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January 30th, 2010, 09:41 PM #1email I sent to the Colorado dems...
Here is an email I sent to the democrat committe members, members of the Colorado and National Democratic party and the governor of Colorado Bill Ritter Jr. (D). So far in Colorado the votes have nearly been party lines. All republicains in Colorado oppose this bill. I voted democrat during the last election so I feel I have the right to be slightly "angry" in my tone. This bill was sponsored by Pommer (Boulder Dem). The chair of the commitee is Joel Judd (D).
If this passes the house (monday), I will make a tweaked version for the press and try to get our story published so the senators might finaly wake up and try to understand what this affiliate issue is really about.
Please note that I am an independent (I reserve my right to vote which every way I deem neccessary at every election). To the defence of the dems my democrat congressman (who voted against it Friday) seems to say that the dems are listening and he feel relatively confident that the 3 or 4 dems needed to defeat this bill will be there Monday for the final house vote.
On a side note, he also said the republicains are looking good right now because they oppose these bills but propose nothing to fix the 1 billion dollar deficit of Colorado .... Whatever as long of HB-1193 is defeated....
Hello fellow Democrats,
I'm a software engineer and became American in 2003 nearly for the joy of trying to vote President G. Bush out of office. I have voted blue ever since. I donated to both Kerry's and Obama's campaigns and tried to influence all the people I know to do the same. I'm one of the democrats that is proud to have helped turn Colorado from solid red to purple (2004) and then solid blue (2008).
Please do not contrast bill HB-1193 with the education programs of Colorado. Please to not politicize this issue. I've always believed that free education and healthcare is best way to give true equality to individuals and is in the best interest of our society. My birth nationality is French. Even the far right in France share those beliefs.
This issue is becoming infuriating because the people I voted for are making a huge mistake and they are not listening to the feedback I (and many Coloradoans) are trying to communicate concerning the bill introduced by Rep. Pommer (HB 10-1193) and passed by the house on 1/29. I'm on team Colorado.
This is not about my job, I could do it anywhere in the world. Although it would be a major disruption for me I will do just fine. I urge you to read and try to understand the ideas I'm attempting to communicate to you about HB-1193.
I understand that our state needs to collect more money. This recession is devastating to so many. But HB 1193 will not collect anything; on the contrary.
Representative Pommer and his colleagues from the house know out-of-state merchants will drop their affiliates in Colorado if we use the presence of affiliates to establish nexus. Merchants will drop their affiliates because they think it is unconstitutional. The Quill v. North Dakota supreme court case clearly states that a physical place of business constitutes nexus. It appears that the federal legislature or the supreme court will end up being the proper authority to regulate what constitutes nexus for inter-state commerce.
Regardless of that point, once merchants drop their affiliates they will have no nexus in Colorado, so they will not have to collect sales taxes for our state. So how much money will this really bring to the Colorado budget? The answer is most likely, nothing.
Gaiam, a large Boulder merchant has dropped all their NY affiliates (please find following the exact termination letter they sent out). Can we blame the stores of other states for doing what our own stores did to the affiliates of the 3 states (NY,RI and NC) that have enacted laws similar to 10-1193? Rep. Pommer said those out-of-state merchants threatening to terminate Colorado affiliates were holding Colorado affiliate hostages. Maybe we are not seeing this correctly. From the affiliates perspective it's actually the state that are holding them hostage, maybe to create a nexus.
It is estimated that over 200 merchants dropped affiliates from the states that tried to establish a nexus using the presence of affiliates in their states. Amazon stayed in NY because they needed a court case. They will go all the way to the supreme court of the United States. In ten other states, plans for similar laws failed or were abandoned.
Hundreds of merchants will drop all their affiliates in Colorado, potentially costing the jobs of thousands of full time Colorado affiliates and the countless children, students and schools making side money with their web sites, blogs or hobby sites. Many professional affiliates, sometimes called super affiliates, do very well. The loss in Colorado state taxes could be in the tens of millions.
Constituents learned of this bill a few days before the committee hearing. None the less, an estimated 100+ affiliates attended the hearing. As a side note, many affiliates and their families were watching the house vote on this bill over the web. We saw a republican produce a picture of the committee hearing showing the room full of affiliates, this republican even correctly stated that many did not fit in the room. Rep. Pommer replied incorrectly that the room was full of lobbyists.
During this committee hearing Rep. Pommer and his colleagues appeared to be learning more about affiliate marketing, than they had ever learned before. So much so, that the committee came up, on the fly, with a new definition of what an affiliate is. Is this how laws, determining the future of jobs and of the fastest growing industry in the country are decided in Colorado? I doubt one single Colorado professional affiliate was ever consulted before drafting HB 1193 which has the potential to obliterate the online marketing industry in Colorado.
Unfortunately that new definition of an affiliate, that appears to excludes 99% of the affiliates, does not change much, if anything. The problem is intact since nexus could be established by one single rogue affiliate. Successful affiliate programs have thousands of affiliates all over the world competing with each other every single day. Amazon has millions of affiliates. If one single affiliate breaks her agreement with the merchant by using a public place of business in Colorado to direct a person to her affiliate site, will the merchant have established a nexus in Colorado? This nexus would then be established for his entire sales in Colorado not just for that single offending affiliate. Is this nexus now established forever? Which merchant will want to take this financial and business risk when he already has thousands of other affiliates in other states and countries already competing with his Colorado affiliates? I'm afraid the answer is, none.
For example, all affiliate programs I know of, require that affiliates do not use unsolicited email (SPAM). Once in a while a rogue affiliate might succeed in joining an affiliate program and break that rule. He will be promptly removed from the program by the affiliate manager and not receive any commission. That rogue affiliate could be a teenager in Japan, a man in Russia or a woman in Colorado. Are we in a position to blame, the out-of-state merchants that out of legal or financial fear of establishing involuntarily nexus in Colorado, decide to not accept in their programs any kind of Colorado affiliates? I'm certain our own stores in Colorado would do the same.
The differentiation Colorado is trying to make between different type of affiliates does not exist in the affiliate industry.
In a blind and wishful rush thinking we will collect 4,000,000 dollars from out-of-state merchants we risk loosing tens of millions of real dollars the affiliates actually give back every year to Colorado and in the process we risk killing the start of a flourishing industry.
The chair of the committee Joel Judd insinuated that the affiliates were in the business to profit from the non-collection of taxes from out of state merchants. I had never heard that angle before to describe internet marketing or e-commerce. I suspect many on the committee do not know about this young but already large industry. Google, Yahoo, Microsoft, and all e-commerce retailers large and small, many here in Colorado, are involved in this industry. Google even runs one of the largest affiliate networks. It's called GAN (Google Affiliate Network). Do some democrats really think this entire industry is based on the non-collection of sales taxes? That would be very mis-informed. It is frightening to realize people with such little knowledge of this industry could be deciding about its future in our state.
This industry has already had countless trade shows in many states and countries every year. We had a very successful trade show right here in Denver in 2009 and another was already planned for 2010. At the Denver show last year, I met a person who was just laid off from his job. He was trying to become an affiliate. I met this person again at the committee hearing, last Wednesday. He was now supporting his family as an affiliate. This industry is creating a lot of jobs every year. Colorado should welcome affiliates not chase them away.
This industry will continue its rapid growth with or without our great state. According to Forrester Research, US online retail reached $175 billion in 2007 and is projected to grow to $335 billion by 2012. Of course this is hurting local stores. The passage of HB-1193 will change nothing in that regard. Please note many of our local Colorado stores are the other 49 state's "out-of-state merchants". The Denver book store Tattered Cover is online (tatteredcover.com) they do not appear to collect taxes for out-of-state orders (I just tested with a California address). This same store was one of the book store owners that testified in favor of HB-1193, pretty ironic. The fact that Amazon is hurting the sales of Tattered Cover would not be attenuated in any way by HB-1193. E-commerce is growing in the double digits year after year. People enjoy shopping online.
I hope I have opened your interest in affiliate marketing and about current recent history of internet taxation and how other states are attempting to have out-of-state merchants collect sales taxes.
I urge you in the best interest of Colorado to contact me if wish to understand these issues further. I know many are very busy with their schedules and the current budget crisis, so I encourage you to use my time to work as a team in the interest of Colorado.
I implore you to forward or communicate this message and my contact information, to anyone involved that would have a say in stopping HB-1193 before it's too late.
Last edited by delsol; January 30th, 2010 at 10:07 PM.
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