11 {{ upvoteCount | shortNum }}
11 {{ upvoteCount | shortNum }}

Only in California- Goodbye Amazon Affiliate Program

by Patrician
10 replies
  • OFF TOPIC
    • |
(Letter received from Amazon Associates Program)

Hello,

For well over a decade, the Amazon Associates Program has worked with thousands of California residents. Unfortunately, a potential new law (SIGNED INTO LAW JUNE 29,2011) that may be signed by Governor Brown compels us to terminate this program for California-based participants. It specifically imposes the collection of taxes from consumers on sales by online retailers - including but not limited to those referred by California-based marketing affiliates like you - even if those retailers have no physical presence in the state.

We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.

As a result, we will terminate contracts with all California residents that are participants in the Amazon Associates Program as of the date (if any) that the California law becomes effective. We will send a follow-up notice to you confirming the termination date if the California law is enacted. In the event that the California law does not become effective before September 30, 2011, we withdraw this notice. As of the termination date, California residents will no longer receive advertising fees for sales referred to Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com. Please be assured that all qualifying advertising fees earned on or before the termination date will be processed and paid in full in accordance with the regular payment schedule.


I am done being loyal to california - i am going to incorporate in nevada tomorrow, and will hence pay no self employment tax, a lower federal income tax rate, and absolutely not one dime of income tax to california ever again.

Thank you commy brown.

I should have done this long ago -

This is so ludicrous in a state where there are no jobs and millions are unemployed -to now make sure they can't earn an income from Amazon - AND WHO KNOWS WHAT NEXT?


KMA,

SHEEZA

CITIZEN OF USA, INC.
  • Profile picture of the author ThomM
    Conn. passed a similar law aimed at Amazon so you won't be alone.
    "Amazon" Tax. Certain remote sellers, including such online retailers as Amazon.com and Overstock.com, who have no physical presence in Connecticut, must now collect sales tax on their taxable sales in the state. The requirement applies to sellers who pay commissions to people located in Connecticut who refer customers to them.
    Signature

    Life: Nature's way of keeping meat fresh
    Getting old ain't for sissy's
    As you are I was, as I am you will be
    You can't fix stupid, but you can always out smart it.

    {{ DiscussionBoard.errors[4174131].message }}
  • Profile picture of the author seasoned
    Remember when I said that I incorporated in NV, and CA PULLED my sales/use tax permit, and they gave me some garbage about filing as a FOREIGN corp in CA?

    Well, a friend told me HE is incorporated in NV, and filed as a foreign corp in CA.

    He asked me if I thought he would be subject to this garbage. I told him that since I believe that since the foreign corp filing states clearly that his corporation has a presence in CA, that I think he IS subject to it. I doubt I am wrong there. BTW, he said the foreign corp filing effectively feels like a corp filing since it costs as much, etc... I guess the only advantage for the corporation is to make sure all taxes are paid, and that it is clear that they extend to that state.

    Anyway, if you are selling taxable stuff in CA, as a VENDOR, you could be in trouble! If you do it as another entity, make SURE they are 100% SEPARATE and have a good reason for being so. If you do it as an Alien NV corp, you are breaking the law, and may be summoned to court on a WHIM! SERIOUSLY, they LOVE summoning such people to court!

    IANAL, but I DO have some experience here.

    BTW Affiliates are SUPPOSED to be INDEPENDENT SALES PEOPLE! There are MANY reasons why vendors want to make that clear and, if you read the fine print, MANY companies, INCLUDING AMAZON, make that VERY clear! They have for over a DECADE! Some B&M have made that clear for MANY DECADES. *I* think states like CA are trying to break that veil and basically say you are EMPLOYED as a sales person, giving the company a presence in the state.

    If you buy a product to sell it, and do, or something of that nature, you ARE considered a business and DO have a presence in that state. And THAT is what I mean by sell as a vendor.

    Steve
    {{ DiscussionBoard.errors[4174241].message }}
    • Profile picture of the author myob
      Besides California, there are five other states that have passed the nexus tax law. But being incorporated you will still have to pay an annual fee to the California Equalization Board of $800 as an alien entity. In addition, any money you pull out of your business is taxable income to California.
      {{ DiscussionBoard.errors[4175424].message }}
  • Profile picture of the author Patrician
    I doubt whether I will still sell for Amazon - I just started a new Amazon business less than a week ago - So no, I can see how being a NV corp but a CA resident will probably not work because Amazon won't collect taxes from the customers online (that is the issue).

    The issue to me is lowering my taxes since I needed the extra income to help cover my taxes from my regular income. Since they have taken this ability away then I have to do it a different way.

    Rest assured I will do everything legally - I never incorporated in CA because of the yearly fee being more than I would save and I will see what they say at the IRS about this issue AND the CA Franchise Tax Board.

    Thanks for the advice Steve.

    p.s. Wyoming might be a better choice than Nevada -

    p.s.s. Speaking to NV - Specifically NV C-Corps - as long as you have a Nevada address (agent) and a Nevada bank account, you are not subject to the foreign corp california blood money requirement.

    Nevada does not report to 1040 - however you would still pay all Federal taxes - just at a reduced rate without the self-employment tax and the higher tax rate % - difference of over 20% --

    California has no right to touch anything that is in another state. You are effectually with a NV C-Corp a 'stockholder' in a Nevada corporation and all income etc would be paid to the Corporation. So again as long as the bank account receiving the money is in NV, you are not liable to California.

    They will still get us with the sales tax on everything imaginable. So I will not be living here for free.

    However yes I can see what you are saying if you are still a CA resident and selling affiliate products you would not be 'under the radar' - I make very little if anything from affiliate products - my business is services. This is just 'fun money' -

    I am just so aggravated because I just started an Amazon business a week ago and it had great promise as the proverbial 'passive income'.

    I have a call into my Tax Accountant for the last word on what is legal and if this is even feasible - Right now I am so mad at the way MY TAX MONEY is being spent in California - not to mention all the bogus new taxes Commy Brown is bringing forth, that I may just move to another state and that will settle the matter.

    (take everything I say with 'a grain of salt' since I am extremely PEEVED right now - when I calm down and decide whether this is going to cost more than it is worth, that will be the real story.)
    Signature

    Patricia Brucoli
    Plug-In Profit Site Helpdesk

    {{ DiscussionBoard.errors[4175507].message }}
    • Profile picture of the author seasoned
      Originally Posted by Patrician View Post

      I doubt whether I will still sell for Amazon - I just started a new Amazon business less than a week ago - So no, I can see how being a NV corp but a CA resident will probably not work because Amazon won't collect taxes from the customers online (that is the issue).

      The issue to me is lowering my taxes since I needed the extra income to help cover my taxes from my regular income. Since they have taken this ability away then I have to do it a different way.

      Rest assured I will do everything legally - I never incorporated in CA because of the yearly fee being more than I would save and I will see what they say at the IRS about this issue AND the CA Franchise Tax Board.

      Thanks for the advice Steve.

      p.s. Wyoming might be a better choice than Nevada -

      p.s.s. Speaking to NV - Specifically NV C-Corps - as long as you have a Nevada address (agent) and a Nevada bank account, you are not subject to the foreign corp california blood money requirement.
      Basically, a corporation is treated LEGALLY like a retarded kid that has a huge trust fund. As the CEO, etc... you are to be the GUARDIAN of it, making choices, etc... If you think about it, it is EXACTLY the same thing. If that kid does something wrong, burns a building, etc... YOUR income is SAFE! The same is true of a corporation. SO, states have let us do things like incorporate in another state. CA does NOT want a california resident selling in california if they aren't going to pay ALL taxes. One way they do this, ironically, is to PREVENT you from paying sales tax! YEP, YOU HEARD ME! They STOP you from paying tax so you pay MORE! They tried that garbage on ME! I told them I was incorporated in NV, and they pulled my sales tax permit, so I couldn't charge or pay the sales tax. They ONLY allow claifornia registered corporations, or residents, to collect/pay sales tax. Because of that, they INSISTED that I pay for the CA registration and corporate taxes. If not, they would send me to court for not paying the taxes that they prevented me from paying. If I managed to collect them, they would send me to court for collecting sales tax I wasn't allowed to pay!

      HEY, that brings up an interesting point. Wouldn't AMAZON need to register and pay taxes for that?

      Nevada does not report to 1040 - however you would still pay all Federal taxes - just at a reduced rate without the self-employment tax and the higher tax rate % - difference of over 20% --

      California has no right to touch anything that is in another state. You are effectually with a NV C-Corp a 'stockholder' in a Nevada corporation and all income etc would be paid to the Corporation. So again as long as the bank account receiving the money is in NV, you are not liable to California.
      ACTUALLY, it is ILLEGAL to have a NV corporation without listing the people in 5 positions. Failure to do so can mean REVOCATION of the corporation! OH, ONE person can hold all five positions, but there MUST be at least ONE! That means you are MORE than a mere stock holder. AND, as a california resident, california deems you liable in ALL they deem you liable for!

      I'll never forget the time that they told me that I owed them tax on ALL income derived from california and THEREFORE, I owed them MORE tax! I wrote them back a letter saying that it was a GOOD thing that I did NOT follow their law because not ONE penny came from california, and I paid them based on what I earned.

      Or how about the time that they INSISTED that I attend jury duty, OR ELSE!? I told them that it would endanger my job, and cost me a lot and they had NO jurisdiction ANYWAY, since I moved THOUSANDS of miles away from california the year before.

      I never heard back on either letter!

      They will still get us with the sales tax on everything imaginable. So I will not be living here for free.

      However yes I can see what you are saying if you are still a CA resident and selling affiliate products you would not be 'under the radar' - I make very little if anything from affiliate products - my business is services. This is just 'fun money' -

      I am just so aggravated because I just started an Amazon business a week ago and it had great promise as the proverbial 'passive income'.

      I have a call into my Tax Accountant for the last word on what is legal and if this is even feasible - Right now I am so mad at the way MY TAX MONEY is being spent in California - not to mention all the bogus new taxes Commy Brown is bringing forth, that I may just move to another state and that will settle the matter.

      (take everything I say with 'a grain of salt' since I am extremely PEEVED right now - when I calm down and decide whether this is going to cost more than it is worth, that will be the real story.)
      YEAH, I KNOW! I'll NEVER forget the special .5% earthquake tax they added(as I recall, it was earthquake), and it was supposed to be for like 5 years. They extended it AGAIN and AGAIN and AGAIN. The whole thing is a joke. Like the old lotto saying "Our SCHOOLS win TOO!"! YEAH RIGHT!

      Steve
      {{ DiscussionBoard.errors[4177897].message }}
      • Profile picture of the author Roaddog
        Steve,
        funny you should use that analogy of it (corp.) being like a kid.

        When I had my corporation (brick and mortar) I often referred to it as "being like you were tattling on yourself to the IRS", with the quarterlies I had to do.
        Except for the 800.00 bucks I paid Cali every year, it usually worked out ok for me.

        They can tear 'sub C's' apart if they wish tho, I've seen it done (not to me).

        They aren't as much protection as some think (sub c's)


        Yea Patrician, I received mine yesterday, first the 'if they pass' one, then just a few hours later Oh, they signed it ...BYE.

        Did I really miss something or was that really fast and a little unforeseen?

        The multiple little streams of income are slowly being whittled away...
        Signature
        KimW a Fellow Warrior Who Really Needs Help
        Ken Strong Cancer Donation | Keep Ken Strong WSO





        {{ DiscussionBoard.errors[4177955].message }}
  • Profile picture of the author Patrician
    Well Steve - I wouldn't be selling anything directly (my own products) or charging sales tax so that much I don't need to worry about.

    Now I won't even be selling for Amazon as an affiliate - and the problem California had with them was they don't charge customers sales tax online. That is the crux of the argument and why, rather than to charge tax, Amazon just kicked California affiliates to the curb.

    I just took my site down and still waiting for the tax guy to call me back so I can see if it is feasible to say: "I'm not going to work on Maggies Farm No More".

    ... with that said I think the issue is huge for online business - as Amazon calls them 'Big Box Retailers' - they are feeling the loss to their bottom line from online businesses and this is just one small gesture for them to keep their monopolies and force the 'little guy' out.

    I think it is a black day.

    If a fly comes through here I will rip his wings off.

    (just kidding, I would only spray him).
    Signature

    Patricia Brucoli
    Plug-In Profit Site Helpdesk

    {{ DiscussionBoard.errors[4177952].message }}
    • Profile picture of the author seasoned
      Originally Posted by Patrician View Post

      Well Steve - I wouldn't be selling anything directly (my own products) or charging sales tax so that much I don't need to worry about.

      Now I won't even be selling for Amazon as an affiliate - and the problem California had with them was they don't charge customers sales tax online. That is the crux of the argument and why, rather than to charge tax, Amazon just kicked California affiliates to the curb.
      You make it sound like collecting tax is easy! California does NOT allow ANYONE to collect "california sales tax". If they did, california would haul them into court. What people generally call california sales tax ISN'T really that at all. It is tax for an area that HAPPENS to be in california. THAT means that if you are in thousand oaks you will probably pay a DIFFERENT rate than san jose or la! SURE, part of that is CALIFORNIA sales tax. MOST of it is. STILL, california expects YOU to charge based on the area, And if they do it for california, SALES will be hurt! And ALSO, there is all the extra work for ALL the areas! And I would bet that 80%+ of sales in california are NOT tied to a california affiliate! I buy from companies ALL OVER the US! Do you think many were from affiliates in my area or theirs? I DOUBT it!

      I just took my site down and still waiting for the tax guy to call me back so I can see if it is feasible to say: "I'm not going to work on Maggies Farm No More".

      ... with that said I think the issue is huge for online business - as Amazon calls them 'Big Box Retailers' - they are feeling the loss to their bottom line from online businesses and this is just one small gesture for them to keep their monopolies and force the 'little guy' out.

      I think it is a black day.

      If a fly comes through here I will rip his wings off.

      (just kidding, I would only spray him).
      ACTUALLY, this was NOT done to help the B&M places out. It is TOO LITTLE, TOO LATE!

      Steve
      {{ DiscussionBoard.errors[4178007].message }}
      • Profile picture of the author angelast
        This is a huge blow for those in California that were or are using the Amazon Affiliate program as an income stream.

        Having just purchased Colleen Slater's WSO "Amazon Treasure Chest" I was preparing to get to work when this latest bill kicks up sand in my face. Guess it's time to focus on other business models for my fledgling internet marketing business.
        {{ DiscussionBoard.errors[4178036].message }}
  • Profile picture of the author seasoned
    Road dog,

    YEP, THAT is what I meant when I said "BTW, he said the foreign corp filing effectively feels like a corp filing since it costs as much, etc... I guess the only advantage for the corporation is to make sure all taxes are paid, and that it is clear that they extend to that state.". If you don't appear legit, serious, or comingle, DON'T trust the "corporate veil". That IS a legal term, and you can CLEARLY tell by the word choice that it is FLIMSY! BTW C may be STRONGER than S in that it is <MORE distinct, but NEITHER is THAT great.

    Steve
    {{ DiscussionBoard.errors[4178028].message }}

Trending Topics