[crlharris]

I just got my termination notice from Amazon:

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
___________________________________

Shock. Numb with shock.

[mellie]

Hawaii affiliates were sent a similar letter.

There is still time to work on the legislation but you need to also prepare your business.

If a conference call would help you and other NC affiliates organize, Affiliate Voice can help set up conference call, please contact me to discuss.

(use membership AT affiliatevoicellc.com )

[jamuhn]

I am surprised they did this even before it has come close to a vote. What will they do if they don't pass the bill before their break, which some seem to expect to happen? I think they are just doing this to make a point to California to show they are serious about canceling affilaites.

Pretty unprofessional on Amazon's part in my opinion.

They are making a point AND covering their backs. Some states have language that makes it unclear as to when the tax liability starts.

[John Powell]

They are making a point AND covering their backs.

And also trying to inspire affiliates to contact their legislators prior to a vote.

[ajparker]

If I read the bills text correctly, there are portions slated to go into effect immediately when passed and at the end it says essentially that if it's not otherwised stated the laws go into effect July 1, 2009 which would mean that even if it's passed July 15th they could retroactively require companies to remit sales tax collections from July 1....

They're also pushing a sales tax on services which, depending on the interpretation may affect my offline work and I'm trying to figure out exactly what that will mean and it may mean that I'll be on the hook for collections from July 1st even if it's not passed until later. Given that it's a whole shifting sand of conference committee I think Amazon pulled the plug now so that they don't wind up owing ANYTHING.... I imagine if the language is out and the bill is passed without it, they may find it simpler to reactivate accounts than deal with their other possibility which was to owe the extra sales taxes.

My biggest frustration at this point is directed at our state legislature which for the last 15 years has done little more than raise taxes every time there was a budget shortfall, then turn around and miraculously find that they had a surplus, stay late into the night spending it and wake up again in another budget crisis. Of course, this time the selling pitch has been to tell the General Assembly to raise your taxes so we can fund the schools.... Many schools have seen budget cuts this year which has led to notices to teachers informing them that their positions will not be guaranteed for the fall. In some ways it feels like a very well thought out strategy to make people want new taxes "for the children".

I am also frustrated with Amazon though for terminating a ~13 year business relationship instead of telling us that they will work with us to ear money through their program no matter what the tax requirements are. On the flipside I do see that it's the easier course for them at the time though to just pull the plug and wait. But in so many ways I feel like they are using their affiliates as pawns..... it makes me wonder if I want to continue my relationship with them if this is repealed/removed...

I see ahead of me the mammoth task of finding another affiliate program for the things that I have links to and changing each and every one manually (remember 13 years worth of a relationship...), hope that the new affiliate program doesn't decide to pull the plug OR leave all my links as they are and essentially let Amazon profit off of the last 13 years of my work.

Yes, there are other affiliate programs, but my main lingering question is which others will pull the plug? The definition of nexus could even mean that if I get compensation for someone clicking an ad on my site and the company has over 10,000 a year in sales they owe... so what about Google Adsense? What about OTHER advertisers?

This could ultimately squash 20% of my income and really the main segment of income that has seen dramatic growth in the last year. So, the state is out at both ends, they'll miss out on the sales tax that they wanted AND the income tax that we pay on it.

By the way, NC citizens do pay a use tax on their state income tax returns that is supposed to cover the sales taxes that you "should" pay on your online/mail/telephone purchases. You can either choose to take the flat rate or itemize... most people take the flat rate I'm sure (we do.) My personal opinion is that if they want more sales tax on internet purposes and think they aren't getting a fair cut they should adjust their flat rate choice on the use tax and be done with it.

Probably the biggest frustration is that an email to my state senator, (a very nice, respectful and reasonable email, the first sent to one of my elected representatives) received absolutely NO response. It's been a week, no answer whatsover, not even a form email thanking me for contacting the office, NOTHING.

Off to sulk and figure out where to go from here.

This smiley just seems to capture what I feel like today.... not that I was earning THAT much directly from amazon, but.....

[TheNakedMan]

its the principal of the matter. These taxes are unbearable and quite stupid in the grand scheme of things.

[Vrindavan]

will change to Gift certificate payment is also an option ?

[Herb Ô¿Ô¬]

Originally Posted by Vrindavan

will change to Gift certificate payment is also an option ?

I don't think so; it is just another method of payment.

[BizDocs]

Originally Posted by ajparker

I am also frustrated with Amazon though for terminating a ~13 year business relationship instead of telling us that they will work with us to ear money through their program no matter what the tax requirements are. On the flipside I do see that it's the easier course for them at the time though to just pull the plug and wait. But in so many ways I feel like they are using their affiliates as pawns..... it makes me wonder if I want to continue my relationship with them if this is repealed/removed...

One of my web sites has about 1,200 pages with tens of thousands of Amazon links. While it will be a royal pain to remove them if the law passes, it will ultimately be in everyone's best Amazon holds the line and does not back down like they did in NY. There are several constitutional issues around this. I wrote about one in the General Affiliate Tax Law forum. I spent last weekend researching case law and feel like I understand a little better why Amazon pulled out like they did.

I don't know if or when someone will start litigation on the unconstitutionality of this law, but I'm thinking it will get resolved faster if lots of retailers pull their programs out at this point.

[ajparker]

Originally Posted by BizDocs

One of my web sites has about 1,200 pages with tens of thousands of Amazon links. While it will be a royal pain to remove them if the law passes, it will ultimately be in everyone's best Amazon holds the line and does not back down like they did in NY. There are several constitutional issues around this. I wrote about one in the General Affiliate Tax Law forum. I spent last weekend researching case law and feel like I understand a little better why Amazon pulled out like they did.

I don't know if or when someone will start litigation on the unconstitutionality of this law, but I'm thinking it will get resolved faster if lots of retailers pull their programs out at this point.

I think you're right that ultimately this is an issue that needs to be decided at the Federal Level and the state doing so appears to be an over-reach. I wonder how much money the state is prepared to spend on defending this law? I doubt that's been estimated into the total revenue they expect this bit to bring in....

AJP

[BizDocs]

Originally Posted by ajparker

I think you're right that ultimately this is an issue that needs to be decided at the Federal Level and the state doing so appears to be an over-reach. I wonder how much money the state is prepared to spend on defending this law? I doubt that's been estimated into the total revenue they expect this bit to bring in....

AJP

Excellent point!

[markwelch]

AJParker wrote: > "I think you're right that ultimately this is an issue that needs to be decided at the Federal Level and the state doing so appears to be an over-reach. I wonder how much money the state is prepared to spend on defending this law? I doubt that's been estimated into the total revenue they expect this bit to bring in...." <

I think that "potential litigation" is the main reason why other states aren't making any changes to the extremely vague and overbroad language used in the New York law. Other states probably expect to "piggy-back" on New York's legal work, and may try to delay any litigation to see the outcome of constitutional (commerce-clause) litigation regarding the New York law.

Of course, in order to fairly "piggy-back" on the New York law, other states would probably also need to adopt the extraordinarily narrow interpretation that New York's tax agency adopted; if other states seek broader interpretations, then even if the New York law were upheld "as applied," states which applied the law differently would need to litigate further -- and the merchants litigating and appealing over the New York law might allow the New York appeals to take a back seat if they think another state's interpretation of the law is "worse" (more obviously unconstitutional) than New York's.

But in any event, I don't think state legislators care much about the potential cost of constitutional litigation.