I don’t claim to follow politics or know what the heck is going on all the time, but I can’t help but step in and say something this time. California Governor Jerry Brown is considering taxing online sales in the State of California, and as a result, Amazon is considering dropping California affiliate marketers like myself from their affiliate program.
Not cool.
This is a letter that I sent to Governor Jerry Brown, and I wanted to share it with everyone so that perhaps other Californian’s, or even those in other states that have politicians considering similar taxation, can take my lead, write your governor, congressman, whomever, and get them off this kick of wanting to tax online sales.
Aren’t things good as they are? Can’t they find some other way to balance their budgets and earn revenue? Maybe like trimming the fat a bit? Cutting their own salaries? Taking one for the team?
Ok, that last one was a jab, but I’m sure you get what I’m saying. Anyway, here’s the letter.
Mr. Brown,
Your recent decision to begin taxing California residents that make online purchases will have a secondary consequence that I want you to be aware of. I am an affiliate marketer that earns revenue from Amazon by guiding users to Amazon through various sites that I operate. It accounts for a good percentage of my income and helps me survive in this economy. Without my technical skills as a web developer, I would have lost my home and struggled to put food on my table for my family.
That said, if you pursue to tax online purchases, I will be dropped from the Amazon affiliate program, and Amazon will cease to operate in California. Any taxes you intend to obtain from Amazon sales, or many other programs as I assume that more will follow Amazons lead, will essentially provide less income than you probably expect. Not only that, but it will severely cut into my income and put me back to struggling.
I voted for you, but I do not agree with your position on this particular issue. I have already been alerted by Amazon that I will be dropped from their program if this law passes.
I do hope you seriously weigh the consequences of this action, as I am not alone in this. We Californian’s are already struggling, and this will only hurt us more. Please avoid this topic and allow things to continue as they are today. If you need tax money to fill California coffers, perhaps you can tax and regulate marijuana, which to me seems an obvious choice and should fill California coffers nicely…more than taxing online sales would I suspect. Since online sales can shift easily to avoid the taxes…like halting sales altogether in the states that will begin taxing them.
I don’t claim to know the entire issue, but I do know what will impact my family and I. Your decision here can be positive for my family, or negative. It’s your choice, and trust me when I say, I don’t vote for those that hinder my own prosperity and growth.
Thank you for your time, and please consider this plea with the livelihood of Californian’s in mind.
Best regards,
Wayne John
www.waynejohn.com
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Update - I decided to throw in the email I received from Amazon as well to round out this post.
Hello,
For well over a decade, the Amazon Associates Program has worked with thousands of California residents. Unfortunately, a potential new law that may be signed by Governor Brown compels us to terminate this program for California-based participants. It specifically imposes the collection of taxes from consumers on sales by online retailers – including but not limited to those referred by California-based marketing affiliates like you – even if those retailers have no physical presence in the state.
We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.
As a result, we will terminate contracts with all California residents that are participants in the Amazon Associates Program as of the date (if any) that the California law becomes effective. We will send a follow-up notice to you confirming the termination date if the California law is enacted. In the event that the California law does not become effective before September 30, 2011, we withdraw this notice. As of the termination date, California residents will no longer receive advertising fees for sales referred to Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com. Please be assured that all qualifying advertising fees earned on or before the termination date will be processed and paid in full in accordance with the regular payment schedule.
You are receiving this email because our records indicate that you are a resident of California. If you are not currently a resident of California, or if you are relocating to another state in the near future, you can manage the details of your Associates account here. And if you relocate to another state in the near future please contact us for reinstatement into the Amazon Associates Program.
To avoid confusion, we would like to clarify that this development will only impact our ability to offer the Associates Program to California residents and will not affect their ability to purchase from Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com.
We have enjoyed working with you and other California-based participants in the Amazon Associates Program and, if this situation is rectified, would very much welcome the opportunity to re-open our Associates Program to California residents. We are also working on alternative ways to help California residents monetize their websites and we will be sure to contact you when these become available.
Regards,
The Amazon Associates Team
Wayne John is a health coach for people that want to lose weight, gain weight, improve athletic performance, or simply maintain a healthy lifestyle. Wayne has lost over 55 pounds and improves his current health every day by using simple, straight-forward techniques that anyone can integrate into their lives to achieve the same. Contact Wayne today to realize your own health and fitness goals, or get started now by completing and submitting the free Wellness Profile. He also has been developing websites since 1995 and programming solutions for clients even longer. He'd rather be outside having fun in the sun though.
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Twitter: www.twitter.com/tracyrepchuk
I was shocked when I too received similar letters from affiliate programs I am involved with. This is ridiculous and an outright attempt to continue to overtax the California public. I moved from Canada – looks like it might be better to move back where that is becoming the land of the free.
I must agree with Tracy. I could not describe my shock when I heard about it.
I still don’t understand the benefit that this law can bring, can someone enlighten me?
Twitter: b0blee
FWIW, last week they lowered the California sales tax by 1%. Some things just make no sense.
Twitter: ersie
gonna happen anyway. happened in ny, the brick-and-mortar businesses felt disadvantaged by Amazon et al
Dang dude, that’s messed up. I would have never have guessed a side affect of states taxing online sales would cause HUGE online retailers like Amazon to drop their affiliates from that state. Great letter written by you as usual. Being an online retailer and affiliate as well, I’lll keep my fingers crossed for you and hope Georgia doesn’t join this ridiculous band wagon.
Twitter: waynejohn
Hope it doesn’t for you as well. I’m looking into starting a Nevada corp now. Jerry Brown and California won’t get my tax dollars, Nevada will. ftw! hahaha
I stay in CA and i am not in support of the online sales tax. The offline sales is already enough. I will be moving out of Cali if this online tax goes ahead.
I don’t live in California, but I must say it’s ridiculous! Usually people just criticize these kind of decision but no one does anything. I’m not saying you’ll have any success with your letter, but it’s a great thing when people take action and ask for their rights! Congrats on that!
Maybe you should make an online petition too, it should have a bigger impact.
Twitter: waynejohn
I’m not one to spend my time fighting the bs that happens in politics….there are plenty of those out there that do already. I’ll join an existing band-wagon. Perhaps later in life when I have more time I’d do that.
This just directly affects me, so part of this is an emotional response too, I have to acknowledge that.
Thanks for taking time to comment, John!
They aren’t just considering it, they did it. Less than 12 hours after receiving the warning from Amazon, I got another letter stating that it was over. Less than 12 hours warning. I built huge book related web sites with a view to monetizing through amazon, and they have basically flattened my work in an instant.
I resent Amazon for this, I feel as though I’m being used as a pawn in their ‘protest’. Amazon feels that the tax increases are due to lobbying by box-retailers, in other words their competitors. And so they are doing this to raise some noise. I’m not buying that Amazon needed to drop the axe, and it leaves me thinking that they don’t care less about their affiliates.
Twitter: JeffCasmer
Well I live in Illinois and we just got the online sales tax and the state sales tax which isn’t good for people who work and make money online. People want to blame our former governor but I think its all part of a bad economy and sources looking for more money from the working class
Twitter: sanjaykhemlani
this is really messed up politics you’ve got! I mean it will hurt a lot of people who works just like you. Hope other state and country won’t do this. I really hope so.
Hi Wayne
I’m not from California but I sympathize with you. If they would do the same here on my city, I would really be mad. Unreasonable tax!!!
As always it’s the little guys who take direct hits. I can guarantee that this will in fact LOWER tax revenues as we all know the big corportations will just shift their earnings overseas.
Twitter: b0blee
Internet sales should be treated exactly as mail order sales. Think about it. They are the same thing. The only difference is that the order information and payment is arriving via the internet instead of by USPS.
We already have sales tax laws in place concerning mail order sales. Apply them equally to internet sales. Why should internet businesses get special treatment, one way or the other, when compared to mail order?
I have some customers who fill out the order form online, print it, and mail it with a check or money order. Why should they be treated differently from people who pay via the internet? I ship the same product to both.
Amazon should respect mail order sales tax laws. Their merchant UI doesn’t even allow me to set up sales tax for California customers which I, as a California business, am obligated to pay. This pisses me off because I am paying sales tax that I could be passing on to the customer.
I’m really shocked that Californians don’t make a bigger fuss about this. How on earth is is legal to discriminate Internet customers. How is that democratic ?
Twitter: finallyfast
I understand that you don’t want to be dropped from Amazon’s affiliate program, but disregarding that aspect, is including a sales tax for buying products online really all that bad, or even a big deal at all? A small tax added to products like we pay in stores doesn’t seem like it would be all that destructive… it seems like its Amazon who could maybe also be taken to task for dropping everyone from their program simply because a sales tax is being added. I’m not saying I necessarily agree with the tax, just sort of playing devil’s advocate and saying maybe Amazon bears some responsibility as well for just dropping everyone in CA like that??
Twitter: finallyfast
I’m kind of wondering, is a small tax on products you buy over the internet really that destructive or outrageous of a notion? I’m just saying maybe Amazon deserves some of the blame here for simply dropping all of its CA affiliates just because they are going to a sales tax… maybe other states will follow suit. I’m not saying I agree with the tax necessarily, I’m kind of playing devil’s advocate here. But I do think people in this country are overly concerned, or perhaps obsessed, with the notion that they are being “over-taxed”, when in fact the US has the 2nd lowest tax rates in all of the industrialized “western” world. Just a thought : ) (this is the 2nd time I typed this, the first time I hit submit I was given an error)
Twitter: waynejohn
Was that a 500 error? White screen of death?
There are a lot of politicians who are doing this…it can help destroy the economy of the country…
Of course it’s democratic that means 51 % percent majority rules. A republic on the other hand protects the minority no matter how small they are. I wonder how many of the people who complain about this issue think it’s is fine to tax the heck out smokers.
Hmmm this is quite alarming, our politicians just think of something which they can benefit from but they don’t even know what will cause us with that!
That just sucks. Why don’t they just focus on other topics like Arnold Schwarzenegger. Why does it always have to be us that suffers. These Politicians just need an uproar so that people can recognize them for the future. Selfish As******…
This is really not cool. Having online tax is already a lot to take. Moving to a different country might save me from this taxes.
I must say this is totally unfair. The government should turn to big companies instead of ordinary residents.
Politicians always promise us some things…But they forget that they have made that specific promise for all the people…
Twitter: dayafterstore
Having just moved into one of the handful of states (North Carolina) whose residents Amazon does not allow to participate in its program, I understand your plight. But to tell you the truth, even when I was eligible for its program, I always thought that its payout rate (starting at 3%) was kinda low.
So, yes, Amazon has good name-recognition and converts well. But I’m just as content now going with the programs of other big-name e-tailers that pay a little better…
Twitter: c0achmcguirk
It’s for this reason I am reconsidering the use of Amazon Affiliates on my web page. I’ve thought about looking into other affiliate programs, though, and none of them have the ease and payout of Amazon.
I’ve been thinking about getting a PO box in another state in the case that my state tries to do the same thing and Amazon drops us.
Twitter: waynejohn
I’m not sure just a PO box will hold up, legally. It might get you by for some time, but the IRS will probably come down hard on you when they do an audit.
I’m doing a bit of reading on this. If I come up with a solution that actually works, I’ll share it here.
Twitter: c0achmcguirk
I know you’re probably right, but what about all those businesses that incorporate in Nevada or Delaware due to their lax tax laws?
I worked for a company that was publicly traded (may it rest in peace) and had “a Delaware Company” printed on anything with our letterhead–and there wasn’t a single person employed by the company who lived in Delaware. We were based in Omaha, NE–not even close to Delaware!
This really sucks. Sorry to hear Amazon canned your account. I was planning on promoting Amazon but now my plans are shot, too. Taxes in CA are soooo high already. I mean the sales tax is almost 10%! What’s really sad is that CA is already suffering with very high unemployment. This will not make matters better. Plus, people who aren’t unemployed are still struggling. Saving 10% here or there really does help.
You have done great efforts by bringing the matter to the notice of governor. I fear that other states may also come up with similar tax laws.
I was always told to spread my eggs, therefore I’ve got my business both in the US and the UK. Had to refuse working with Amazon for now. Hope the things will change soon.