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  1. #1
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    Nexus laws: who's to "blame"?
    Sorry Newbie here ... I know this issue is old news to many of you so sorry for any wasted bandwidth...Anyway...

    Short story: I'm a Calif. residence and have been doing AM for about 10yrs.

    Other than PPC (Adsense) and a little Amazon, and v. little SaS, I'm pretty much all CJ. Thankfully, most of my $$ has been PPC for the past 5 yrs because ...

    Over the past 6 mos., MANY CJ vendors, with whom I've been affiliated with long-term, have been dropping me. All due to Nexus, I assume, because only few give the real reason (and only after cattle-prodding via personal email). I emailed several CJ vendors who dropped me and ONLY ONE replied with this:

    "This termination was by no means anything that you have done wrong. Unfortunately due to Nexus Laws in CA, we can no longer work with you (as you are based out of California). If Nexus policies change and/or you move locations, please let us know and we'd gladly invite you back to the program. Again, I apologize for the inconvenience. "
    Now I can kinda see the "greedy" CEOs -- via their praetorian-guard politicians -- wanting ever bigger slices of the pie. They've been doing so for 1000s of years! But what does it say for the vendor/merchant who drops loyal affiliates at the first sign of trouble? is it 'cause they REALLY can't absorb the extra tax? Even if so, in 5yrs, e.g., most states may go Nexus. Hence, does this mean they'll drop us all? ... or beg us to come back? ... or will new/starving affs. fill the gap??

    I'm a little upset at CJ, too, because they generally don't mentions Nexus in their copy/paste robotic replies -- the ones you receive when you apply to new progs and/or are dropped. You don't know what you've done ... what's gone wrong ... etc. A massive time-waster! E.g.:

    "Thank you for applying to [CJ vendor]. We regret to inform you that your application was not approved for this program. This is not intended as disapproval of the quality or value of your Web site. Each advertiser determines how many and what types of publishers they will accept in their program for various reasons. You are welcome to apply to other advertiser programs in the Commission Junction network at any time. We apologize for any inconvenience this may cause you. "

  2. #2
    ...and a Pirate's heart. Convergence's Avatar
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    Quote Originally Posted by hollowman View Post
    Now I can kinda see the "greedy" CEOs -- via their praetorian-guard politicians -- wanting ever bigger slices of the pie. They've been doing so for 1000s of years! But what does it say for the vendor/merchant who drops loyal affiliates at the first sign of trouble? is it 'cause they REALLY can't absorb the extra tax?
    Merchants don't "absorb" the sales tax. They would be required to charge, collect, and remit to the appropriate taxing authority.

    Here in my town, parts of it are near 10% sales tax. - Merchants can't absorb 10% from their bottom line (don't forget they are already paying a hefty transaction fee for every affiliate sale on top of the commission).

    10% sales tax added to the order could be the difference between that merchant getting the order and another merchant not required to collect sales tax and with no affiliate program.

    Besides, it's still unconstitutional.

    Quote Originally Posted by hollowman View Post
    Even if so, in 5yrs, e.g., most states may go Nexus. Hence, does this mean they'll drop us all? ... or beg us to come back? ... or will new/starving affs. fill the gap??
    Probably drop us all until the nexus issue hits the Supreme Court - again. Amazon dropped us in Colorado a few years ago. We don't have a nexus tax, the State of Colorado decided not to persue it. Yet Amazon and other merchants have not invited us back.

    Other than that - Have no clue how all this will shake out. There's still the Google to contend with...
    Salty kisses, Sandy toes, and a Pirate's heart...

  3. #3
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    Quote Originally Posted by Convergence View Post
    10% sales tax added to the order could be the difference between that merchant getting the order and another merchant not required to collect sales tax and with no affiliate program.
    I going to assume that -- regardless of Nexus -- the merchants that are quick to drop affs are not making much off their affiliate ANYWAY. And here we open up a can of worms: are affs doing enough to promote the vendor? ... maybe the merchant's banners or datafeeds suck? ... maybe its the economy ... maybe its styles and fads....maybe the merchant was looking for any opportunity to shut down their aff. program (e.g., those aff. mgrs. bonuses are $$ ... LOL!)

  4. #4
    OPM and Moderator Chuck Hamrick's Avatar
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    I going to assume that -- regardless of Nexus -- the merchants that are quick to drop affs are not making much off their affiliate ANYWAY.
    You mean like Amazon, eBay and Overstock?

  5. #5
    Affiliate Network Rep JCrooks - AffiliateWindow's Avatar
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    This is an older article from Internet Retailer, long before California changed their rulings on the program, but it does show some of the process merchants go through to make their decision on dropping affiliates or not. Definitely not an easy decision!
    Jeannine Crooks - Always happy to share what I know! - Voted Best Network Rep 2013 & 2014
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  6. #6
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    Quote Originally Posted by Convergence View Post
    We don't have a nexus tax, the State of Colorado decided not to persue it.
    IS this true?

  7. #7
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Correct me if I am wrong, but it was my understanding that back around 2010 Colorado had passed a clearly unconstitutional law requiring all internet merchants to either collect Colorado sales taxes or to have to comply with onerous notification and paperwork requirement (the law was not based on an affiliate relationship), and that the law was quickly struck down by the courts.
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
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  8. #8
    ...and a Pirate's heart. Convergence's Avatar
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    Quote Originally Posted by JohnK@iFurn View Post
    IS this true?
    Yes.

    Quote Originally Posted by AffiliateHound View Post
    Correct me if I am wrong, but it was my understanding that back around 2010 Colorado had passed a clearly unconstitutional law requiring all internet merchants to either collect Colorado sales taxes or to have to comply with onerous notification and paperwork requirement (the law was not based on an affiliate relationship), and that the law was quickly struck down by the courts.
    Colorado was sued by the PMA. Judge said it was unconstitutional. Colorado decided not to modify the law to base it on a Nexus...

    http://www.abestweb.com/forums/color...ax-154974.html

    All I can remember lol...
    Salty kisses, Sandy toes, and a Pirate's heart...

  9. #9
    Affiliate Manager AffiliateWarrior's Avatar
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    according to the PMA, Colorado is looking at taking another crack at this in 2013... I think some of the generalizations thrown around in this thread are inaccurate... to say that the merchants who let affiliates go "aren't making much from their affiliates anyway" in general, with a big retail program an affiliate program may be sending in 3-10% of overall business. What is happening is that when a state passes a Nexus tax that is effective immediately, merchants are caught between a rock and a hard place. NONE of us want to part with affiliates - in most cases they are valued partners. But what's happened is that the states are so aggressive in passing these things, even often going after past years when you weren't even collecting tax because you didn't have to, that the choice a major merchant has to make is between having to pay up for sales tax on millions in sales when affiliates in that sales may have contributed thousands in sales. It's a pretty easy decision to make if you have shareholders. Doesn't make it feel good for the affiliate or affiliate manager though.
    Wade Tonkin - Affiliate Manager - Fanatics
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    Email wtonkin // at // Fanatics.com

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  11. #10
    ...and a Pirate's heart. Convergence's Avatar
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    Quote Originally Posted by AffiliateWarrior View Post
    according to the PMA, Colorado is looking at taking another crack at this in 2013...
    Have not heard anything about this, nor find anything on PMA (nor any emails). I will see what else I can find out...
    Salty kisses, Sandy toes, and a Pirate's heart...

  12. #11
    Affiliate Manager AffiliateWarrior's Avatar
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    Rebecca mentioned to me that CO is "considering it" this year.
    Wade Tonkin - Affiliate Manager - Fanatics
    NFLShop.com|Shop.NHL.com|NBAStore.com|Store.NASCAR.com
    Email wtonkin // at // Fanatics.com

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  14. #12
    Affiliate Manager AffiliateWarrior's Avatar
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    The sad thing in all of it is this - affiliates aren't "to blame" they are being used as tools by the big box guys and their lackeys the ignorant legislators who are getting sold a line of BS about how online shopping is killing local businesses and robbing the coffers of the States. Merchants are just reacting as best they can to business realities that can result in some major league hits to their bottom line and/or unplanned expense to integrate solutions to handle collection and remittance of taxes in states that often have something in excess of 200 tax districts and distinct rates for each.

    The Federal solution is what we need to push for as it would take affiliates out of the cross hairs.
    Wade Tonkin - Affiliate Manager - Fanatics
    NFLShop.com|Shop.NHL.com|NBAStore.com|Store.NASCAR.com
    Email wtonkin // at // Fanatics.com

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  16. #13
    ...and a Pirate's heart. Convergence's Avatar
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    Sent Rebecca an email...
    Salty kisses, Sandy toes, and a Pirate's heart...

  17. #14
    Affiliate Network Rep JCrooks - AffiliateWindow's Avatar
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    Colorado's New Speaker of the House, Mark Ferrandino, is hungry to restart the tax issue. Op Ed piece expected in Sunday's Denver Post. I wrote the counter piece.
    Jeannine Crooks - Always happy to share what I know! - Voted Best Network Rep 2013 & 2014
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  19. #15
    Member RebeccaMadiganPMA's Avatar
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    Yes, there is some interest in introducing an affiliate nexus tax bill in Colorado. We're trying to work this behind the scenes right now, but if we're unsuccessful we will launch a grassroots campaign. And then we'll need your help with letters and maybe even attending at a hearing. I'd recommend sitting tight until we learn more.

    Thanks to Jeanine Crooks for writing a great piece representing our side.
    Rebecca Madigan
    Executive Director | Performance Marketing Association
    o: 805.445.9700 (PST)


  20. #16
    ...and a Pirate's heart. Convergence's Avatar
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    Thank you: Rebecca, Jeanine, and Wade!
    Salty kisses, Sandy toes, and a Pirate's heart...

  21. #17
    Affiliate Manager
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    With this news, I am going to approve Colorado affiliates IMMEDIATELY. We'll hope legislation is on hold indefinitely.

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  23. #18
    Member zawadi70's Avatar
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    I am to blame for the internet tax, because I am an American citizen who did not do enough to educate the people who represent me in Washington and also Call on lawmakers to not take bribes.

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