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  1. #1
    Advocate mellie's Avatar
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    Colorado is Taking Steps
    Just updated Affiliate Advocacy to alert to more developments. Colorado Governor has indicated that the Department of Revenue will be taking steps to add new nexus enforcement. All part of his new budget that is currently being worked on.

    Not sure if this means they will need to pass new legislation or if they will just be enforcing current legislation.

    Check out page 19

    http://www.colorado.gov/cs/Satellite...&ssbinary=true
    Melanie
    President - Affiliate Advocacy 2008 ShareaSale Performance Industry Advocate Award, 2009 Affiliate Summit Pinnacle Award - Affiliate Advocate
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  2. #2
    Advocate mellie's Avatar
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    Bumping this to say, if there any affiliates who are affected by this and would like to work with others please let me know.
    Melanie
    President - Affiliate Advocacy 2008 ShareaSale Performance Industry Advocate Award, 2009 Affiliate Summit Pinnacle Award - Affiliate Advocate
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  3. #3
    ABW Ambassador delsol's Avatar
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    some interesting links:

    http://www.colorado.gov/cs/Satellite...&ssbinary=true

    Anyone familiar with "National Bellas Hess, Inc. v. Department of Revenue Illinois" and what protection it offers?
    Last edited by delsol; December 15th, 2009 at 03:58 AM.

  4. #4
    ABW Ambassador delsol's Avatar
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    Personal links for reference:
    Merchants will terminate affiliates forcing the affialites out of business or to move to another state:
    http://www.cnbc.com/id/15840232?video=1167469724&play=1

  5. #5
    notary sojac Herb ԿԬ's Avatar
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    Quote Originally Posted by delsol
    some interesting links:

    http://www.colorado.gov/cs/Satellite...&ssbinary=true

    Anyone familiar with "National Bellas Hess, Inc. v. Department of Revenue Illinois" and what protection it offers?
    not much, apparently. definition of nexus is a movable feast now for states.

  6. #6
    ABW Ambassador delsol's Avatar
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    So if I understand this correctly. Colorado will not even vote a new law but simply try to get the collection agency (departmenet of revenue?) to enforce the laws on the book.

    Will this succeed without passing a new law since it has gone un-colllected since the beginning of the internet and maybe some could argue BBS days (20 years +?).
    Why have other states passed new laws ?

  7. #7
    Advocate mellie's Avatar
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    Quote Originally Posted by delsol
    So if I understand this correctly. Colorado will not even vote a new law but simply try to get the collection agency (departmenet of revenue?) to enforce the laws on the book.

    Will this succeed without passing a new law since it has gone un-colllected since the beginning of the internet and maybe some could argue BBS days (20 years +?).
    Why have other states passed new laws ?
    Our current understanding is that you are correct but I am still trying to verify beyond a shadow of a doubt. It seems like Colorado is going the path of some other states which is to just step up enforcement of current legislation. It is with the rights of most states to do so; it is not a change in tax but in method of collection.

    Quite a few states are doing this because it is simpler and faster. They come right out and say they do not need a new law since it is already on the books.

    Affiliates in some states are being terminated because of audits. I posted last week about affiliates in Wisconsin getting terminated by at least two out of state merchants due to online sales tax.

    Every affiliate in every state should be concerned about these developments. OPMs too will be at high risk, maybe even more so than affiliates.

    Some states are passing legislation or going that route because they feel it is clearer or because the current wording of existing laws makes it necessary.
    Melanie
    President - Affiliate Advocacy 2008 ShareaSale Performance Industry Advocate Award, 2009 Affiliate Summit Pinnacle Award - Affiliate Advocate
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  8. #8
    ABW Ambassador delsol's Avatar
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    I 've tried to contact at least one large affiliate in my town and sent this letter to my state congressman (Joe Rice):

    Mr. Rice,

    I'm contacting you to raise an issue that will force my business (and many others) to close down or move to another state. Before I have to move I want to see if we can try to do the smart thing and avoid making Colorado the 4th state to pass such a disastrous measure.


    Here is the piece of concern (page 19 using PDF search or Page 6 on the printed paper):
    http://www.colorado.gov/cs/Satellite...&ssbinary=true

    Here is an article on this issue:
    http://affiliateadvocacy.com/2009/rocky-mountain-lows/

    Here is a place a lot can be learned about this issue and how it was defeated in 2 states California and Hawaii with Florida probably also being safe:
    http://forum.abestweb.com/forumdisplay.php?f=543

    It looks like Colorado will not even vote on this issue but simply adopt a new regulation making it very scary for businesses like mine.


    Here is a summary of the problem:
    To avoid having to collect taxes on their sales (by the way, today this is still a very complex task to perform for small merchants given the complexity of all state/city taxes in the thousands of US zip codes) the merchants (Amazon.com .etc..) are dropping the relation they have with affiliates.
    For example: Amazon Drops More Affiliates to Avoid Tax http://online.wsj.com/article/SB124630810805070105.html

    This impacts our affiliate based businesses forcing us to shut down or move to another state. Some affiliate based business are very successful and earn very high commissions. A few successful affiliates alone probably earn the $5 millions dollars this tax is supposed to bring in. The cost to the state in lost revenue will surpass the revenue it generates by a important factor. This is why California and Hawaii have vetoed those measures.

    California announcement:
    "Report in LaTimes blog that Governor vetoed.
    http://latimesblogs.latimes.com/sho...her-states.html

    Overstock is quoted as saying they will reinstate Calif. affiliates but adding they will terminate affiliates in any state that passes or is close to passing nexus laws that would require them to collect sales tax."

    Hawaii:

    Governor vetoes measure:
    http://www.allamericanpatriots.com/4...nline-tax-bill

    Governors quote:
    "I am vetoing this bill immediately to help ensure Hawaii is not economically hurt by legislation that was not well thought-out and would have negative consequences for non-profits such as the University of Hawaii bookstore, and businesses throughout our State, Governor Lingle said. I am hopeful by vetoing this bill that mainland-based companies will promptly restore their relationships with our State."

    Amazon offer to re-enroll Hawaii affiliates:
    http://affiliate-blog.amazon.com/200...s-program.html


    Thank you very much,
    .../... My contact info .../..."

  9. #9
    ABW Ambassador delsol's Avatar
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    I will be moving if this happens. In fact as I try to fight this, I'm preparing contegency plans as we speak.

    Looking at places to rent from California to Oregon and Florida. Maybe even (not likely ) Panama, Belize or Honduras...he...he...
    Incorporating a corporation in a new state.

    Many questions here. If you incorporate in Orgeon or Delaware do you have to also live there? Is incorporating there enough to protect the merchants from having to let us go ?

    If anyone as experience here please feel free to share it or point me in the right direction.

  10. #10
    Moderator MichaelColey's Avatar
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    Incorporating elsewhere will not help. You would have to physically move. Your physical presence (not where you're incorporated) is what the states are arguing creates a nexus.

    Research the states you are considering. If you're really serious, you would probably want to consider one of the five or so that don't have a sales tax. Those are the only truly safe states.
    Michael Coley
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  11. #11
    ABW Ambassador delsol's Avatar
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    Thanks, I've looked at that list. Oregon (Portland) seem like the only attractive proposition. The other states are:
    Alaska
    Delaware
    Montana
    New Hampshire

    Florida seems like a reasonble state. But they are also hurting financially.
    I'm still stunned Colorado would enact such a regulation without a vote and before California (big mistake imho). Colorado usually understands small business pretty well.

    After trying the elected official route I will try the media route. I would be nice to unite with other Colorado affiliates to distribute the work and increase our chances.

    Meanwhile I will have my backup plan ready to go. Any affiliate having lived a similar situation is encouraged to leave feedback. Thanks!

  12. #12
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    Quote Originally Posted by delsol
    Colorado usually understands small business pretty well.
    I agree. But just in case, I'm thinking Oregon is a good bet because I lived there for 7 years. Nice state if you can handle the rain and 9% income tax.

    I hope other Colorado affiliates are establishing relationships with their representatives either by mail or face-to-face. Also, stay current with advocacy efforts as well.

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