While this is my first post about the Affiliate Tax Issue, this is by no means a new issue by any stretch of the imagination.
Last year, New York passed the coined, ‘Amazon Tax Law’ which says that if a company, lets say based in Indiana, has affiliates producing $10,000 in revenue a quarter in New York, the Indiana based company now has a nexus in that state, and must pay sales tax to the State of New York. When this happened, Amazon filed a law suit, appealing the new law, however, Amazon did not succeed.
Throughout this year, similar laws are being brought before State after State. Some, such as California, triumphing over the impending legislation, at least for a short while longer, while others, such as North Carolina and Hawaii, are battling it out as we speak.
Amazon has been among the first to drop affiliates, or warn affiliates that they will be dropped when the legislation progresses, but are they really just warning affiliates. Is there something more to it? Is Amazon, whether on purpose or not, threatening States?
If North Carolina passes this bill in the next couple of weeks, Amazon has already sent out notice earlier this week that they will, without hesitation, drop North Carolina Affiliates. North Carolina, take this notice from Amazon as a warning, all of the planned tax dollars that you are expecting to see …. Gone. North Carolina, you won’t see it. It won’t make up for that gap you are trying to fill in your budget, and you will only add to your state resident’s financial woes, including smashing a portion of your small business based in your state.
Hawaii, the same goes for you, and any other state that is considering any type of legislation like this.
While I understand that states are trying to claim sales tax that they feel is rightfully theirs, this is being done the absolute wrong way. States, step back, take a look at what you are doing to your local small business, to your relationships with your citizens, then re-evaluate what is important, and make a plan that will actually work, on an all encompassing federal level.
Heed Amazon’s warning, don’t pass these types of legislation. You will not gain what you are hoping.
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