While the issue of Amazon.com canceling its affiliate relationship with all the Amazon Associates members based in the state of Colorado has already been covered here on HuffPost (see The Real Story on Amazon and Colorado), I wanted to bring a more personal perspective to the story because I am one of the affiliates who received the fateful notification from Amazon.
I signed up for the Associates program so many years ago that I can't remember a time when I didn't add an affiliate link to my blog entries about my books or just about anything else they sell that I wrote about. More recently, when I mentioned a cool gadget on Facebook or Twitter, I'd take the extra sixty seconds to make it an affiliate link because, well, why not earn the extra few pennies in revenue?
Fortunately, Amazon.com has never been a major revenue source for my online businesses (AskDaveTaylor.com), partly because their margins are so extraordinarily thin that my commission on a $50 sale wasn't even enough to buy a can of soda. Still, after years and years of membership in their program, I certainly didn't expect to be a pawn in the tussle between Amazon and the Colorado legislature, revolving around Colorado Bill HB-1193, but that's just what I've become.
Thanks a lot, Amazon. I thought we had a working relationship, but I guess I was wrong.
Here's what's so ironic: as Carol points out in the earlier Post article, Amazon firing all of us Associates doesn't change anything about their tax liability in the state. The only way they can affect that is to simply stop selling product to everyone in Colorado. Since they're not going to do that, they have instead decided that the collective loss of affiliate revenue from hundreds of Associates will cause enough pain that the legislature will revoke the law. I doubt it.
I'm not the only Associate who is upset with the situation. Nicki Hayes of Memolink shares this with me:
Memolink.com is fearful other online retailers will simply follow Amazon's actions and (wrongly) terminate their relationships with all Colorado affiliates. We are identifying and promoting merchants that are either already collecting sales tax in Colorado, or have carefully read the bill and recognize there is no need to terminate our relationship.
Everett Sizemore of CompareTheBrands.com has an even more radical response: he's hastening his move out of Colorado. His business was earning thousands monthly from Amazon and he can't afford the loss of revenue. He draws an interesting parallel:
Would you charge Colorado sales tax to everyone who buys a Volvo, no matter which state they buy in, simply because they subscribe to a magazine in which Volvo advertised, which just happens to be published in the state of Colorado? Compare The Brands is an online review publication that compares the features, quality and price of similar products made by different brands. The website is not hosted in Colorado; the visitors do not typically live in Colorado; and the merchants are not typically located in Colorado.
Colorado certainly doesn't want to lose entrepreneurs nor does it want to be unfriendly to new Internet business startups, but in this instance I have to say that it's Amazon, not the state, that's acting like a petulant child. The original HB-1193 was terrible and the final bill that was signed into law by Colorado Governor Ritter isn't much of an improvement, but the problem is inherent in the lack of an online sales tax (which Amazon has stated it's willing to pay, by the way).
Meanwhile, I get to be a pawn in this situation, an income stream shut off not because my continued participation in the Associates program somehow means Amazon will owe Colorado sales tax, but just because in the grand chess game, I'm apparently disposable.
Ya know what? It sucks.
Follow Dave Taylor on Twitter: www.twitter.com/DaveTaylor
I don't want to spend the next few months promoting my affiliate program if I'm going to be dropped when MA decide to follow in Colorado's footsteps.
Amazon has no liability in our state. They eliminated even a possibility of this when they terminated the affiliates program in Colorado. Amazon is a business in Washington state with no physical presence in Colorado. Colorado politicians have no jurisdiction over the business practices of a Washington state business.
The tax liability you refer to belongs to the Colorado consumer. Amazon has no blame in this charade. They are simply protecting their business from Colorado politicians.
No more libeling Sarah and I'll treat your wordy bluster as common sense too.
The Colorado government -- our legislators and governor -- created this mess by its imposition of an "Amazon Tax" with HB 1193. Given its Colorado-based affiliates, that law would have crippled Amazon with an onerous and expensive confusion of red tape, plus a crazy patchwork of local taxes. The only way for Amazon to extricate itself from that nightmare was to terminate the Affiliate Program.
I've posted about it to my blog:
http://www.dianahsieh.com/blog/2010/03/colorado-screws-amazon-and-its.shtml
And Ari Armstrong has a long post here, with some excellent analysis of the law:
http://blog.ariarmstrong.com/2010/03/stop-amazon-tax.html
I've also created a super-quick web site. The "Amazon Tax" must be repealed!
http://www.RepealTheAmazonTax.com/
If you want to help pressure the Colorado legislature to repeal this awful law, please join the low-volume e-mail list, NoAmazonTax:
http://groups.google.com/group/noamazontax
Please spread the word!
-- DMH
Diana Hsieh (Ph.D, Philosophy, CU Boulder)
E-mail: diana@dianahsieh.com
NoodleFood: http://www.dianahsieh.com/blog
NoodleCast: http://www.dianahsieh.com/cast
I, too, think the legislation was poor and poorly-timed. However, Amazon owns and operates Target's website, which does collect sales tax. The statement quoted above is patently untrue. Amazon is already well-equipped to do so.
And in any event, this burden is not related to the affiliate program in any meaningful way. While I'm certainly letting my representatives here know about my take on this legislation, I am not blinded to the simple fact that Amazon's termination of its relationship with Colorado affiliates was done out of pure spite.
I have maintained an account with Amazon for years, and have spent thousands of dollars there. As of yesterday, I have closed that account with a clear communication to Amazon as to why I have chosen to do so. Two wrongs, a right, etc. I will not do business with such an organization. I may not cheerfully pay more via other outlets, but I'll do so with a better conscience in relationship to my fellow Colorado citizens.
http://www.leg.state.co.us/CLICS/CLICS2010A/csl.nsf/fsbillcont3/B30F574193882B4B872576A80026BE0C?Open&file=1193_01.pdf
But I'm not clear whether it's the original bill as proposed or the final law that was signed by the Governor, Brian.