Unless something is done, its over for NC Affiliates

RebeccaL

15 years ago

Time to move to another state/country perhaps?

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Josh Anderson

15 years ago

Amazon is cutting off all its NC affiliates as well:

http://www.news-record.com/content/2...ith_affiliates

A pretty good article on the issue. In this case Amazon was making the move to avoid liability and send a message to NC before being forced to collect and pay illegal taxes like they are being force to collect and pay in NY.

If the state you are in creates unconstitutional laws just to try and collect more taxes you might be better off moving.

What we really need to hope for is for the Amazon vs NY case to make it to the Supreme court and set some precedent on this and put these unconstitutional moves by money hungry state legislatures to bed once and for all.

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discrat

15 years ago

Originally Posted by Josh Anderson

Amazon is cutting off all its NC affiliates as well:

Amazon cuts relationships with N.C. affiliates : News-Record.com : Greensboro & the Triad's most trusted source for local news and analysis

A pretty good article on the issue. In this case Amazon was making the move to avoid liability and send a message to NC before being forced to collect and pay illegal taxes like they are being force to collect and pay in NY.

If the state you are in creates unconstitutional laws just to try and collect more taxes you might be better off moving.

What we really need to hope for is for the Amazon vs NY case to make it to the Supreme court and set some precedent on this and put these unconstitutional moves by money hungry state legislatures to bed once and for all.

I wholeheartedly agree !! Just treat it like a job relocation for any of you BIG Hitters out there whose family rely on this for thier Living.
Thats the way you might want to look at it. Of course there are many other options out there as far as Affiliate Networks !

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Jagged

15 years ago

Affiliate markting is definately taking a swift kick in the shins these days...

Moving is not a long term answer....wont be long until all states follow suit....

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Marian Berghes

15 years ago

Man this sucks, really reconsidering my dream to move to the us if stuff like this keeps happening.

Just gives me a sense of insecurity...today you have an income, tomorrow you don't.

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3 replies

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Josh Anderson

15 years ago

Originally Posted by Marian Berghes

Man this sucks, really reconsidering my dream to move to the us if stuff like this keeps happening.

Just gives me a sense of insecurity...today you have an income, tomorrow you don't.

The beauty of the US is that you are free to create multiple streams of income so that you do not have all your eggs in one basket. You are also free to move.

If you were running a successful business as an Affiliate and that was your bread and butter the decision would be simple...

Bye Bye NC and hello new home in a state with legislators that adhere to the constitution.

Moving is not a long term answer....wont be long until all states follow suit....

Hopefully not. Its unconstitutional. So if Amazon wins the pending case against New York it could turn the tides.

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K2SMedia 15 years ago

Originally Posted by Josh Anderson

Bye Bye NC and hello new home in a state with legislators that adhere to the constitution.

This simply doesn't exist. Seriously.

This country is.... ugh. It stressed me out just thinking about it.

I'm ready for a different country, that's for sure.
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- seasoned 15 years ago
  
  Originally Posted by K2SMedia
  
  This simply doesn't exist. Seriously.
  
  This country is.... ugh. It stressed me out just thinking about it.
  
  I'm ready for a different country, that's for sure.
  
  Most other countries make it HARDER to become a citizen! I already checked many.
  
  Besides, as far as military and economic intelligence, it seems like the ONLY country that still exists, and is ironically more like the US was SUPPOSED to be than the US, is SWITZERLAND!
  
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bgmacaw 15 years ago

Originally Posted by Marian Berghes

Man this sucks, really reconsidering my dream to move to the us if stuff like this keeps happening.

Unfortunately, we're working hard to become what your country was 30 years ago.
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freedomguy

15 years ago

Originally Posted by Marian Berghes

Man this sucks, really reconsidering my dream to move to the us if stuff like this keeps happening.

Just gives me a sense of insecurity...today you have an income, tomorrow you don't.

Hey man, stay there and maybe we'll come and join you instead! It seems the 'good ol' USA is becoming as oppressive as UK to us small entrepreneurs. Or maybe we could all club together and buy our own offshore island someplace and set up an internet tax haven.

Ah, well! We can dream :rolleyes:

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GarrieWilson

15 years ago

Prime example of why people need to know pending laws and bills looking for sponsors/cosponsors so you can stop silly laws like this BEFORE they are passed.

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Trader54

15 years ago

Originally Posted by GarrieWilson

Prime example of why people need to know pending laws and bills looking for sponsors/cosponsors so you can stop silly laws like this BEFORE they are passed.

Sounds like lately most laws and bills are passed without the members even reading them, some deals have been so big they haven't even had the time.

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thegoddessofeleven 15 years ago

Is there some sort of petition available to sign to contest laws like this? It may be too late for NC, but our livelihoods depend on our squashing this before it spreads further. It makes me so angry that they can pass a law and, poof!-- perfectly legitimate business models are no longer an option.
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bgmacaw

15 years ago

Go to Amazon and send this book as a gift to your looters, err, representatives in the state legislature:

Amazon.com: Atlas Shrugged: Ayn Rand: Books

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jacktackett 15 years ago

Originally Posted by bgmacaw

Go to Amazon and send this book as a gift to your looters, err, representatives in the state legislature: Amazon.com: Atlas Shrugged: Ayn Rand: Books

Sucks big time - I was preparing a blog to host a daily affiliate product - now poof, have to rethink it. Looking to move the business (not my family - I really like NC) to another place.

There are several other threads on this topic here in the forum as well - please read those and sign the petitions and send/call your representatives to let them know how you feel.

Personally - I think the law is NOT going to generate any new tax revenue but it is going to cost folks money.

I try to teach my kids there are repercussions for your actions - wish our elected civil serpents, er servents (or as Robert Heinlein referred to them - civil masters) would get a clue.

Alas bgmaca - if having our elected leaders read a book could fix the problem - I'd send every member of congress a copy of "The Rise and Fall of the Roman Empire". As someone much wiser than me once said - those who ignore history are doomed to repeat it.

peace,
--Jack
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Marian Berghes

15 years ago

Still sucks abit tho

And for me its gonna be HARD to move to the US, I got only 2 options: either win the green card lottery or invest $500.000-$1.000.000 in some area of the US that has a bad local economy.

So it is/will be a GIGANTIC decision for me, and I don't wanna mess up

Ontopic: You could either move or try and find other companies that are still offering affiliate programs.

Thanks
3 replies

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John Durham

15 years ago

Originally Posted by Marian Berghes

Still sucks abit tho

And for me its gonna be HARD to move to the US, I got only 2 options: either win the green card lottery or invest $500.000-$1.000.000 in some area of the US that has a bad local economy.

So it is/will be a GIGANTIC decision for me, and I don't wanna mess up

Ontopic: You could either move or try and find other companies that are still offering affiliate programs.

Or get an invitation to the U.S. by making a business deal with a U.S. corporation. They can send you an invite for legal entry.

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Marian Berghes

15 years ago

Originally Posted by kadensnga

Or get an invitation to the U.S. by making a business deal with a U.S. corporation. They can send you an invite for legal entry.

Yeah but that only allows me to stay for 3-6 months as far as I know, and I can't work or make any kind of subscription for a cell phone number for example.

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1 reply

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John Durham

15 years ago

Originally Posted by Marian Berghes

Yeah but that only allows me to stay for 3-6 months as far as I know, and I can't work or make any kind of subscription for a cell phone number for example.

Ah. I see. What if the corporation invited you here to work? Would that make a difference?

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Creative Thinker

15 years ago

I am in India and I have (had) a dream of moving to the US. Now I guess I have to reconsider. There are many things happening there which repels me (sorry US guys).

Originally Posted by Marian Berghes

Still sucks abit tho

And for me its gonna be HARD to move to the US, I got only 2 options: either win the green card lottery or invest $500.000-$1.000.000 in some area of the US that has a bad local economy.

So it is/will be a GIGANTIC decision for me, and I don't wanna mess up

If you are single, getting married to a US girl is the easiest option as of now

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1 reply

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cypherslock

15 years ago

Originally Posted by Creative Thinker

I am in India and I have (had) a dream of moving to the US. Now I guess I have to reconsider. There are many things happening there which repels me (sorry US guys).

If you are single, getting married to a US girl is the easiest option as of now

Well yes, just make sure you LOVE her first, then think about the business. The other way around is asking for big time trouble.

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YseUp

15 years ago

Originally Posted by Marian Berghes

Still sucks abit tho

And for me its gonna be HARD to move to the US, I got only 2 options: either win the green card lottery or invest $500.000-$1.000.000 in some area of the US that has a bad local economy.

So it is/will be a GIGANTIC decision for me, and I don't wanna mess up

Ontopic: You could either move or try and find other companies that are still offering affiliate programs.

Dude why do you want to move to the US? It's not the land of milk and honey portrayed on TV and in the movies.

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CDarklock

15 years ago

Like many other professions before them, the affiliate marketers will now learn that it is really not so hard to pick up and move to another state when the work disappears.

Half-arsed suggestion: incorporate. Put your corporation in another state. Now you get to live in NC, but your company - the affiliate - is in some other state that doesn't have this problem.

It might work. I don't know. I'm not a lawyer, and I'm drunk.

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melanied

15 years ago

That's HILARIOUS!

Originally Posted by CDarklock

I'm not a lawyer, and I'm drunk.

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GarrieWilson

15 years ago

Originally Posted by ptone

IMHO, what makes this stupid beyond belief is this:
Imagine that someone living in Texas goes searching for the latest digital camera. He comes across an affiliate's site that lives in NC. He clicks a link for the camera he likes and buys that camera. So, a Washington state-based company sells an item to a resident in Texas and NC thinks it has a right to collect sales tax on this transaction? WTH are they thinking? They are already getting money from this transaction anyway because the affiliate has to pay income tax from his affiliate commissions. What greedy jackasses.

It doesn't work like that. They only collect and pay taxes for purchases made from NC residents not if a NC affiliate is the referral.

Originally Posted by ~Davor Debrecin~

But, IMHO Amazon and other companies wouldn't make a decision like this one (terminating affiliate agreements) if the government financed (or helped in some way) the new additional costs Amazon and other companies now face.

The costs are deducted as a tax credit when you file taxes.

If they told them that they will create a special software for them that would track the amount of sales tax they need to pay,

Amazon already has it. They just need to add another tax code. 10 minutes of work.

That's not the point though.

1. It's unconstitutional.
2. It would reduce Amazon sales for NC.

or that they will organize a special department that will help all companies implement the new system,

Yeah. Just what we need. Another organization.

The more the government reduced the hassle for these companies, the better!

The LESS the government does, the better.

If affiliates create a nexus then so does advertising.

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Marty S

15 years ago

I would be feeling very stressed right now if I wasn't Canadian. Still something to keep a close eye on though.

It reminds me of the US legislation a few years ago which banned online poker, only to create 2 mega sites, Full Tilt and Poker Stars which operate offshore.

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Nightengale

15 years ago

Given the recession, you'd think government would be doing everything possible to encourage entrepreneurship instead of killing it.

Their timing is impeccable, I must say.

Michelle

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Daniel Brock

15 years ago

Originally Posted by Nightengale

Given the recession, you'd think government would be doing everything possible to encourage entrepreneurship instead of killing it.

Their timing is impeccable, I must say.

Michelle

Their aim is to destroy entrepreneurship, not encourage. Gives the average man a chance to earn power...which they don't want.

All I can say is, what a retarded bill - they have essentially just shut down thousands of businesses (and im sure many of which paid their taxes). So they will only be losing money in the long run.

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Cash37 15 years ago

Originally Posted by Marty S

It reminds me of the US legislation a few years ago which banned online poker, only to create 2 mega sites, Full Tilt and Poker Stars which operate offshore.

We have a winner.
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ptone

15 years ago

Originally Posted by GarrieWilson

It doesn't work like that. They only collect and pay taxes for purchases made from NC residents not if a NC affiliate is the referral.

Are you sure?

Because if that were the case then NC would just require that all purchases from NC residents be taxed whether it was made because of an NC affiliate or not. In which case, Amazon would stop selling items to all NC residents or start collecting the sales tax. Also, what would be the point of canceling affiliate contracts in NC if this were the case?

Right? What am I missing here?

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Tom B

Banned 15 years ago

Originally Posted by ptone

Are you sure?

Because if that were the case then NC would just require that all purchases from NC residents be taxed whether it was made because of an NC affiliate or not. In which case, Amazon would stop selling items to all NC residents or start collecting the sales tax. Also, what would be the point of canceling affiliate contracts in NC if this were the case?

Right? What am I missing here?

NC residents are suppose to pay taxes on their online purchases. It is called a "Use Tax". I doubt many do pay those taxes which is why the states want companies, such as Amazon, to start collecting them.

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ptone

15 years ago

Originally Posted by Thomas Belknap

NC residents are suppose to pay taxes on their online purchases. It is called a "Use Tax". I doubt many do pay those taxes which is why the states want companies, such as Amazon, to start collecting them.

But where do the affiliates come in? I still don't understand why Amazon would cancel affiliates' contracts if the NC gov't wants Amazon to collect sales tax on NC residents' purchases. I'm sure there are plenty of NC residents that make Amazon purchases by going directly to Amazon's website.

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Tom B

Banned 15 years ago

Originally Posted by ptone

But where do the affiliates come in? I still don't understand why Amazon would cancel affiliates' contracts if the NC gov't wants Amazon to collect sales tax on NC residents' purchases. I'm sure there are plenty of NC residents that make Amazon purchases by going directly to Amazon's website.

Why deal with the headaches of collecting the taxes for each state? That could cost them millions in software changes to implement that on a state level. Each state has different sales taxes.

They don't get majority of their sales from affiliates so why put that time and money into software changes. It is easier and less expensive to cut all affiliates from the state.

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braver55b

15 years ago

Amazon did it and now Cafepress. North Carolina is going to make itself known as a state that is not friendly to business.

I'm glad I don't live there. North Carolinians need to rise up and contact their representatives.

Its probably a way for the state to get increased sales tax revenue as more and more people do their shopping online.

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4morereferrals

15 years ago

Most representatives in govt need to be contacted cranially with a blunt object. Contacting them is a farse - they are so insulated from responsibility anymore. 45% of the sheeple are hosing this country for the rest of the 25% who actually produce and/or want to produce something of value.

Originally Posted by braver55b

Amazon did it and now Cafepress. North Carolina is going to make itself known as a state that is not friendly to business.

I'm glad I don't live there. North Carolinians need to rise up and contact their representatives.

Its probably a way for the state to get increased sales tax revenue as more and more people do their shopping online.

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Bruce NewMedia

15 years ago

This is part of the statist's dream come true.

Tax everything that moves in the state.

Extract tariffs, fees and taxes from any entity, even if the business is not even located in the state. ...and pay no heed to the local business damage done.

Businesses are of no real importance to the statist/leftist thinking. All the state cares about is bleeding businesses dry to pay for the non-productive.

However, there will be some states that do not tax internet sales no matter what the others do, .....just not many. And I'm not sure it's predictable who.

_____
Bruce

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Cash37

15 years ago

It won't be long until the merchants are forced to pay taxes on affiliate networks that have affiliates in these states.

Moving won't help. Several other states are watching this, and if NC goes along with this UNCONSTITUTIONAL tax, they will be jawing at the bit to recover some of their state debt with this BS tax.

I do understand that Amazon among others can simply charge taxes on orders from our links, but the margins are so slim on affiliate commissions that it isn't even worth it to setup the accounting to track it.

Such a sad few weeks for AM. It really looks to be over within the next 6 months. I enjoyed having my own business while it lasted. At least I can feel the brick and motar shops pains now as I dust off my resume.

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CDarklock 15 years ago

Originally Posted by Steve Porcaro

I am not always so sure about just moving, what about roots in the community, fighting for your home values that America was built on.

You can move your company without moving yourself. Just get a registered agent in the company's "home" state.
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- Tom B Banned 15 years ago
  
  Originally Posted by CDarklock
  
  You can move your company without moving yourself. Just get a registered agent in the company's "home" state.
  
  It doesn't work that way otherwise everyone would be setting up shop in Nevada where there is no state tax.
  
  If you are actively running your business from NC but have a company based out of Nevada than you are still going to be paying taxes in NC.
  
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Eric Lorence 15 years ago

Just get a mail drop in a neighboring state, UPS box, or something similar.

Too minor of an issue to just give up...
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- CmdrStidd 15 years ago
  
  Well, there is one option to moving. Set up a mail drop. It is simple to do. All you do is contact UPS and tell them you need a mailbox in another state but you want that mail forwarded to your home residence. UPS has PO Boxes in many of their stores and for a small fee they will forward that mail anywhere in the US for you. Voila, your problem is solved. You keep your affiliate programs while keeping the house, garage, wife, kids, well, maybe not the wife. Just kidding.
  
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Tsnyder

15 years ago

Incorporate in Nevada... no state income tax the last time
I checked and plenty of mail drop services who will receive
and forward your mail... or set up a bank account in a Nevada
Bank... have checks direct deposited and access the money
with a debit card.

Tsnyder

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Cash37

15 years ago

Originally Posted by Tsnyder

Incorporate in Nevada... no state income tax the last time
I checked and plenty of mail drop services who will receive
and forward your mail... or set up a bank account in a Nevada
Bank... have checks direct deposited and access the money
with a debit card.

Tsnyder

I need details on all of this. What banks do you recommend, what companies drop, etc.

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AllAboutAction 15 years ago

Originally Posted by Cash37

I need details on all of this. What banks do you recommend, what companies drop, etc.

I recommend Earth Class Mail (sorry, can't post links). They have receiving locations in many states, and will open and scan your mail for you so you can view it online. I'm a happy customer and have been for some time.
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mr2monster

15 years ago

Originally Posted by Tsnyder

Incorporate in Nevada... no state income tax the last time
I checked and plenty of mail drop services who will receive
and forward your mail... or set up a bank account in a Nevada
Bank... have checks direct deposited and access the money
with a debit card.

Tsnyder

beat me to it.

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mr2monster

15 years ago

Time for a Nevada state corporation and a P.O. Box....

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billyboy

Banned 15 years ago

[DELETED]

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ptone

15 years ago

Originally Posted by billyboy

explain it to me like a 5 year old...what are they doing?

Having 3 young children, I have experience with this...so, I'll give it a whack.

Once upon a time, the brainless people that run the NC government decided that they wanted to raise some money to pay for their frivolous spending habits.

Since NC has a difficult time collecting sales tax on items sold over the Internet, they thought it would be really smart if they forced companies like Amazon to collect sales tax on any items sold as a result of an affiliate of Amazon that lives in NC providing that sale. In other words, a NC resident that is also an Amazon affiliate runs a website that directs visitors to Amazon. He/she then makes a sale because of this. BAM - NC gets some money.

Amazon says they do not want to deal with the hassles of having to collect sales tax for NC, so they simply terminated the contracts with all affiliates living in NC.

The End.

IMHO, what makes this stupid beyond belief is this:
Imagine that someone living in Texas goes searching for the latest digital camera. He comes across an affiliate's site that lives in NC. He clicks a link for the camera he likes and buys that camera. So, a Washington state-based company sells an item to a resident in Texas and NC thinks it has a right to collect sales tax on this transaction? WTH are they thinking? They are already getting money from this transaction anyway because the affiliate has to pay income tax from his affiliate commissions. What greedy jackasses.

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~Davor Debrecin~

15 years ago

Wow, this is really a stupid decision from the NC government.

But, IMHO Amazon and other companies wouldn't make a decision like this one (terminating affiliate agreements) if the government financed (or helped in some way) the new additional costs Amazon and other companies now face.

If they told them that they will create a special software for them that would track the amount of sales tax they need to pay, or that they will organize a special department that will help all companies implement the new system, then these companies wouldn't suffer 100% of those additional costs. The more the government reduced the hassle for these companies, the better!

And then Amazon would not made the decision they made.

Or maybe they still would because this is really an unfair and greedy decision these governments have made, so..

Maybe if every state in the US decides the same, than Amazon will be forced to make the changes they need. But I don't believe this will happen.

Take care,

~Davor

Originally Posted by ptone

Once upon a time, the brainless people that run the NC government decided that they wanted to raise some money to pay for their frivolous spending habits.

Since NC has a difficult time collecting sales tax on items sold over the Internet, they thought it would be really smart if they forced companies like Amazon to collect sales tax on any items sold as a result of an affiliate of Amazon that lives in NC providing that sale. In other words, a NC resident that is also an Amazon affiliate runs a website that directs visitors to Amazon. He/she then makes a sale because of this. BAM - NC gets some money.

Amazon says they do not want to deal with the hassles of having to collect sales tax for NC, so they simply terminated the contracts with all affiliates living in NC.

The End.

IMHO, what makes this stupid beyond belief is this:
Imagine that someone living in Texas goes searching for the latest digital camera. He comes across an affiliate's site that lives in NC. He clicks a link for the camera he likes and buys that camera. So, a Washington state-based company sales an item to a resident in Texas and NC thinks it has a right to collect sales tax on this transaction? WTH are they thinking? They are already getting money from this transaction anyway because the affiliate has to pay income tax from his affiliate commissions. What greedy jackasses.

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Dredger 15 years ago

The Internet portion of tax bill 202 has been postponed for a couple of weeks according to an email I just received from LinkShare. If you are a LinkShare affiliate, they are asking you to compose a "letter to the governor" detailing how this proposed law will impact your business. They even furnish a template. They will hand deliver these letters to the key leaders and the governor. We may have just been given a break. Let's all do our part and get those letters to LinkShare.
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seasoned

15 years ago

Originally Posted by ptone

IMHO, what makes this stupid beyond belief is this:
Imagine that someone living in Texas goes searching for the latest digital camera. He comes across an affiliate's site that lives in NC. He clicks a link for the camera he likes and buys that camera. So, a Washington state-based company sells an item to a resident in Texas and NC thinks it has a right to collect sales tax on this transaction? WTH are they thinking? They are already getting money from this transaction anyway because the affiliate has to pay income tax from his affiliate commissions. What greedy jackasses.

Actually, I think they just want online business to be more like brick and mortar, and tax theem ACCORDINGLY! It is actually ILLEGAL for a state to do what you are saying. It could be considered a duty, and the constitution forbids that between the states. ALSO, TEXAS will want a cut, and that amounts to double taxation, ALSO illegal. Then again, unconstitutional never stopped the government for long.

Steve

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mywebwork

15 years ago

This stupidity has also spread to Hawaii - I received my Amazon letter a few days ago.

Amazon Drops North Carolina and Hawaii Affiliates - 5 Star Affiliate Blogs

Amazon Terminates Hawaii and North Carolina

I used to do affiliate marketing but fortunately I've moved on to other things now, so this isn't going to impact me as much as it will other marketers here. Still the idea of incorporatuing in Nevada is looking better every day.

Bill

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nicholasb

15 years ago

or switch to product creation

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billyboy

Banned 15 years ago

[DELETED]

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Dredger 15 years ago

I watched the press conference on this yesterday. The spokesman for the new "law" said that they also intend to go after back taxes on this as well. By the way, if you go to the government website, there is no mention of this in Bill 202. They cover the new rules for dog owners and the raise in parking fees at the airport, but not one word about the Internet tax. Of course, that was yesterday, they may have posted something today. They kind of make it up as they go along. Can't find anything anywhere that says the "Governor" actually signed this into law.
P.S. check out my last url in my sig before I have to take it down. It's CJ, still haven't heard from them yet. Anybody want to make an offer on a brand spanking new website? It went live last Saturday.
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hiphil

15 years ago

In the UK it is possible to rent a business address in a different part of the country. This service is offered by secretarial and/or business service companies. So you can have your business address in a city hundreds of miles from where you live.

Is this service available in the US? (Try Googling "accommodation address" , "mail box service", "business services" etc.)

Or you might be able to find someone willing to provide this service for you (another Warrior perhaps).

If you can have your business address in another state, then you might be able to get round silly laws in your own state.

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Shaka

15 years ago

Thank you everyone for your thoughts. Now I have a headache and want to get drunk (and I dont' drink!)

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Russ Reynolds

15 years ago

Any of you guys who want to get out of the US can trade me.

I'll go live in San Diego where it is warm and diversify my business and focus more on product creation instead of affiliate stuff.

I am not saying that you shouldn't fight this at all but I wouldn't be in a big hurry to get out either.

BTW - I really am trying to move to San Diego and have spoken to an immigration lawyer - it is not impossible. Can anyone recommend a good quiet area near the ocean for a family?

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AnneE

15 years ago

I also don't understand Amazon's logic. Why did they cut ties with NC affiliates for NC considering a law that they compare to NY's law. But Amazon still has NY affiliates (I'm one of them).

I also don't understand why they would be trying to tax affiliate commissions but not purchases made by people in NC? Shouldn't the taxable/not taxable decision be based on the location of the purchaser and the buyer? Usually for state tax to be owed, both have to be in the state. Not sure what the affiliate has to do with anything? Does anyone understand (even if they disagree) with the logic?

Also Delaware has no sales tax. You will notice TONS of companies are incorporated in Wilmington, Delaware.

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GarrieWilson

15 years ago

Originally Posted by ptone

Are you sure?

Yes.

Because if that were the case then NC would just require that all purchases from NC residents be taxed whether it was made because of an NC affiliate or not.

They can't - yet.

The NC government is saying an affiliate is a representative of the company which creates a Nexus in the state. Like having an office, wharehouse, etc.

Also, what would be the point of canceling affiliate contracts in NC if this were the case?

Amazon might sell more in NC than affiliates bring in so collectig tax would reduce their income.

Originally Posted by AnneE

I also don't understand Amazon's logic. Why did they cut ties with NC affiliates for NC considering a law that they compare to NY's law. But Amazon still has NY affiliates (I'm one of them).

Amazon is currently sueing NYC over the issue. Wait and see if they continue.

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ptone

15 years ago

Originally Posted by GarrieWilson

Amazon might sell more in NC than affiliates bring in so collectig tax would reduce their income.

Ok, I think I get it now.

If Amazon cancels the affiliates' contracts, then it no longer has any "locations" in NC...at least in the NC gov't eyes. Therefore, it does not have to collect sales tax.

It has nothing to do with affiliates making sales (which is what I thought), it only has to do with their physical location.

The reason they are keeping NY affiliates is because they decided to fight that state in court, but they are not going to fight every state. In other words, they plan to take the New York case to federal court and to the Supreme Court if necessary. Any decisions there should override state law if its found to be unconstitutional.

Do I have it now? Because now it makes sense.

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GarrieWilson

15 years ago

Originally Posted by wyomble

Well, services still aren't taxable so you may see some companies providing a product for "free" by selling a service such as a lifetime membership to a website that lets you download the product...

There is always a loophole

Memberships are taxable.

Originally Posted by ptone

If Amazon cancels the affiliates' contracts, then it no longer has any "locations" in NC...at least in the NC gov't eyes. Therefore, it does not have to collect sales tax.

Correct. In NYC they had to make $10,000 (i think total) to be considered.

The reason they are keeping NY affiliates is because they decided to fight that state in court, but they are not going to fight every state. In other words, they plan to take the New York case to federal court and to the Supreme Court if necessary. Any decisions there should override state law if its found to be unconstitutional.

Do I have it now? Because now it makes sense.

Yup. But it will only overturn NYC law BUT set a precident (sp) for future battles.

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seasoned

15 years ago

Originally Posted by AnneE

I also don't understand Amazon's logic. Why did they cut ties with NC affiliates for NC considering a law that they compare to NY's law. But Amazon still has NY affiliates (I'm one of them).

I also don't understand why they would be trying to tax affiliate commissions but not purchases made by people in NC? Shouldn't the taxable/not taxable decision be based on the location of the purchaser and the buyer? Usually for state tax to be owed, both have to be in the state. Not sure what the affiliate has to do with anything? Does anyone understand (even if they disagree) with the logic?

Also Delaware has no sales tax. You will notice TONS of companies are incorporated in Wilmington, Delaware.

Actually, MANY states now REQUIRE that sales tax is paid for all taxable products purchased by people in that state. They want the PURCHASER to provide the information on their tax returns. But HOW do you enforce it? They CAN enforce sellers more easily than the purchasers.

Companies are incorporated in Deleware because it is EASIER, CHEAPER, and they have better laws for incorporation. That was COMMON KNOWLEDGE when I was a kid! MA and NV are two OTHER places that now have somewhat similar reputations. And BOTH of them have sales tax! ALSO, Deleware is NOT the only state to have no sales tax.

Steve

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AnneE 15 years ago

Originally Posted by seasoned

ALSO, Deleware is NOT the only state to have no sales tax.

Steve

I didn't say it was.

Originally Posted by GarrieWilson

The NC government is saying an affiliate is a representative of the company which creates a Nexus in the state. Like having an office, wharehouse, etc.

Ah, thanks. At least I now understand the logic, even if I think it is flawed.
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wyomble

15 years ago

Well, services still aren't taxable so you may see some companies providing a product for "free" by selling a service such as a lifetime membership to a website that lets you download the product...

There is always a loophole

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seasoned

15 years ago

One more thing. I am probably paying over $400/month to some vendors of products that I can NOT easily get elsewhere! The last few things I bought from amazon I could NOT get from any bookstore. I currently like about 2 blocks from a BIG bookstore. They DON'T have it! That business would be LOST if I couldn't do ecommerce! ALAS, nobody understands MY predicament. SO, if the affiliate gets 10%, the state LOSES say 2% of ALL sales In a FEEBLE attempt to try to get 6% of LOCAL sales. And HOW do they determine WHAT sales are local anyway? And WHAT is the chance that over 30% of all sales are local?

Steve

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GarrieWilson

15 years ago

Originally Posted by seasoned

One more thing. I am probably paying over $400/month to some vendors of products that I can NOT easily get elsewhere! The last few things I bought from amazon I could NOT get from any bookstore. I currently like about 2 blocks from a BIG bookstore. They DON'T have it! That business would be LOST if I couldn't do ecommerce! ALAS, nobody understands MY predicament. SO, if the affiliate gets 10%, the state LOSES say 2% of ALL sales In a FEEBLE attempt to try to get 6% of LOCAL sales. And HOW do they determine WHAT sales are local anyway? And WHAT is the chance that over 30% of all sales are local?

Steve

It's ALL sales in NC. Not just referred sales if the company meets the requirements.

Your local big store could have ordered it.

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seasoned 15 years ago

Originally Posted by GarrieWilson

It's ALL sales in NC. Not just referred sales if the company meets the requirements.

I KNOW! THAT is what REALLY makes it STUPID, and I said they risk ALL state sales for trying to do this, etc...

Originally Posted by GarrieWilson

Your local big store could have ordered it.

NO THEY COULDN'T! That would be too much trouble, and it may arrive when I am LONG GONE! I simply DO NOT DO THAT! and what of items that AREN'T sold in stores? HECK, I have a doctor's test that it was VERY important to have done every year. It was two YEARS before I could have it. I dropped TWO doctors because I simply couldn't be there.

Steve
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Jagged

15 years ago

States Plot New Path to Tax Online Retailers - WSJ.com

More on the topic...

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ltdraper

15 years ago

Anyone thinking of taking the advice offered here to simply incorporate in another state and set up a mail drop in order to run an affiliate site from inside NC needs to talk to a lawyer instead of taking legal advice from the internet.

As a foreign corporation (created in another state) you still have to qualify to do business in NC. You have to have a registered agent in the state. You still have operations in NC. The fig leaf of the mail drop may not protect you. You could be defrauding both your affiliate partner by misleading them about your location and the state in a scheme to avoid the collection of taxes. Read up on RICO. It applies to more than just mobsters.

It sounds fairly similar to what was going on in Oregon a few years ago. It seems a number of people had the same idea to set up a mail drop for their vehicle registrations to avoid sales tax: Oregon Department of Justice - 2007 Media Release Didn't work out so well.

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seasoned

15 years ago

Originally Posted by ltdraper

Anyone thinking of taking the advice offered here to simply incorporate in another state and set up a mail drop in order to run an affiliate site from inside NC needs to talk to a lawyer instead of taking legal advice from the internet.

As a foreign corporation (created in another state) you still have to qualify to do business in NC. You have to have a registered agent in the state. You still have operations in NC. The fig leaf of the mail drop may not protect you. You could be defrauding both your affiliate partner by misleading them about your location and the state in a scheme to avoid the collection of taxes. Read up on RICO. It applies to more than just mobsters.

It sounds fairly similar to what was going on in Oregon a few years ago. It seems a number of people had the same idea to set up a mail drop for their vehicle registrations to avoid sales tax: Oregon Department of Justice - 2007 Media Release Didn't work out so well.

I realize you said the same thing, but I was going to say this after reading your first sentence. If you incorporate in another state, that corporation has a presence in YOUR state! If another corporation does business with you to sell, THEY technically have a presence there! SO, incorporating in another state does NOT change anything.

THINK ABOUT IT! If I were WRONG, you wouldn't have to incorporate, because amazon, etc... ALREADY are! Why would you think it would work for YOU if it doesn't work for them?

Corporations are STILL required to collect tax where they have a presence. HECK, at least SOME states, like callifornia, do NOT recognize foreign corporations for tax purposes UNLESS they are registered as a foreign corporation IN THAT STATE! That means they actually FORBID you to COLLECT, or charge, sales tax. That sounds good, RIGHT!?!?!? WRONG!!!!! They will NOT allow you to sell taxable goods unless you charge sales tax! So it is ILLEGAL, in california, to sell physical goods from a california presence unless you are:

1. A SOLE PROPRIETOR.
2. A partnership
3. A CALFORNIA CORPORATION or similar.
4. A FOREIGN corporation REGISTERED in california as a foreign corporation or similar,

So, EVEN THEN, you have to effectively be incorporated in that state.

Steve

Steve

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Tsnyder

15 years ago

Originally Posted by ltdraper

Anyone thinking of taking the advice offered here to simply incorporate in another state and set up a mail drop in order to run an affiliate site from inside NC needs to talk to a lawyer instead of taking legal advice from the internet.

As a foreign corporation (created in another state) you still have to qualify to do business in NC. You have to have a registered agent in the state. You still have operations in NC. The fig leaf of the mail drop may not protect you. You could be defrauding both your affiliate partner by misleading them about your location and the state in a scheme to avoid the collection of taxes. Read up on RICO. It applies to more than just mobsters.

It sounds fairly similar to what was going on in Oregon a few years ago. It seems a number of people had the same idea to set up a mail drop for their vehicle registrations to avoid sales tax: Oregon Department of Justice - 2007 Media Release Didn't work out so well.

Incorporating is more than just setting up a mail drop.

A corporation is a separate legal entity from your person... it is
a person for all legal intents and purposes. And, of course you
should seek legal advice for legal questions...

Tsnyder

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Rob Anderson

15 years ago

online is supposed to be universal.
i think the whole point of the internet is to open everything up globally.
obviously local legislators do not think so.
i personally came up against a bad one yesterday.
i cannot use paypay as a merchant.
paypal thinks that south africans are criminals.
now how the hell do i get past that one?
maybe the big powers that be should hook up with the UN or something

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seasoned

15 years ago

Originally Posted by Rob Anderson

online is supposed to be universal.
i think the whole point of the internet is to open everything up globally.
obviously local legislators do not think so.
i personally came up against a bad one yesterday.
i cannot use paypay as a merchant.
paypal thinks that south africans are criminals.
now how the hell do i get past that one?
maybe the big powers that be should hook up with the UN or something

It isn't payppal, it is the credit industry, and many ARE!

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Carl-Reed

15 years ago

Register a LLC in another state in a virtual office and put yourself on payrole as an administrator

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Trader54

15 years ago

What this will all lead up to will probably be a excuse for the government to take more control over the internet. Then there will be a tax on everything. I'm sure they are just waiting for a reason they can sell to the majority. In the disguise of some how protecting the little guy.

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Kanani K

15 years ago

Hawaii just vetoed the bill! All the pressure made our governor veto the internet sales tax so fortunetly were safe for now here in the islands

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CarolinaInvestor

15 years ago

Greetings from the peoples republic of NC! Hey they have already run off most of the other business in NC why not get rid of all the taxable income from internet busineses too! With all the rocket scientists in our legislature, we should just move NASA here. Man, I have never watched a state go backwards as fast as this state. Its amazing that they dont get it. I have watched business after business go to SC because I think all NC wants to keep is tourisim and hog farming (not that i dont like good pork barbeque). Ahhhhhhhhhhh!

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mikkosant 15 years ago

Would clickbank ever have to do what amazon is doing?
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jvwinwin

15 years ago

From what I read, it is indeed a most wise decision not to put all eggs in one basket... no matter where you live! Nobody knows what's going to happen next... especially on the internet when things are just moving super fast.

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jacktackett

15 years ago

NC is looking to get more in SALES tax from NC folks buying things from Amazon, not so much from affiliates.

Right now on our income tax forms NC Residents are suppose to fill in how much they spent on out of state taxable goods and remit the tax to the state.

Guess how many residents do that?

By transferring the responsibility of collecting the tax to the vendor - they figure (and probably rightly so) that is will be easier to get the money that way than via the honor method now.

This has nothing to do with income tax. If you make money you need to pay the tax man - after deducting your expenses of course. Its all about 'recovering' lost sales tax.

Personally its a nightmare because each individual counties and municipalities in NC have their own sales tax rates and the items that are tax changes. So to an out of state vendor they not only have to track which state you're from, but in NC (I don't know about other states) they would have to track which county and city you're from as well, calculate the tax, fill out the forms, and then remit the money.

Luckily the Supreme Court - as others have said here - said you only have to collect sales tax if you have a 'nexus' in the state. NC and other states are trying to 'GAME' the system to say an independent contractor/commissioned sales person constitutes a presence in the state - thus obligating the vendor (Amazon) into collecting and remitting sales tax.

Highly convoluted eh?

What our looterslatures don't realize is now Amazon is removing the criteria of 'Nexus' so now the State will not collect sales tax from amazon - and several hundred of its Citizens will lose a part time (and sometimes full time) income - and of course the income tax that money would have generated.

go figure.....

--Jack

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CarolinaInvestor

15 years ago

Originally Posted by jacktackett

Personally its a nightmare because each individual counties and municipalities in NC have their own sales tax rates and the items that are tax changes. So to an out of state vendor they not only have to track which state you're from, but in NC (I don't know about other states) they would have to track which county and city you're from as well, calculate the tax, fill out the forms, and then remit the money.

I understand from a friend that sells product from his site in NC that he just has to pay a flat 7% tax for internet sales. I asked specifically because I have to deal with that sorting through 100 counties to figure each and every different tax rate periodically with my B&M company. Go figure they actually made it simple for the internet...Not really normal for our government here in NC.

Originally Posted by jacktackett

What our looterslatures don't realize is now Amazon is removing the criteria of 'Nexus' so now the State will not collect sales tax from amazon - and several hundred of its Citizens will lose a part time (and sometimes full time) income - and of course the income tax that money would have generated.

Actually I think you will find SC improving its base of internet companies. I have heard many companies are finding ways to move the company to SC. All they really need is an address and to incorporate there - and thats cheaper! We really dont have the brightest stars in the sky working in our legislature. Oh but its fair...

As Ross Perot would have said, "That giant sucking sound you here is NC income tax heading to SC."

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Michael Motley

15 years ago

why couldnt you register your company as an LLC in another state, like deleware or vegas which is very cheap (around $100) and but put your contact info in sc? wouldnt you technically be a deleware or NV company?

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Unless something is done, its over for NC Affiliates

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