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  1. #1
    Believe knight01's Avatar
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    Tax 'Name' issue.
    I've been watching this for the last year and it is repeatedly called the "Amazon Tax". While this may be due to the initial authors of the bill targeting Amazon, it's far beyond an Amazon Tax.

    I fear many affiliates and perhaps even merchants are not paying attention due to the name we continue to use. (Not picking on this person but this post makes an accidental point)

    Can we agree to stop calling it the "Amazon Tax". When we get in front of legislators or media in particular we need to call it a "Nexus Tax" or something that will make them want to know more about it. Continuing with "Amazon Tax" makes many think it only affects Amazon and won't have an impact on them.

    I even decided to tweet about it... and I don't tweet often.
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  2. #2
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Excellent point.

    I know I've used the term "Amazon" tax for lack of a better recognizable term.

    "Nexus" tax sounds good, as it evokes the response "What?".
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  3. #3
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    Anti-Local Advertising Law
    I've stuck with the term "Amazon Tax" because:
    • Amazon was the the booksellers' primary target in writing this bill, and they continue to refer to opponents as "Amazon apologists";
    • Amazon probably collects more sales tax for New York than the total collected by all other merchants who were "captured" by the law last year;
    • Legislators are viewing this as primarily a tax on Amazon, and don't care about other out-of-state merchant any more than they do about Amazon;


    I agree that it's troublesome that this term "shifts the focus" away from the in-state web publishers (small business owners) who will suffer most, as well as excluding many smaller out-of-state merchants.

    The term also implies that if passed, the law will actually cause Amazon to collect the sales tax, which simply isn't true.

    Unfortunately, all the "alternate" terms used to identify the law have their own problems. I've discussed this before, too:
    • For legislators and voters, the term "affiliate" is likely to bring to mind the intensely close relationship between a national TV network and its local affiliate station;
    • The term "associate" evokes the idea of a Best Buy or Wal-Mart sales representative;
    • The term "partner" is a deal-killer, because it assumes a complete integration of the parties;
    • The words "referral" or "commission" are associated with the idea of in-person sales representatives.
    • The term "click-through advertiser" or "click-through agreement," used by some legislators, seems to actually broaden the scope of the law, which is worded very broadly but has been very narrowly interpreted in New York;
    • The word "nexus" might be the best alternative, but isn't quite accurate (because the law doesn't seek to re-define the word nexus, but instead to pretend that an advertising contract creates a "physical presence," which is the threshhold required by the U.S. Supreme Court to establish nexus). Of course, neither legislators nor voters have any idea what "nexus" is, so the word could be a confusing distraction. (On the other hand, it emphasizes the obscurity of the "trick" which legislators are trying to use.)
    • The law uses "advertising" with "local web publishers" as the "hook" (and the law is broadly worded so it really includes all in-state publishers and broadcasters). The real emphasis belongs there: this is really an "advertising" law, providing that merchants who pay any in-state media outlet for advertising in a state must collect sales tax there. In effect, it's an "anti-local advertising" law, imposing a "penalty for advertising in this state" -- as well as a penalty for paying in-state businesses for advertising anywhere else.
    Last edited by markwelch; July 1st, 2009 at 02:44 PM.

  4. #4
    Believe knight01's Avatar
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    Mark,
    While your post goes into many important concepts, and accurately points out that 'Nexus Tax' is not quite accurate. I think you missed the forest for the trees.

    Having a name that is absolutely legally correct and accurate when addressing the issue isn't my goal because based on your post, "Amazon Tax" is also not appropriate. My goal is, as affiliate hound put it, to get people to say 'what?' so a dialog can begin.

    When the term Amazon Tax is used a certain percentage immediately jump to the conclusion that it has something to do with Amazon.com and since they are not an affiliate/associate of Amazon it won't have an effect on them.

    Frankly, I don't care if we call it the 'blue widget tax', I want the industry to take control of the dialog and drive the issue rather than be passive and wait to see if someone will come to our rescue.
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  5. #5
    Analytics Dude Kevin's Avatar
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    Shawn Collins has been calling it an "advertising tax". I always thought that that covered it pretty well.

    I think "bogus tax" works equally as well.
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  6. #6
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  7. #7
    Believe knight01's Avatar
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    Quote Originally Posted by loxly
    It actually doesn't matter what *we* call it, it is what the public, the politicians and media call it.
    Exactly, we must correct them and make it clear this is not about Amazon.com.
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  8. #8
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    Okay, I'm convinced that "Amazon Tax" is not the right name to use when referring to this language. Governor Schwarzenegger certainly helped me reach that conclusion, when he specifically referred to Overstock.com when explaining why he vetoed the budget bill.

    I'm now planning to use the term "Advertising-Nexus Tax" to refer to this issue. I agree that it's important to clarify that what's being targeted is advertising (not "sales agents"), and the word "nexus" helps people see that this is an obscure "trick" and not a legitimate policy.

    It's also important to recognize that the plain language of the bills (the language written by the booksellers' lobbyists) isn't limited to commission-based or performance-based advertising, nor to online or internet advertising. As written, the law provides that any in-state advertising could trigger the sales-tax collection duty. Thus, terms like "affiliate tax" or "internet tax" are unfairly limiting.

    In general, I probably won't refer to "the Advertising-Nexus Tax," but instead to "Advertising-Nexus Tax Law" or "Advertising-Nexus Tax language." (These bills don't seek to "tax advertising." Instead, they would create tax laws which are triggered by an advertising-nexus. Likewise, they aren't "affiliate taxes" since they don't seek to "tax affiliates," and the term "Amazon Tax" is somewhat unfair because states aren't asking Amazon and other merchants to pay a tax, but instead to serve as forced tax-collection agents for the state).

  9. #9
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    Quote Originally Posted by markwelch
    Okay, I'm convinced that "Amazon Tax" is not the right name to use when referring to this language. Governor Schwarzenegger certainly helped me reach that conclusion, when he specifically referred to Overstock.com when explaining why he vetoed the budget bill.

    I'm now planning to use the term "Advertising-Nexus Tax" to refer to this issue. I agree that it's important to clarify that what's being targeted is advertising (not "sales agents"), and the word "nexus" helps people see that this is an obscure "trick" and not a legitimate policy.

    It's also important to recognize that the plain language of the bills (the language written by the booksellers' lobbyists) isn't limited to commission-based or performance-based advertising, nor to online or internet advertising. As written, the law provides that any in-state advertising could trigger the sales-tax collection duty. Thus, terms like "affiliate tax" or "internet tax" are unfairly limiting.

    In general, I probably won't refer to "the Advertising-Nexus Tax," but instead to "Advertising-Nexus Tax Law" or "Advertising-Nexus Tax language." (These bills don't seek to "tax advertising." Instead, they would create tax laws which are triggered by an advertising-nexus. Likewise, they aren't "affiliate taxes" since they don't seek to "tax affiliates," and the term "Amazon Tax" is somewhat unfair because states aren't asking Amazon and other merchants to pay a tax, but instead to serve as forced tax-collection agents for the state).
    Can we work together to create a glossary of terms? It will be more effective if we use the same language to establish who we are, what we do, etc. Otherwise, the legislators will do it for us. I've heard N.C. legislators refer to it as the "click-through" tax. How vague is that?

    I'll start a thread, and if it doesn't go anywhere I guess we can just go on like we are.

  10. #10
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    Actually instead of starting a new thread, I'll just add to this one.

    The main one besides what to call the tax is what to call ourselves.

    When writing to my legislators, I have moved away from terms like "affiliate" and "associate" and try to stick with Web Publisher. This makes it easier to compare my business to that of a print publication.

  11. #11
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    hi, I'm small fish, I'm new here, I hope I can enjoy my stay.
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    Last edited by loxly; September 2nd, 2009 at 11:31 AM.

  12. #12
    Advocate mellie's Avatar
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    Might be more enjoyable small fish if you follow the rules.

    Mods getting ready to play Go Fish?
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  13. #13
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