Amazon Cuts Off North Carolina Affiliates 411
Amazon.com has reportedly cut off all affiliates in North Carolina as a preemptive response to the sales tax change being pushed through the state legislature. The Seattle-based online retailer warned affiliates last week that such a move might be necessary, but the early shutoff seems to be a move in hopes of swaying opinion on the proposed legislation. "Local affiliates say they were 'blind-sided' by the company's action. 'I got this e-mail at 4:30 this morning,' said James Barrett, a technology consultant from Winston-Salem. 'It wasn't saying your account will be shut down. It said it is shut down. That just blew me up right there.' Barrett said that he is frustrated at lawmakers for considering the tax, but equally aggravated with Amazon. 'They're trying to tick off all their associates and get them to call down to Raleigh,' Barrett said. 'I think that is pretty tacky. That's not the way to use people who are referring business to your business.'"
They Had Warning (Score:5, Informative)
Local affiliates say they were "blind-sided" by the company's action.
I'm sorry, sir, I normally restrict myself to civil language but you are so full of shit.
I don't even live in North Carolina and recalled reading about 'warning' letters sent to you [accountingweb.com]. Maybe you should open up your e-mails from June 17-18:
We regret to inform you that the North Carolina state legislature (the General Assembly) appears ready to enact an unconstitutional tax collection scheme that would leave Amazon.com little choice but to end its relationships with North Carolina-based Associates. You are receiving this e-mail because our records indicate that you are an Amazon Associate and resident of North Carolina.
Please note that this is not an immediate termination notice and you are still a valued participant in the Associates Program. All referral fees earned on qualified traffic will continue to be paid as planned.
But because the new law is drafted to go into effect once enacted -- which could happen in the next two weeks -- we will have to terminate the participation of all North Carolina residents in the Amazon Associates program on or before that same day. After the termination day, we will no longer pay any referral fees for customers referred to Amazon.com or Endless.com nor will we accept new applications for the Associates program from North Carolina residents.
The unfortunate consequences of this legislation on North Carolina residents like you were explained in detail to key senators and representatives in Raleigh, including the leadership of the Senate, House, and both chambers' finance committees. Other states, including Maryland, Minnesota, and Tennessee, considered nearly identical schemes, but rejected these proposals largely because of the adverse impact on their states' residents.
The North Carolina General Assembly's website is www.ncleg.net and additional information may be obtained from the Performance Marketing Alliance at www.performancemarketingalliance.com. We thank you for being part of the Amazon Associates program, and we will apprise you of the General Assembly's action on this matter.
Sincerely,
Amazon.com
You were warned! Tell us, James Barrett, how many letters did you sent to your representatives demanding they strike down this unconstitutional tax?
Yes, it came early. But you were warned. Unwittingly operating for one day could set Amazon back thousands if not tens of thousands of dollars. They tried blocking it with litigation in New York and they lost. Don't get made at them for playing it safe, you have no one to blame but your elected officials.
The only way to make sure (Score:5, Informative)
is by biting them where it hurts: their pockets. You can add all the sales tax on out-of-state purchases you want (whether that is federally allowed -- I'm not sure), if you don't sell anything, you don't have anything to tax so revenue will remain 0.
They probably saw what happened in NY and they don't want it to happen everywhere. Amazon decided to add tax to NY purchases and me and a lot of other people stopped purchasing from them because other stores (like NewEgg, TigerDirect and Geeks) were undercutting them by about 8%. Even though my organization is tax exempt I don't purchase at Amazon simply because they don't have the provision for me to state that I am tax exempt.
Re:They Had Warning (Score:4, Informative)
North Carolina state legislature (the General Assembly) appears ready to enact an unconstitutional tax collection scheme
For those who don't want to RTFA:
The tax provision that Amazon objects to would apply sales tax to purchases made through such click through transactions from Web sites run by affiliates based in North Carolina.
Re:Actually, I think it's a great tactic (Score:5, Informative)
We're seeing more and more of this retaliation.
Green Day recently declined to make a censored version of their album to meet Wal*Mart's demands. Wal*Mart thought that they could strong-arm anyone into making an non-explicit version. But lost out, because the album is doing quitewellthankyouverymuch.
On a more historical note, the founders of this great nation realized that smuggling was a good thing. As taxes became oppressive, the more reason there was for smuggling. They saw it as a great balancing factor. They state had to choose to keep the taxes low, or let a larger amount go untaxed, in addition to a drop in sales, like they are seeing with the new tobacco taxes.
The current government is advantaged because of electronic record keeping, where some SQL statement can spot discrepancies for additional investigation.
But there is no reason why the governments should have license to grow when its supporting economy just dropped 20%. To argue otherwise is to argue that you can tax a nation into prosperity, or that you can lift yourself up by your boot straps.
I applaud Amazon for having gravitas. I also wish the best for those affiliates in NC. Hopefully they will speak up and fix the taxation, or NC will learn to go without.
Re:Excuse? (Score:5, Informative)
I'm sure people in NC would agree to pay rather than stop doing business. There is something fishy in this case.
The "something fishy" is that NC wants to tax Amazon--not the local associates--as if they had a presence in the state, based on their relationships with local associates (who are undoubtedly already paying NC taxes). Ergo, Amazon is severing its NC-based associate relationships to avoid any appearance of a taxable in-state presence.
I doubt that these taxes on out-of-state businesses are even remotely Constitutional, but I don't blame Amazon for playing it safe.
Re:What about NY? (Score:3, Informative)
From what I understand the proposed NC law actually says that anything sold to anyone via an NC affiliate link would need to be taxed. So if someone lived in PA and bought something from Amazon, if they went through a NC affiliate link, it would be taxed by NC. This is not only taxing those items purchased by NC residents, but also people in other locations.
To make matters worse, if I lived in NY and then bought something via an NC affiliate, it would be taxed by both NY and NC.
This is why I suspect that Amazon cutoff the NC affiliates but not the NY ones.
Re:blindsided? (Score:4, Informative)
Re:That's the real meaning of "voting with your fe (Score:3, Informative)
Once some government erects a new law / regulation / tax / bureaucracy / program, it's harder to get rid of than mildew.
It's true, I have often found it takes a lot more Lysol to kill a legislator than it does to kill mildew.
Re:That's the real meaning of "voting with your fe (Score:4, Informative)
Re:That's the real meaning of "voting with your fe (Score:5, Informative)
Comment removed (Score:5, Informative)