North Carolina Poised to Squash affiliate Marketers….
June 17, 2009 – 3:17 pm
I’m somewhat depressed today. My homestate, the state of my family since the late 1700s seems poised to enact legislation that will essentially squash a growing part of my annual income, namely affiliate sales. This is income that I pay state and federal income taxes on already, but apparently THAT tax revenue is not enough. Here is the email I received from amazon.com today:
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 http://www.ncleg.net/, and additional information may be obtained from the Performance Marketing Alliance at http://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
Now, to be completely honest most of my online revenue doesn’t come directly from affiliate sales, but there is more than enough there to pay for fees associated with my sites. My big concern is that this eliminates many of my revenue earning options assuming that amazon will likely NOT be the only affiliate/commission based program to do this. Clickbank, Commission Junction, etc. etc.
And my what if…. what if the terminology could be broadened to advertising networks like adsense and adbrite,etc.? I’m afraid a loose interpretation of it could EASILY do so and essentially eliminate those as revenue sources for me as well. I’ve look at senate bill 202 and frankly I have had thoughts of leaving North Carolina. It would tear me up to do that because these mountains are my home, but online revenue has grown to be 20% of my income and have been a leading hope for me to leverage online revenue from affiliate programs to pay of our debts.
The bill would essentially require any company that contracts with one or more affiliates within the state of North Carolina and garners $10,000 or more of revenue a year (not profit, revenue) to collect state sales taxes. The result will be, as amazon is already threating, a loss of income tax revenue for those of us that earn money from affiliate marketing. Thank you North Carolina, you have no cut into my livelihood.
So, my years of work promoting and building sites that earn me affiliate revenue… TOUGH LUCK.
I have written to my state senator for the first time in my life and frankly I don’t know what else to do.
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