If you live outside the United States imperial federal government jurisdiction then this post is not for you. You can continue to create your little affiliate pages on solar outhouse panels and collect links from E-X Type 20 Linkback Speed-Mo. For those within the confines of the compound then you best be paying attention to the local and state governments and what the courts are saying about affiliate state taxes.
If you live in the liberal enclaves New York, North Carolina, Rhode Island and now Colorado then you have already gotten word from Amazon that they no longer will be doing business with you, the humble Internet marketing affiliate.
Dear Colorado-based Amazon Associate:
We are writing from the Amazon Associates Program to inform you that the Colorado government recently enacted a law to impose sales tax regulations on online retailers. The regulations are burdensome and no other state has similar rules. The new regulations do not require online retailers to collect sales tax. Instead, they are clearly intended to increase the compliance burden to a point where online retailers will be induced to “voluntarily” collect Colorado sales tax — a course we won’t take.
We and many others strongly opposed this legislation, known as HB 10-1193, but it was enacted anyway. Regrettably, as a result of the new law, we have decided to stop advertising through Associates based in Colorado.
The statist governments of these states have overspent. Their money bags are empty. They are broke. They need money. So what does a Democrat controlled state house do? Cut spending? Haha. Seriously?! No, they raise taxes. And what better place to raise those taxes than from Internet commerce.
This wonderful decision calls for Internet retailers with in-state affiliates like YOU, who operates websites with links from companies like Amazon, to collect the state sales tax.
Colorado thought the decision would bring in an extra $5 million they could spend. Human Events reports (emphasis added):
Colorado Democrats predicted that revoking what they described as the Internet sales-tax exemption would bring an additional $5 million to the state’s depleted coffers. Instead, it appears the Democrat-controlled legislature has killed an entire industry at the cost of as many as 10,000 jobs.
Almost immediately after Colorado Gov. Bill Ritter signed the legislation, Amazon struck back. The company sent out emails to its associates informing them that it would cease its affiliate program in Colorado. That means Colorado website operators can no longer earn income by referring customers to Amazon through links and advertising on their sites.
The hilarity does not stop there. The other states who enacted these stupid-ass job killing taxes have made zero money from the decision.
Amazon did the same thing in North Carolina and Rhode Island after similar legislation passed in 2009. Other Internet companies followed suit in those states, thus eradicating thousands of jobs and opportunities for those attempting to enter the web-based market.
Legislators in both states had predicted the state would reap a financial windfall. Instead, Rhode Island officials reported in December that the six-month-old law had produced no revenue. North Carolina officials have refused to comment, according to Joseph Henchman, tax counsel with the Washington-based Tax Foundation.
New York has actually lost money.
North Carolina refuses to comment. Yea, that’s because it has been a big fat flop. You’re telling me if the politicians had made mad money they wouldn’t be crowing about it?
I fucking hate it for affiliates in these states. I also hate it for affiliates in the U.S. because this isn’t going to stop here. Many states tried and failed to get this type of legislation passed. My state, Tennessee, dropped it damn quick. This stuff pops up in your state, you better get off your ass and make calls to the state house and let YOUR state rep know you don’t support it. That fucker answers to you. Make him talk to you. I’ve learned after being active in the Tea Party movement, 9/12 Project and town halls that these shitbags will listen when pressed. We killed it in TN and others have killed it in other states as well. Listen to Brad Feld:
Feld, a longtime Amazon affiliate through his website Feld Thoughts, responded with a post entitled, “Amazon Fires its Affiliates in Colorado (Including Me) Because of Colorado HB 10-1193.” In the post, he kicked himself for not doing more to lobby against the bill, saying, “I made a huge mistake.”
“I’m not at all surprised by this action on Amazon’s part,” said Feld. “I expect the Internet affiliate business in Colorado will completely die within the next 30 days.“
Colorado’s Governor Bill Ritter, in true statist fashion, blamed big business:
“Amazon has taken a disappointing – and completely unjustified – step of ending its relationship with associates. While Amazon is blaming a new state law for its action, the fact is that Amazon is simply trying to avoid compliance with Colorado law and is unfairly punishing Colorado businesses in the process.”
Amazon is making a stand. It’s troubling to affiliates but it is justified. Personally I am glad that companies like Amazon are giving over-reaching state governments the finger. Don’t like it? Then vote these liberal, big-spending progressive statists out of state governments. As far as Colorado goes, it looks like McGinnis, a Republican, is leading the race. You folks out there may have half a chance at changing the progressive movement left. Doubtful. But good luck with it. Maybe you can get this bill repealed.
Making money on the Internet is going to be under these attack as long as the economy sucks in the U.S. You can bet on it. Affiliate marketing loses its luster when you consider that tax policies and decisions by Amazon and others can make it go away in a day. Makes Adsense and other clickin’-it-rich programs look good by comparison.
{ 9 comments… read them below or add one }
TN – Glad to know that.
It’s only a matter of time before they get their claws into every online transaction. We should all enjoy the tax free internet while we can.
Don’t worry, health care reform will make it all worthwhile.
Hahahaha! I kill myself. Slouching into Gomorrah we are.
… and don’t forget the IRS has a 1099-K form that online payment processors like PayPal will begin filing on you next year.
I hear Panama is really pretty this time of year… and they have fiber optic internet connections that blow our broadband out of the water… Doh!
I live in North Carolina and in addition to the Amazon curfuffle some of the schemes that they have proposed to fill the state coffers have been pretty ridiculous..
1) Rain Tax
2) Home Improvement Tax
3) Mileage Tax
4) Land Transfer Tax
Some of these have failed to get ratified, or will try to be bought into law at a later session. Others, like the mileage tax, which charges you for every mile you drive your car, might have a chance of making it this year.
NC is a billion in the hole, so they have to do something creative. Yea, Tenn is a great state.
I heard that when the state legislature tried to enact a state tax, one of the local radio stations got wind of it and rallied the citizens to get down to the state capital to protest the move.
I think that the legislature even tried to pass it in the middle of the night or something bone headed like that. And, I would assume it was successful. I don’t think Tennessee has a state tax to this day? Ya gotta love that.
Amazing what a few angry citizens can do. Kinda surprised about Colorado. I thought their Governer was an “R” and that they had their financial house was in order. Guess not..
I’ve kind of lost total faith in the ability for any political party to actually solve problems. It is a shame, but the first job of any politician is not to serve the electorate, but to get relected..
Just sayin…..
Robert C..
Bama – I agree with you, taxation of online transactions is on it’s way. Money is changing hands without the government getting it’s piece and they don’t like it. I hate it to, but I feel that it’s inevitable.
Dave – That’s too funny! Health care reform – we’re going to need to reform the reform. lol
Robert, so far Tennessee has avoided the state income tax. In fact, the state constitution makes one illegal AND the state Senate is taking up a proposal that would explicitly place a ban on the tax into Tennessee’s constitution. Like a double jeopardy ban. Crazy, but good.
re: Colorado. The gov is a Dem. The senate and the house are both Democrat controlled.
Mark the IRS is about to be even more intrusive into your life. And some reason Americans just bend over and ask for more. The health care bill provides for something like an additional 16,000 agents to be employed. Why? So they can audit whether businesses and individuals have purchased required (and unconstitutional) insurance.
I hate what this country is turning in to. I don’t want to live in a socialist country but starting Monday I guess that will be the case. Obamacare is the virus of socialism. I’m not sure there is anywhere to go now to escape tyranny. I’ll stay here and do what I can to fight it. But the statists and liberals have essentially won. Americans in general love their entitlements and want the government to take care of them and run their lives. They want something for nothing. Self determination in this country has essentially expired. And the statists use this to remain in power. It’s sad. The western world is essentially a big mass of lazy moochers. Something for nothing. I wish those in this country that feel like socialism/statism is the life for them would simply move to Canada or Europe. I would have preferred them not to have infected this country with their progressive virus.
Yeah, if I had to pick a Dem governor to be president, it would probably be Phil Bredesen.
And he has the experience with TennCare to know that a national version makes no sense.
Yea Bredesen recognizes his limitations in a state legislature that is overwhelmingly red. He likes his job so stays firmly planted to the center-center right. He keeps the budgets balanced and got a handle on Tenncare by limiting its reach. He’s popular here and runs the state well. I have little to complain about him.