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  1. #1
    OPM and Moderator Chuck Hamrick's Avatar
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    Department of Revenue collected so little revenue from this, less than 5% projected!
    Quote from Brian Littleton thought worth posting:
    The Department of Revenue collected so little in revenue from this, less than 5% projected - that they just stopped counting! Unacceptable governing, and we will continue to fight this bill and fight for a repeal so that affiliate marketers can get back to work in Illinois. Illinois' Amazon tax a loser - Chicago Tribune
    Two years ago, Illinois enacted what's become known as the "Amazon tax." This measure, championed by Senate President John Cullerton, D-Chicago, essentially forced online retailers to pay Illinois taxes even if they didn't have a storefront or other physical presence in the state. Under this law, working with Illinois-based marketing affiliates such as a blogger who links to your product on his site became enough to trigger an Illinois tax bill.
    As it turned out, the tax did spur economic growth in other states.
    So wouldn't a bill like this force those state affiliates to replace all of their out of state merchants with local merchants? There by driving the in-state sales and therefore sales taxes up and up?

  2. #2
    Affiliate Network Rep JCrooks - AffiliateWindow's Avatar
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    Most affiliates just got wiped out, and many moved. There also aren't always in-state affiliates who can replace those programs.

    Colorado forecast collecting $5MM in online tax during the first year. Instead, they collected $20,000.

    The concept here - using affiliates to establish nexus - is flawed. Politicians falsely assume that businesses will go through any hoops to maintain all activity, and that merchants dropping affiliates "wouldn't happen in their state." How many states will it take before they understand this? Are you listening, West Virginia?
    Jeannine Crooks - Always happy to share what I know! - Voted Best Network Rep 2013 & 2014
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  3. #3
    OPM and Moderator Chuck Hamrick's Avatar
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    There by driving the in-state sales and therefore sales taxes up and up?
    Was a bit tongue in cheek, making the point that affiliates can not just shift their business model to in-state and make the same living. Just like when I am applying for a business account they ask for my SIC code and OPM or "affiliate marketing" let alone "online marketing" aren't listed. No way to track the true impact until a state continues to decrease in tax revenue. But takes years to show up in the stats.

    Does anyone have numbers on the impact of the tax nexus on New York? Or does the state keep those numbers hidden away?

  4. #4
    Affiliate Manager CTanK's Avatar
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    This was from Reuters late last month, but I don't know how it compares to their projections:

    "Between the New York law's passage in 2008 and today, online-only retailers collected and remitted $500 million in sales tax on more than $6 billion in transactions, according to the New York State Department of Taxation and Finance."

    Full article: New York high court upholds state's 'Amazon tax' | Reuters
    best,
    Carolyn Tang Kmet
    AllInclusiveMarketing.com
    carolyn-at-allinclusivemarketing.com

  5. #5
    Affiliate Network Rep JCrooks - AffiliateWindow's Avatar
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    You got it, Chuck! I love when people who have absolutely no idea how our business works make laws that change everything for us.

    New York was the first state to pass the legislation, so although Amazon dropped all their affiliates (just like hundreds of other merchants), they did start collecting sales tax while the case worked it's way through the NY courts (FYI - next step is the US Supreme Court). Therefore the NY results are not typical of what other states have experienced.

    Just for the record, most states pursued this tax based on a study done by the University of Tennessee, which projected $11.4 billion in revenue would go uncollected in 2012. Now the latest study forecasts a potential of only $3.9 billion.

    I'd think twice before hiring the University of Tennessee to conduct a study for me, unless it was okay to be off target by, oh, 75%!
    Jeannine Crooks - Always happy to share what I know! - Voted Best Network Rep 2013 & 2014
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  6. #6
    ...and a Pirate's heart. Convergence's Avatar
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    Sad thing is, it was never about "affiliates" or links on a website leading to a merchant. If that were the case, Every PPC ad on the search engines, every site with adwords, etc would have created a nexus if those search engines had offices in a State.

    It was all about the Brick and Mortar BIG BOX stores getting their asses handed to them by Amazon, Overstock.com, etc. The politicians saw it as a money grab as the lobbyists lined their pockets and the dumb-ass media made it sound like merchants were not PAYING sales tax and that tax on those sales would end their State's financial woes.

    Just pisses me off to no end...
    Salty kisses, Sandy toes, and a Pirate's heart...

  7. #7
    ...and a Pirate's heart. Convergence's Avatar
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    But special thanks to folks like Jeannine who take the time and can get articles posted for the world to read...

    Colorado should not enact its own Internet sales tax - The Denver Post
    Salty kisses, Sandy toes, and a Pirate's heart...


  8. #8
    Affiliate Network Rep JCrooks - AffiliateWindow's Avatar
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    Why Thank You! Very kind of you to say that! I'm grateful that I had the chance to put our side out there.

    I won't ever quit fighting this, and I know you won't either.
    Jeannine Crooks - Always happy to share what I know! - Voted Best Network Rep 2013 & 2014
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  9. #9
    ShareASale President/CEO and ABW Veteran Brian - ShareASale's Avatar
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    FYI....

    The US Senate looks to vote on this as early as Monday....

    Federal Update: Marketplace Fairness Act

    On Thursday, April 18, Senate Majority Leader Reid (D-NV) filed for cloture on S. 743, the Marketplace Fairness Act, which could be voted upon as early as Monday, April 22, 2013.

    The Marketplace Fairness Act allows state and local governments to compel the collection of sales taxes that are already owed on online and remote sales transactions. The Act would not create any new tax or increase any existing tax; it simply provides for the enforcement of the existing collection authority possessed by state and local governments. Additionally, the Act aims to level the playing field between the traditional brick and mortar retailers who are required to collect sales taxes at the time of purchase and the on-line retailers who are not required to collect the sales taxes.
    Thanks,

    Brian Littleton
    President/CEO - ShareASale.com, Inc.

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