ALERT! Will we lose our Amazon and other affiliate income? We might. Many already have.
[Originally posted in SquidU]
In several U.S. states, Amazon has shut down its associates program, in response to new laws passed attempting to collect sales tax from affiliate marketers or internet commerce. I’m guessing that the cost of recordkeeping for so many individual accounts and/or paying sales tax on such minute amounts eats too much of the profits to be worth the trouble.
Most recently, Colorado associates got shut down, following Hawaii, North Carolina, and Rhode Island. Read that link for more info.
Alarmingly, I’m reading old — or new? — news that New York State has instituted such a law, and the only thing holding it back is an appeal filed by Amazon. Here’s a New York Times editorial about it, expressing the opinion that Amazon should lose.
On the one hand, states have the right to tax sales that go on in their states.
On the other hand, every time Amazon shuts down an affiliate program, it’s not Amazon who gets shafted. it’s us. The affiliate marketers. The folks trying to pay bills. The folks trying to make ends meet.
Any of us could be victims of these new state laws, which could take away our Amazon or other affiliate earnings.
Some of our friends and Squidoo members have already gotten burned by this: they’ve lost their associate accounts because Amazon’s pulled the plug in their states.
And it could happen in New York, where Squidoo is based.
I don’t know what would happen then, but I don’t like the prospect.
That New York Times editorial shows that most people think this is just going to impact Amazon’s bottom line. All they see is big bad Amazon getting a tax break while competing with small businesses. They don’t realize that millions of families and small businesses make money on Amazon through affiliate commissions. I’m sure legislators don’t have a clue.
So I think that we should use some of our marketing and writing skills to write EVERY SINGLE state legislator and congressperson, and tell them the other side of the story, which they’re probably not hearing: yours and mine.
Write your state representative. Write your congressperson. Today.
This is more important for your online livelihood than any Tweet, Facebook status update, blog post or other page you do all this month… maybe all year.
I’m not sure what arguments one can use to counterbalance, “we need the sales tax to pay off our looming debts.” But how about, “Amazon will just shut down their associates program in states where the cost of running it is too costly — they already have in HI, RI and CO — so you’re not going to get that money anyway. But Amazon Associates pay income taxes, so if they get shut down, you LOSE revenue, not to mention killing people’s jobs, income, and buying power.”
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I am glad that our state is safe for at least 6 years with our new governor. However, other states need to wake up. These laws not only affect big companies like Amazon, but other very small companies that only have 5 or 6 people running them.
The problem is that sales tax laws are not uniform across all of the states and if companies were required to collect sales tax for every state they shipped to, it would take a massive amount of people to do so because they would have to make sure the correct tax is being collected for every place they shipped to.
I have experienced this a little bit in my own state. Paypal and eBay only allow me to set a fixed state tax amount for the states that I am required to collect tax in. Unfortunately, I am also required to collect county tax which I am unable to do with the tools offered. Since I don’t ship a lot within my state, I have just ate the small county tax every year. If I have shipped more, I would have been in real trouble.
Hmm, I think I’ll do some math and write a hub or lens about it. Maybe both. States need to realize the revenue they’d be losing without this income. Companies aren’t going to conform, they’re just going to cut off the affiliates.
I just sent an email to my congressman urging him not to support any such measure in Florida. Readers can visit House.gov to be directed to their representatives contact info.
Thank you! We’ve got to educate our representatives; it’s not like most of them understand the internet.