Amazon Calls NC Lawmakers Bluff, Cancels Affiliate Program Early

The bad part of this is that in the end it will only hurt the state of North Carolina and its residents. I would say many affiliates will just decided to move if they rely on affiliate income. New York tried this same thing and all that happened was they lost tax revenue due to everyone involved who would pay more taxes just simply moving to neighboring states.

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IMHO, Amazon made a wise decision. Their threats to stop operating in states passing these laws were not being taken seriously and most felt that pending state sales tax laws were inevitable. Even if it doesn’t work it will at least raise attention and slow things down.

I suspect few really think about all the time, money and effort affiliates put into promoting programs – work that goes out the window whenever a program is cancelled or substantially changed.

We are going to see these types of issues play out over and over both online and off. The more government agencies try to make up for reduced incomes due to the economy the more they will raise taxes and generate yet more declines.

An example that makes this easy to understand is the toll road situation in Dallas. As drivers use toll roads less to save money, toll road income declines so they raise the tolls which will result in more drivers using them even less. This will cause a downward spiral.

We created this economic situation because of the “Wal-Mart” cheap philosophy. The more we drive prices down the less everyone makes and the more the economy contracts. We could choose to have an abundance philosophy instead. By being willing to pay for the true value of what we buy incomes will rise and the economy expands.

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NC lawmakers do not understand the internet. If you asked 100 legislators to explain what affiliate marketing is, I bet 80 percent of them wouldn’t have a clue. Before Amazon closed all NC affiliate accounts, the state of NC was receiving state income tax revenue from AMZN affiliates. Now that AMZN has closed all NC based accounts, the state has lost that revenue stream. Worse, it has angered affiliates and presented itself as a state that’s unfriendly to technology and small business.

Other states (including MD, MN, and TN) have considered nearly identical tax schemes, but rejected these proposals mainly because of the negative effect on their states’ residents. NC lawmakers need to educate themselves about the reality of the internet and how it affects their residents. As Linda said, it’s a lose-lose deal for everyone involved — for affiliates, for AMZN, and for NC tax revenue.

Great! Not only have I lost my job this year, (which means I am paying less income tax) but now they have eliminated a major part of the remaining income I had, and which I paid income taxes on.
What’s next, Google closing down the Adsense for publishers program for affiliates in North Taxolina? That would reduce reduce my income to effectively zero.
Guess I’ll just have to start collecting welfare instead.
Way go go, Beverly! Stealing the Education Lottery proceeds wasn’t enough for you?
I think it’s time I moved to New Zealand.

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In every dark cloud, there is a silver lining: A potential opportunity for some individual in a non-affiliate taxed state.
If some enterprising individual wants to start a business providing a ‘permanent’ mailing address, like a Mailboxes etc. for NC affiliates to use as their new permanent address in another state, that might get around this stupid tax law by placing the affiliates ‘outside’ of North Carolina.
It may not be entirely legal, but I’m sure that it would make for a heck of a court case and would take years and years to resolve.

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Taxation has very little to do with revenue but a great deal to do with control.