Amazon Ends Affiliate Relationship in Illinois
Well, I guess you can say Amazon is good to it's word when they say that they would end their affiliate relationship with affiliate marketers if Illinois put through the Internet sales tax.
As I stated in an earlier post the Illinois state government wanted to start collecting sales taxes from affiliates in the state, for all sales made by Illinois residents. How many affiliates will this affect in Illinois? 9000.
So far, Amazon has closed its affiliate program in: Colorado, North Carolina, Rhode Island, and now Illinois. Will other states look to the Internet to close their deficits? They are trying.
California was considering the same such move. However, Amazon threatened to choke off their affiliate marketing program in California if (10,000 affiliates would be affected in that state) state lawmakers proceeded with legislation that would require the Internet retailer to collect sales tax from their state residents.
California, not deterred, decided to have a study done, to see the revenue affects it would have on their state. According to a study by the State Board of Equalization Staff Legislative Bill Analysis in CA it showed that if Amazon shut it's affiliate program down, it would affect the state adversely. It estimated that Amazon currently comprises roughly 50 percent of the Internet sales of large firms who have no
residence in California.
If Amazon and Overstock stayed on board and other people continued to sell on Ebay, the sales tax that California would collect would be:
$152 million in 2011-12
$317 million in 2012-13
Since Amazon stated that they would not continue their affiliate program, the revenue would shrink to:
$114 million in 2011-12
$234 million in 2012-13.
Mind you, that is just Amazon. If other online businesses followed the same path as Amazon, the revenue would be further diminished. In addition, the termination of the program would further lower revenues because it would adversely affect employment, which would translate into less revenue from personal income taxes and corporation taxes.
I wonder if the other states did a comparison study?
In addition, Texas slapped a $269 million bill for uncollected sales taxes at Amazon distribution center in Texas. Amazon threatened to close the doors on the distribution center if they proceeded with the billing.
Why is Amazon proceeding in this manner? They feel the law is unconstitutional and there is a U.S. Supreme Court ruling in 1992 that is also relevant. The ruling stated that retailers can't be forced to collect sales tax on out-of-state shipments unless they have offices in those states.
Eventually, this issue will have to be addressed by Congress. Don't you think.
Monday, March 28, 2011
Monday, March 21, 2011
Is Article Marketing Still Viable?
Is Article Marketing Still Viable?
Since the Farmer/Panda update, people who have been only utilizing article marketing as their method of advertising my be in crisis mode. And, what many may utter is "Is Article Marketing Dead", or "Is Article Marketing Still Viable?"
Article Marketing is not dead, and yes, it is still viable. However, if you are still spinning and mass producing your articles to be spread over 1000 of article directories, you may have to pull back on the thought. In the short term, at least, you'll find that the article directories link power has been devalued. That doesn't mean you stop your article marketing, it means you have to be a little more selective in your choices of article directories.
I've written an article called "Is Article Marketing in Crisis" it will give you an idea of what you need to do to improve your site, as well as, marketing your site through article marketing.
Since the Farmer/Panda update, people who have been only utilizing article marketing as their method of advertising my be in crisis mode. And, what many may utter is "Is Article Marketing Dead", or "Is Article Marketing Still Viable?"
Article Marketing is not dead, and yes, it is still viable. However, if you are still spinning and mass producing your articles to be spread over 1000 of article directories, you may have to pull back on the thought. In the short term, at least, you'll find that the article directories link power has been devalued. That doesn't mean you stop your article marketing, it means you have to be a little more selective in your choices of article directories.
I've written an article called "Is Article Marketing in Crisis" it will give you an idea of what you need to do to improve your site, as well as, marketing your site through article marketing.
Sunday, March 13, 2011
Illinois - and the Internet Sales Tax
Illinois - and the Internet Sales TaxGovernor Quinn signed HB3659 into law which forces out-of-state retailers to collect Illinois state sales taxes on Internet sales.
This law states a view that an affiliate marketer constitutes a tax nexus for retailers. (A nexus is used in tax law to describe a business that has a presence in a state, and which makes this business subject to state income taxes and sales taxes for sales within that state).
How does this law affect affiliate marketers in Illinois? It may put them out of business. How? Well, as can be expected the target of this law seems to be online retailers like Amazon, who do not have a physical presence in Illinois. And this law may have the same consequences as it had in other states.
When other states have put in to place this same type of legislation, Amazon and other online businesses removed the affiliates of that state from their affiliate programs because they did not want to assume a tax nexus. No tax nexus, no additional tax revenue paid by the online business.
If Amazon and other online retailers fire their affiliate marketers, it could mean a lose of income or a business for the online entrepreneur, and a lost of revenue for the online retailer. And for the state, a lose of tax revenue.
Who wins? No one, in my opinion.
Wednesday, March 09, 2011
State Internet Tax Initiatives-A Quick Note
State Internet Tax Initiatives- A Quick Note
Around the US there are various state Internet tax initiatives underway. Some of these pending state laws that are being written can inspire (as in earlier cases) Advertisers to remove Publishers from their Affiliate Marketing programs. Why? They don't want to deal with the taxes.
Currently the PMA (Performance Marketing Association) is working to represent the interest of Publishers. This Association have, in some cases, been successful in stopping these laws or having them changed in ways that benefit online retailers and Publishers.
Currently the following states have Internet tax initiatives pending:
Well, as I stated at another time, states are looking for ways to fill their empty coffers, and what better place to look than the Internet. Be aware of the laws, because it can affect your affiliate business.
I wonder, if more and more states begin to enact Internet tax initiatives to get a piece of the Internet pie, will advertisers have to begin to accept the tax fact, instead of deciding whether to eliminate those publishers from their affiliate business? Maybe, if their profit drops, there may be some rethinking. Time will tell.
Around the US there are various state Internet tax initiatives underway. Some of these pending state laws that are being written can inspire (as in earlier cases) Advertisers to remove Publishers from their Affiliate Marketing programs. Why? They don't want to deal with the taxes.
Currently the PMA (Performance Marketing Association) is working to represent the interest of Publishers. This Association have, in some cases, been successful in stopping these laws or having them changed in ways that benefit online retailers and Publishers.
Currently the following states have Internet tax initiatives pending:
- Arizona
- Arkansas
- Massachusetts
- Minnesota
- New Mexico
- Texas
Well, as I stated at another time, states are looking for ways to fill their empty coffers, and what better place to look than the Internet. Be aware of the laws, because it can affect your affiliate business.
I wonder, if more and more states begin to enact Internet tax initiatives to get a piece of the Internet pie, will advertisers have to begin to accept the tax fact, instead of deciding whether to eliminate those publishers from their affiliate business? Maybe, if their profit drops, there may be some rethinking. Time will tell.
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