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Amazon Fired Me & All Other California Affiliates

Amazon Fired MeI not only live in California, I’m a 3rd or 4th generation native, depending on which story you accept. Like 10,000-25,000 others (depending on the source) Amazon thanked me for being an affiliate by terminating my account. I am not alone.

Like other long-term affiliates I remember when, for example, they were so grateful they sent me a cup to keep my coffee warm, and, when postage rates went up, some stamps.

They were a scrappy new company determined to be of service.

As they grew, things changed. Commissions dropped, commission-less used books showed up. Like many I stuck with them.

I’ve never made much, but I never worked at it very hard either. I backed them because they invented so much of the ecommerce we all use today.

Amazon fired us because Gov. Jerry Brown signed a law that will require Amazon to collect state taxes from “customers.” As an affilate, I’m apparently a customer.  So far, however, Amazon isn’t refusing to sell books to me as an individual and so far they are not adding any tax. That will probably change.

I guess I’m a political pawn, although it may be because I’m legally a ‘physical presence’ in the state.  Amazon, along with Overstock.com and I’ll bet others soon are firing their affiliates in an attempt to get California to drop this law. Which is actually a bigger battle about taxing the internet.

Should the internet be taxed? I don’t know. WebProNews has an article of the same title. Will the GOP resist this kind of tax? I doubt it.

I vaguely remember the taxes on internet sales were originally waived to encourage ecommerce – is that true or did I make that up?

It’s been lovely not to pay taxes on things I buy on the ‘net, but if you’d asked me I suspect I would have said something like ‘this won’t last.’ Maybe we all thought the taxes into existence.

It’s a huge drama to change all the Amazon links to say, Barnes and Nobel who, at this point pays a commission if you buy through an affiliate. I have no clear how long that will last. I have taken down the rather nifty merry-go-round of books – I may put it back.

I really wish they had treated me and my fellow affiliates better or more politely than they did.

My true hope is that this won’t mean the end of affiliate programs.

What do you think?

[sig]

Yes, that’s part of the real letter they sent me.

{ 29 comments… add one }
  • Anne, I love that you mention in the first paragraph that you are a third or fourth generation Californian. My heritage also goes far back in California: 7th generation on the “European” side of my dad’s family, and WAY back on my dad’s Native American side.

    How utterly discouraging for Amazon to drop you as an affiliate. I suppose it will happen to all of us who are California affiliates.

    • Oooooo… so interesting to meet someone whose family has been here for so long… on both sides…

  • Damon Z.

    Mark has it right.

    It is noteworthy that proponents of the bill include Amazon’s competitors – Barnes and Noble, Target, Walmart, etc. Businesses have always used regulation and legislation to cut the legs from under their competition (not to mention erecting barriers to entry). The same is true in every industry. This is the reason lobbyists exist.

    As for the constitutionality or legality of Brown’s bill… well, that a whole ‘nuther ballgame. The Dormant Commerce Clause comes into play…

    http://en.wikipedia.org/wiki/Dormant_Commerce_Clause

    But that introduces whether you believe in the “rule of law” in the first place…

    http://faculty.msb.edu/hasnasj/GTWebSite/MythWeb.htm

    Me? Not so much. But don’t get me started. 😉

    • Damon! Wonderful resources… keep ’em coming… thanks

  • jorgekafkazar

    Jerry Brown wants to illegally tax Amazon’s sales. Amazon’s only defense is to sever relations with entities resident in Californica. Blaming Amazon is just silly. Brown is the culprit. Mark Coppock has it 100% correct.

    • Anne

      Jerry Brown like many governors is trying to figure out how to generate money in a state where the republicans won’t let any taxes be extended or raised… black and white positions are almost always a problem imo.

      • jorgekafkazar

        The reason Republicans oppose most of Brown’s tax rises is that higher taxes will drive still more businesses out of the state, reducing the tax base. Somehow, for Brown, reducing government is never an option.

        • Jorge, I know that’s what the GOP believes… but when I look back over the history of the state and watch the decline of our schools from k- graduate I wonder if we can blame that on taxes… and I suspect that may have more ultimately to do with businesses in the state than just taxes… but I can’t prove it one way or another either. I agree that something’s badly broken. I doubt taxing Amazon affiliates or not taxing them will make a whit of difference.

  • I got the same email from Amazon when it came out, but wasn’t really disturbed, since I hadn’t really gotten to the point of actually selling anything through my affiliates. Plus, I had heard they had already done it in 2 other states, though I can’t remember which two. I think this will be a trend that will roll through all the states, given the bankrupt coffers of my states.

    The bottom line is that our government – federal and state – is bankrupt and they are trying to grab money anyway they can. At the same time, the GOP wants to roll up the debt ceiling and keep a cap on taxes. Can’t have it both ways. Until we as a nation are willing to make tough choices, the little entrepreneurs such as us will continue to pay for it.

    That’s my soap box for today.

    • picturing you on the soap box… agree we need responsible government, responsible financially… suspect it can’t happen all at once.

  • South Carolina just went through a huge fight over this. Amazon was moving in, had the distribution center half built, our last governor and Dept of Commerce had promised not to require Amazon to tax South Carolinians on what they ordered in the state. Then in comes a new governor who says she didn’t agree on that. The legislature voted to enforce the taxation. Amazon packed up, stopped construction, left the building half built, and went home. Wal-Mart led the fight of brick and mortar stores in SC, and paid off the legislators with threats of no more financial support for their campaigns, etc. etc. Well, the citizens of the state, in dire need of the 3000 PT and FT jobs promised by Amazon, wrote their congressman, raising a fuss. I was one of them. Congress changed its mind, met again, and overwhelmingly passed a five-year moratorium on collecting the sales tax. Amazon is back in action, completing the center.

    We cannot use one broad brush to deal with companies in all states. Each state has individual laws on how to court enterprises, collect taxes, maintain jobs, etc. It’s up to the governors and congressman of each state to decide whether to collect sales tax and when to grant waivers for tax collection in the name of development for the state. I am all for granting the waiver, in this case. We are job poor in SC. One of the top ten in unemployment. What we gain in jobs, the taxes paid by those people with jobs, the commerce activity, the airport’s activity (located next door and hurting for business), keeping UPS (also located next door and considering leaving the state), and more, is well worth not collecting sales tax on sales made by Amazon to SC.

    Sorry, but this was a hot-ticket item in this state and for me. We need to be involved in politics, know our politicians, and remain aware of these things. While they seem far removed from our power, we still have the ability to make a difference in our votes and letters to our elected officials.

    • Anne

      Hope, glad to see you here. I agree we all need to be involved in politics. I did not know SC had gone through this and it seems to me it’s okay that the legislature there waive taxes for a warehouse… not sure it’s ok for a new gov. to change it, but that’s another issue.

      I need to read the California law re this. I’ll be back.

      Part of what I don’t understand when I read the reports is how Amazon is going to avoid collecting CA sales tax when I buy a book here in San Diego… the affiliate thing almost seems a smoke screen.

  • Mark Coppock

    The issue is that it’s not Constitutional for a state to collect sales taxes on a product sold by a company located in another state. Amazon has no physical presence in California and the other states in question, but those states are passing laws (to skirt the Constitution) to consider affiliates as equal to a physical presence. Therefore, if Amazon keeps us affiliates (I’ve been one for years as well, and live in SoCal), then they must start charging sales tax to all buyers in those states.

    The fact is, one of Amazon’s competitive advantages is that they don’t charge sales tax. And they shouldn’t–they’re not a California company. That makes Amazon smart for building their business model the way they did. Also, I’m sure the millions of people who buy from Amazon because there’s no sales tax will be happy that Amazon is making this decision. Who are we affiliates to demand that every other person in those states be willing to spend 5-10% more on their purchases when they otherwise wouldn’t have to do so?

    Rather than attacking Amazon for making what is a wise business decision, we should be going after our state politicians for years of reckless fiscal policies. This is a money grab, plain and simple, and I commend Amazon for fighting against it.

    • Anne

      Mark, is that in the 16th amendment?

      Has there been any ruling on if affiliates = a presence or is that just speculation?

      Again, I’m not sure what I think about this issue… but it isn’t clear in my mind yet.

      • Mark Coppock

        Anne – I believe it’s this:

        Article 1, Section 9, Clause 5 of the Constitution: “No tax or duty shall be laid on articles exported from any state.”

        The laws themselves specifically, I believe, say that affiliate programs like Amazon’s = a physical presence in the state. That’s how they’re trying to get around the above. Of course, it’s ridiculous: as a former Amazon affiliate, I was not in any way an employee or asset of the company. I was an independent businessperson with a contractual agreement with Amazon, nothing more.

        It simply cannot be stressed enough: this is a money grab by the legislature, nothing more.

        • Anne

          Yes, it’s a money grap from the state for sure… and thanks for the constitutional reference. Like you as an Amazon affiliate I certainly wan’t a ‘presence’ in the state for them – or not in any way that I understand.

  • I’m still sizzling at being dumped. I spenty upteen hours over 4 or5 years trying to go with the rocky flow at Amazon. Remember the reader “pay as you go” scheme when Amazon was trying to take on Pay Pal? I did that–then dumped it when they did. Then there was the page content. Did that too & it messed up my pages–and dumped it when Amazon did. Yes, I blame the State, but Amazon just sucks. However, I have calmed down enough to see it from their perspective. If they had caved in to add the sales tax, it would just open the door for every other State to want a piece of the action. My prediction is that no tax on affiliate sales will soon be a thing of the past nationwide anway. In the meantime, I plead that Cal affialites sever all referral links to Amazon–and I know what that means in terms of work. I have 3 i-stores & hundreds of scattered links. I also have all those nice little widgets that look so attractive. But if I don’t manually remove then I will be inadvertently sending customers to Amazon–and from all I’ve been reading about Amazon lately–that would be unfair & unkind.

    • Wonder if someone could write some code that would find and unlink or even change all amazon affiliate code… it’s a nighmare and bn has recently switched to linkshare and I fear another switch plus I can’t seem to link to a single product which is no good.

  • This whole situation is a real shenanigans. Quite the can of worms for all folk involved – at whatever level. I agree with you though Anne, I really feel that internet transactions will all be taxed ultimately.

  • Now, that’s punny. 🙂

  • I think I’m going to write about this for my Entrepreneur blog…I’ve been following the Internet sales-tax story for a long time.
    I think Amazon is nuts. Does it eventually want to have no affiliate sales? That can’t be good for business.
    The reality is, taxing the Internet is nearly here. There is streamlined sales-tax legislation pending in Congress that will tear away the final argument e-retailers have been using — that it’s too complicated and burdensome to ask them to collect tax all over the country, with every local jurisdiction having a different and constantly changing tax rate.
    States just need the money too bad now to let this revenue, which should be coming to them automatically, keep slipping away.

    On a personal note, since I live in Amazon’s home state, we’ve always paid tax on everything they sold. Hasn’t made me buy from them any less.

    Brick-and-mortar retailers have basically been getting screwed on this for over a decade, and in my opinion it’s time this playing field gets leveled again.

    Ugh, my turn for Commentluv to not like me…my recent post is 7 Ways Freelance Writers Can Find Better Pay — Right Now

    • My personal hunch is that eventually all internet transactions will be taxed – the software exists to handle that with some grace now. Amazon and the others are fending off the legal argument that my being an affiliate gives them a ‘presence’ in California subjecting them to charging CA tax. Once the taxes are universal Amazon will probably reinstate everyone…

      and comment luv seems not to be working for anyone… and it’s updated…

  • Same thing happened to me in Connecticut. I signed up as an affiliate for http://www.indiebound.org/ instead. They hook you up with local indie bookstores, and you can either buy online or search for a local store that has the book you’re looking for. Love the idea, and I’m kinda glad Amazon drove me to find them!

  • California is far from alone. This has happened to many affiliates, in many states. What is Amaz0n (and the multitude of other affiliate programs who are “firing” people) going to do when it’s in all states? Are they going to abolish affiliate programs? I doubt it.

    I think all the firing is temporary. Either the laws will get overturn, or the rest of the states will follow through.

    Marcia

  • I’m in North Carolina, so this happened to me many months ago. Amazon’s still not adding tax to stuff I buy, yet they won’t allow me to be an affiliate since I would have to pay sales tax on any of my affiliate sales. I don’t blame it on Amazon, though. I think the blame lies with our legislators that fail to realize that they’re only shooting their states in the foot by passing these ridiculous laws.

  • I got fired too Anne. I think there are merits to both sides of the argument about taxing Internet commerce. I know local owners of brick and mortar stores who are angry that they have to collect a tax that Amazon doesn’t.

    I wish Amazon had contacted us earlier about this. I only had a few hours notice.

    • So much of our world is changing and so much needs to change… I know I don’t go to bookstores as much as I once do because there are so few independent ones any more, and the chains just aren’t the same. Doubt it was the net that drove the indys out of business in most cases, but it contributed. I am under the impression that collecting tax for states is now possible for net stores to do easily… which also wasn’t true way back when.

      Like you I see too many sides of this issue.

  • Anne,
    It’s crazy how the states are playing the tax card all over the country. So far South Carolina hasn’t passed this type of law. I wish you all the best. May your vision continue to be write. 🙂

    • Thanks Jeff… do I remember correctly you too want to write? It’s been awhile… and love the pun. Cathy Miller puns her occasionally.

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