      • Profile picture of the author Cash37
        Originally Posted by affenpinscher View Post

        Some news media are reporting that Amazon is planning to appeal the New York state court decision. The sales tax, however, applied only to those affiliates who made more than $10,000 a year in sales. That may be why Amazon hasn't dropped New York (yet) as it applies to a small subset of affiliates.

        On the other hand, I believe the North Carolina bill has no sales threshold and applies to all affiliates in North Carolina. It also would make Amazon prices higher than those of online companies that don't have affiliates.

        It's sad and amusing that states are so stupid. Affiliates will simply 'operate' their business from tax friendly states or outside the USA or stop making money which means less money circulating in North Carolina. It's like the North Carolina legislature can't believe that anyone would do anything other pay a tax because they passed a bill.

        If you haven't, you should read about the cap-and-trade bill that the House of Representatives just passed. Basically, every business will have to account for, and be taxed on, any action that uses energy or produces CO2.

        If the bill passes in the Senate, expect more businesses to move manufacturing operations out of the US and expect more online businesses to 'operate' outside the US.

        How does driving people and businesses out of the US or out of business help get us out of the recession?
        I want to know who exactly put that nexus language in the bill.
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        • Profile picture of the author Lanadili
          If these bills pass, Amazon won't be the only merchant that drops you as an affiliate. It happened in NY awhile back, and I'm sure the only reason Amazon didn't drop their NY affiliates is because they thought they could win the battle in court. Since that didn't happen (at least not yet - I think they are still trying), they are taking action to prove to the lawmakers that they are NOT going to pay this tax by dropping their affiliates instead.

          This is a direct hit to affiliates, because not only will Amazon drop you, but hundreds of other merchants as well. From people I know living in NY, it has affected about 70% of their affiliate income.

          Act now and protest these bills in your state! The more people who protest this, write in to their legislators, sign petitions, etc the better.
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        • Profile picture of the author ladyshadowrider
          Originally Posted by Cash37 View Post

          I want to know who exactly put that nexus language in the bill.
          Your elected officials twisting Constitutional law again! They are being pressured by offline retailers and retailers associations who believe that online retailers have an unfair advantage because they are not required to pay sales tax in states where they have no "physical presence."

          "In a 1992 decision, Quill v. North Dakota, the U.S. Supreme Court ruled that retailers are exempt from collecting sales taxes in states where they have no physical presence, such as a store, office, or warehouse. (The legal term for this physical presence is "nexus.") Although the case dealt with a catalog mail-order company, the ruling has subsequently been applied to all remote sellers, including online retailers."

          To read the full story go to...Internet Sales Tax Fairness | The New Rules Project

          The only way states can get around this Supreme Court ruling without an act of Congress is to declare that affiliates constitute a "physical presence" or "nexus" which is complete BS!

          EDIT:

          Someone has started an online petition against this legislation.

          Please, please, please go to this link http://www.petitionspot.com/petitions/ncaffiliatetax/

          Not only can you "sign" the petition, but you can leave a comment as well.

          Let your voice be heard! Tell your elected officials what you think and how this will affect your business.

          There is a link where you can read the bill and the pertinent pages are pages 268 and 269.


          HTH,
          Tamara
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  • Profile picture of the author affenpinscher
    An older thread described how Amazon has dropped affiliates in North Carolina and Hawaii because those states now require Amazon to collect sales tax on the sales of its affiliates who live in North Carolina and Hawaii.

    I was amazed at how many people replied that they didn't make much money from Amazon so it won't hurt them.

    People, the law is not the Amazon Sales Tax Bill, the law is the Affiliates Sales Tax Bill.
    It's been easier for those states to go after Amazon because it's big and easy for states to target since it has one headquarters/administrative office (in Washington state).

    California (what a surprise) has been attempting to enact the same type of law although Governor Schwarzenegger has pledged to veto the bill.

    Google Affiliate Network, Commission Junction, and LinkShare all dropped emails to their California affiliates about the law.

    Would you be hurt by no more Adsense?

    Basically, these laws require affiliate operators to collect sales tax even though the operator has no property or employees in the state. Affiliates are in effect being treated as stores.

    The question is what will be more effective for Amazon, Google and the others? To collect taxes (which vary by city, county and state) or to end affiliate sales? Maybe only have affiliates over certain dollar thresholds?

    Other states that have introduced some bill of this type in their legislature are Connecticut, Illinois, Minnesota, Tennessee, and Wisconsin.

    If you depend on affiliate sales including Adsense, you should educate yourself on this issue.

    P.S. I live in business friendly Texas so, personally, I'm more than happy to pick up the slack for those of you who get dropped by Amazon and the rest.
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    • Profile picture of the author pilotpair
      I wish we could shut down legislatures instead.
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    • Profile picture of the author new2ebiz
      It's a heads up for sure. As with many changes politicians envision will work one way, and unintentional (or not) consequences result in something else; you can put your two cents worth in and they do what they will anyhow. I contacted several TV channels and newspapers and sent several communications to the appropriate politicians. Hopefully a few of them read the WSJ which had a good article on the subject.

      Being in business requires adjustments to changing times. For those of us who have been in business for decades, I can remember a lot of items I once could take off for taxes and can't now.
      I wonder if this 'new' tax might result in a class action case of some sort?
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    • Profile picture of the author ladyshadowrider
      Thank you for your concern, but just to clarify, North Carolina has NOT passed this piece of legislation, yet! Dunno about Hawaii.

      Also, Adsense will NOT be affected by it, because, as you pointed out, it is a sales tax law and Adsense does not sell anything. Adsense commissions are paid on advertising fees collected.

      Even tho' you didn't mention this, it will not affect Ebay affiliates either, because Ebay does not sell anything. Ebay pays affiliate commissions on listing/selling fees collected and for new registrations.

      Now that's not to say these greedy, power-mad politicians won't figure out a way to tax advertising and service fees at some point.

      For now they are focusing on twisting the Constitution with their pretzel logic by claiming affiliates constitute a physical presence, even tho' "technically" they are not. A physical presence means a store, office or warehouse (i.e. a physical place where products are sold, shipped from or orders are processed).

      I don't know of any affiliates who process orders or ship products, do you? And, I wouldn't exactly consider a website or collection of websites with advertising on them to be a store, an office or warehouse either, but apparently the bloodsucking elected officials do.

      The people in office have already proven that they are gonna do what ever they want regardless of the impact it has on their constituents, their state and their country.

      Best way to deal with it is to VOTE THEM OUTTA THERE, one election at a time. Tell your family, tell your friends, tell your neighbors, tell anyone who will listen how their elected officials are screwing up and making things worse for everyone! Most people are completely oblivious to what's going on if it doesn't directly affect them.

      Tamara

      PS - Visit this site http://www.newrules.org/retail/rules...s-tax-fairness for more information about the Constitutional law they are breaking by passing this type of legislation. This legislation is being supported by offline retailers thru the various retailers associations who believe online retailers have an unfair advantage because they don't have to pay sales tax.
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      • Profile picture of the author writeonbro
        Cash37, this sounds like an issue where as many IM's need to get involved on the local level to let our legislatures know that we aren't taking this kind of crap from them any more!
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        • Profile picture of the author Dredger
          I'm in NC and just got the boot from Netshops through Pepperjam because of the law. I've been working on several websites. One I just launched Saturday that was doing great. Oh well. North Carolinians - check your inboxes.

          PS: They said if the law gets repealed, they'll welcome me back with open arms.
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  • Profile picture of the author confetti
    Looks like the "nexus" or "anti-affiliate" bill is going to be passed in Hawaii tomorrow. Amazon has already terminated me. Other companies that use affiliates may follow suit.

    I need to establish a virtual business in another State immediately.

    Do I just need a different address? Can I use a relative's/ friend's address in a non-nexus state? Or even a virtual mailbox physical street address? I know of one in Portland, OR.

    Or should I go the whole route of getting an LLC in Nevada or somewhere?

    I was just about to monetize a bunch of mini sites that I've started, but I am holding off till I know what to do.

    Thanks so much, I appreciate your assistance.
    Lisa
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  • Profile picture of the author Dana_W
    http://www.problogger.net/archives/2...orth-carolina/

    Just what we DON'T need these days - the government stepping in and preventing people from doing business!
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  • Profile picture of the author Dana_W
    This is so weird. I started a thread on this topic this morning - went to check to see if anyone had commented - and then found out that my thread had been eliminated, and had been rolled into this one!!!

    Anyway - I'm really sorry to hear that, Dredger. I wish there was somewhere for us to lobby to try to fix this, because it's got a lot of potential to hurt affiliate marketers.
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  • Profile picture of the author tranquility
    Yeah, I live in NY and I got dropped by Netshops last summer ... I was just starting to make some good sales, too. I think NY was one of the first to start the ball rolling.

    I've been wondering since then if any other states were going to follow suit.

    Sorry to hear about this.

    Debbie
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  • Profile picture of the author confetti
    I still need to know what to do to start another IM business in a non-nexus law State! My new topic got buried into this thread too.

    A friend mentioned that if I do a new sign up (with an address in a different state) with Amazon and all my other networks from the same IP address - they might catch on.

    Will this law affect ClickBank too?

    Somebody please answer!

    Thanks,
    Lisa - in Hawaii
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    • Profile picture of the author VideosYES
      Originally Posted by confetti View Post

      I still need to know what to do to start another IM business in a non-nexus law State! My new topic got buried into this thread too.

      A friend mentioned that if I do a new sign up (with an address in a different state) with Amazon and all my other networks from the same IP address - they might catch on.

      Will this law affect ClickBank too?

      Somebody please answer!

      Thanks,
      Lisa - in Hawaii

      I don't think this will affect ClickBank because most of ClickBank's products are information, not physical tangible goods. Who knows, these guys might find a way to rob us of these income opportunities also.



      DinhTa
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    • Profile picture of the author Dredger
      Yeah, Lisa
      I'm wondering about Commission Junction, LinkShare and all of the others. I haven't heard from them YET. What about it New Yorkers? Did everyone else follow suit and dump you too?

      I was putting the finishing touches on another site this morning when the emails started coming in. Days and days of market research, keyword research, getting the domain name, setting up the site all wasted.

      I guess that this is a good time to ramp up producing your own products imo. Time to review Jack Duncan and Allan Says posts, pick myself up, dust myself off and start again. Come on Warriors! Get to it! We're not going to let a little legislation from complete idiots get us down are we? We're Warriors, d@mn it!!!!!
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  • Profile picture of the author mywebwork
    I got my termination notice as well - it seem like Hawaii is on their hit list too. It gives me a link to Governor Lingle's web site, which is essentially useless.

    Maybe I should incorporate in Nevada instead!

    Bill
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    • Profile picture of the author Jacqui
      I'm from Rhode Island and just got the boot from Amazon and two CJ merchants.

      Thanks for the pep talk Dredger. You're absolutely right... can't let the (idiot) legislators defeat us. We're Warriors!

      Jackie
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      • Profile picture of the author Dredger
        You're right Jackie. As they say down South "they can kill ya, but they can't eat ya". I never quite understood what that meant, but it seems to apply here. Maybe we should adopt that as our new motto, lol. Greedy B@st@rds. Ah, well. No sales = no taxes to be collected. Smaaaaaaart.
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  • Profile picture of the author seasoned
    Yeah, I mentioned this elsewhere! Companies, like Amazon, are generally exempt from some taxes, because they don't have a presence. More and more idiots are considering AFFILIATES a presence. THAT means that by paying YOU, they now must have people in your state, county, etc... pay tax! That complicates things for EVERYONE, reduces profit/sales, and increases costs.

    bgmacaw is WRONG!!!!!!!!!! Tennessee was apparently the FIRST state to TAX THE INTERNET!!!!!!! Taxes are to be on TANGIBLE products, and a few other things, NOT pure services! Tennessee decided to tax SERVICES! I did work for a national ISP once, and tennessee was the ONLY place where they had to pay tax!!!!!


    Steve
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  • The Government is really going to step in and mess things up big time and sooner than later. Think FTC and Blogging... Think New York and Taxes... they all want a piece of that pie. And with budgets in crisis and tax revenues falling you can expect more of this than less.

    If you are making good money with Amazon and you are in NC... your best option is to start a corporation in a more Tax Friendly State (Think Nevada... hint hint hint),and move your business "presence" and then you can just keep going along.

    Nevada is very business friendly... but there are other choices.
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    • Originally Posted by InternetMarketingIQ View Post

      If you are making good money with Amazon and you are in NC... your best option is to start a corporation in a more Tax Friendly State (Think Nevada... hint hint hint),and move your business "presence" and then you can just keep going along.

      Nevada is very business friendly... but there are other choices.
      There was much discussion about moving when this issue 1st hit New York last year and it was determined by attorneys and others that incorporating in another state would not work.

      HAWAII affiliates - The Governor is supposedly close to vetoing the tax bill, so keep the pressure on. Amazon stated in their letter if the bills were vetoed or repealed they would open back up to affiliates.

      Lots of other merchants are already terminating affiliates in affected states. Hopefully this madness stops and other states learn how futile it will be to follow with more unconstitutional tax bills.

      Waiting on the edge of my seat to find out what CA decided to do and if the nexus part of the budget passes.
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  • Profile picture of the author MarketPacer
    I just listened to News Talk Radio and they had one of the big guys from overstock on and he was explaining how upset he was about having to drop affiliates. I think it is inevidable that other states will adopt this and is only the beginning to opening a door to all of us who make money through affilaite marketing. It is time to step up and talk with local legislators and start getting the right people in office. I live in NC and this is CRAP!
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  • Profile picture of the author Shaka
    This is very scary stuff. With all states scrounging around for revenue to cover budget shortfalls, is any affiliate really safe?
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  • Profile picture of the author BigBlueSky
    Government spends too much money on bailouts.
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  • Profile picture of the author lisaann
    I hadn't heard of this before now. But let me see if I understand this ... hopefully someone will reply.

    So if you're an affiliate for a merchant, the merchant has to pay a certain amount of tax on all sales coming from your link based on which state you live. Why on earth wouldn't it be that the merchant pays taxes based on where they live? Or they pay taxes based on where the person who buys lives? I thought the later was how this proposed internet sales tax was supposed to work.

    Thoroughly confused,

    Lisa
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    • Profile picture of the author cimbah
      I'm still trying to wrap my head around the logic behind this new law. Affiliates are not selling products, they're simply marketing them. When a product is sold as a result of their marketing efforts, they are paid an advertising fee or referral bonus in the form of a commission. Affiliates have no storefronts, no physical inventory, and they don't ship products from their residence or place of business.

      If a company places an ad in a magazine and I see that ad and go to the company's website and purchase their product, is the magazine responsible for collecting sales tax? No, because the company paid the magazine for the advertising. Well, it's the same with affiliates - companies are paying them for advertising their products.

      I really don't get it. I live in Pennsylvania and I hope it doesn't jump on this crazy bandwagon!
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      • Profile picture of the author EdKirby
        I'm from "Rogues Island", (Rhode island, but we call it that because of the crooks running this state) and I got the news from both Amazon and a PepperJam advertiser. Luckily I don't base my income on these two. I feel for those that do!

        Nonetheless, I can't believe the decisions that these numb skulls in Providence have been making over the last couple of years and this is the latest in a string of really stupid actions by the governor and the general assembly to grab money from the wrong places.

        "Hey, I got an idea lets tax the crap out of legitimate small businesses or anyone they do business with, now that we've drained everyone else's pockets" And the downward spiral continues...

        I'm no economist, and apparently neither are they, but it would seem to me that the more they stifle commerce online or off the less money there will be in the 'system' for others.

        My fear is that affiliate marketing is going to be dead to me now. If Amazon and NetShops dropped me then who is going to be next in line?

        Oh well, maybe it's time to move to New Hampshire.
        Signature

        Ed

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      • Profile picture of the author Dredger
        Their rational is that this type of affiliate marketing gives us an unfair advantage over the brick and mortar stores, who, no doubt have highly paid lobbyists, so they are trying any trick they can to "level the playing field". We just moved to NC three months ago, so had no say in who the elected officials were. But, I can guarantee, if we stay in this state, that we will come next election time.

        Now, a word about lobbyists. My brother used to be a lobbyist, so I know about the inner workings of that business. On his desk was a beautifully done plaque, that instead of saying director or vice president, it said "Please don't tell my mother that I'm a lobbyist. She thinks that I'm a piano player at a whorehouse". No offense to the world's oldest profession, lol.
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        • Profile picture of the author EdKirby
          I can understand the requirement to collect sales tax for sales made within the state but it's ridiculous to try to get to these big companies by making a connection via it's affiliates. All they end up doing is hurting the affiliate and everyone earning a living and might I say paying income taxes in those states. No sales = no income tax.

          I'd like to know when these legislators are going to pull their heads out of their butts to see the light of day for once and actually take a look at the big picture for a change.

          For years people have been leaving RI in droves looking for greener pastures whether for business reasons, better opportunities and a lower cost of living. This is only going make matters worse. What are they going to do as more and more of their tax base disappears? Cut more programs? Raise taxes on the poor slobs that can't leave?

          It's also pretty sad when the Governor gets booed at the Special Olympics here in RI.

          As far as we're concerned, we're a creative lot and we'll overcome this latest obstacle. I hope.

          Taking a more active role in voting out these clowns should be priority for any business owner at re-election time.
          Signature

          Ed

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