Loading ...The impact of the California online sales tax law that was recently passed is still being felt. The law nicknamed the “Amazon Tax Law” requires online retailers to pay taxes on their affiliate advertising. Once the law was passed, Amazon, and many other online retailers, dropped their affiliate programs in the state to avoid the tax.
Nick Loper is one affiliate marketer that saw his life drastically change as a result of the law and the action from online retailers. As he explained to WebProNews, he lost 70 percent of revenue from his comparison shopping site ShoesRUs, essentially, overnight.
For this reason, he packed up and moved to Nevada, which has no online sales tax, to start a new business called ShoeSniper.
Just goes to show you how stupid politicians really are, politicians say “how can we generate revenue to pay for our extravagant spending”, lets tax affiliates, Poof, as soon as they pass the law, all affiliates are gone. They all saw the same thing happen in other states before they passed this law, what did they think would happen, totally idiotic, Lets all keep voting these kind of people in all over the country so we can see how bad it can really get.
I can’t see how they can say that an affiliate is enough of a “location” to enable the collection of sales tax when the website an affiliate runs is usually located on a server elsewhere. Then there’s the question of the federal government interfering yet again in state business, as they will if this national sales tax is passed (and who wants to guess how much dough will filter down to state level????)
The whole thing is ill conceived, especially since sales tax of any kind is the most regressive tax of all, and hurts the poor a whole lot more than it hurts the rich.
States should look to North Dakota’s example. They didn’t suffer any revenue issues with this recession that acts more like a depression. Why? North Dakota has a State Bank, and actually collects revenue on collected tax money instead of using it to pay debt service. It also insulates State governments from Wall Street influence and The Fed influence.
As the Beatles wrote in the song ‘Taxman’ – ‘I`m the taxman, and you`re working for no one but me’.
Governments should not be allowed to add taxes when ever they want without a vote by the people.
Like another comment I`ve read -it only hurts the poor – and what do they think affiliates are rich.
There may be a few but most are not.
There are some who can barely make ends meet as it is and this is why they`re trying IM to help them survive.
Give the poor a break once and a while and quit taxing so much, start cutting some senators needless perks if they can`t do their job without raising taxes again.
And take away more if they continue.
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I think the bigger picture is going to be that affiliate programs will follow 3 paths.
1… The company offering the affiliate program just shuts it down and uses other ways to sell there products.
2… The affiliate has there commissions reduced to cover the cost of the taxes and then some.
3… The customer has to pay more to cover the taxes that everyone is having to pay.
It’s a dumb law with no understanding that the company making the profit and the affiliates making the profit, are already paying taxes on their income. I too know of a person who turned their internet and life off in Arkansas and set up in another state as well, due to their laws causing the companies he affiliated for, dropping him like a lead balloon.
A good head’s up to Affiliate Marketer’s in any state. How this is playing out has varied by different legislation and from state to state. ANY business model’s fortunes can change on a dime, so staying abreast of Sales Tax Nexus legislation that may be pending is wise.
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