I woke up this morning to find a few emails and a couple tweets stating that Amazon had gone ahead and terminated relationships with all Colorado Affiliates. i didn't believe it. I didn't see any emails or notices in my inbox from Amazon, so of course I figured it wasn't EVERYONE. I logged into my Amazon account and this is what I found:
That's not pretty!
My knee-jerk reaction was to be REALLY MAD at the ridiculous action on Amazon's part. Seriously, their action isn't doing anything except severing ties with their advertisers. The bill will continue to stand. Amazon will still be responsible for their part in whatever the bill states they should do based on sales to Colorado residents.
Then I read a post at Affiliate Advocacy about Amazon Removes Colorado Affiliates and Why and I started to see the big picture a little more clearly.
Amazon isn't trying to punish affiliates to prove a point. They are sticking to their guns. They made a stand and they are sticking by it. Amazon has clearly stated their stand on any bills regarding internet tax of nexus. If they make an exceptions for Colorado because affiliates are not longer involved directly, where is the line draw for further exceptions?
It's business.
That is one of the most frustrating statements to hear when there are emotions involved. Yet the fact of the matter is.. it's business. And in my mind, although the legislation and the resulting actions infuriate me, I respect the integrity being displayed – when you say you're going to do something, do it. Let's just hope the something to do is a good thing that doesn't hurt other people unnecessarily.
This action by Amazon is irritating and at first glance seemingly pointless. Colorado residents are still going to have to pay a Use tax OR Amazon is still going to have to voluntarily pay sales tax. But this battle now seems to be able principles… Amazon is standing by theirs and affiliates are stuck in the cross fire.
I fear more merchants will follow Amazon's lead and many will do so ignorantly. This isn't a game between legislators and performance marketing merchants. This is about businesses and real families being affected by decision makers battling out how to or not to make more money instead of cutting costs. I won't continue does my political train of thought. However, there is still room for proactive involvement.
What can you do to help?
- Educate yourself and then educate others – if you understand the legislation and how it impacts you, make sure to help spread that knowledge to others.
- Write your merchants and let them know that this bill does not determine nexus and affiliates are not involved.
- Keep in contact with your state legislators to help keep them informed about the impact their legislation has
More information and resources are available at the Colorado Online Marketing Association website
I understand the idea of having principles, but do those principles have to include the description of how Amazon intends to continue selling in Colorado through other affiliate websites from other states? What principle is that? When you are hacking off a guy’s arm, you tell him you still have a guy over there who still has his arms intact. Is that a good principle? Not in my opinion, but I realize I am only one small voice.
This bill is different than any of the other bills passed in other states, and the pure fact is that Amazon did not have to do this. By doing this, what did they gain? Was it just to hurt Colorado by reducing the income taxes paid by affiliates to the state? Did they do it just to irritate lawmakers in some way? It could have been avoided and Amazon’s integrity and reputation would not have suffered.
Many people in Colorado will now have to decide if they can survive without Amazon, or move to Utah. Anyway, I am not affected much, but I sure am worried about the other companies who will play follow the leader with this. I hope not many.
I agree – it’s not a principle I agree with myself. What I agree with is standing by one’s principles. I don’t like the reaction they’ve taken or the legislation that is causing the action. Yet, I do respect when someone says the believe a certain way, they don’t waiver because other’s don’t agree. I definitely don’t know all the legalities nor business contracts nor ideals behing anyone else’s actions, especially Amazon’s.
I’m also really worried about what other merchants will do. I’m hoping they will make their own judgement for their own reasons.. not just play blind follow-the-leader. I think Amazon’s decisions in this are completely different from any other companies.. for a lot of reason.
Let’s hope other’s educate themselves!
I can’t really know Amazon’s mind, but I suspect their thinking is that if there is nothing at all that seems like a “nexus” for them here, the CO legislature will have a very hard time enforcing this law. I can’t even imagine what legal basis they think they have for making any out-of-state entity collect taxes for them. And without even affiliates here, Amazon becomes out of state.
I’ve had an associates account with Amazon for years, though I didn’t do too much with it. But this makes me sad.
I blame the rotten state of CO. This really pissed me off. Now I’m looking into finding another option since I’ve been using Amazon but now everything is just down the toilet. At least they’re going to pay those of us stuck in this rotten state.
Don’t blame it on the state – Colorado is fabulous! It’s the bad legislation that is a problem
Thanks for pointing me here Jen.. The explanations you outline here makes sense of the why now. I couldn’t understand why Amazon would drop affiliates but then still do sales to the state which from my understanding still required the same reporting that sales by associates within the state would require. I guess in sticking to their guns, they at least deny CO income tax that would have been generated via their CO associates. Leave it to politicians to destroy an entire industry. If all the states follow suit after seeing others pass such ridiculous legislation, and then in turn other merchants follow suit with merchants such as Amazon, will the affiliate industry survive?
I really enjoyed Dave Taylor’s letter to Governor Ritter as quoted in the comments to his blog post (http://tinyurl.com/yaf44cl) where he explains that instead of bringing in sales tax revenue to the state it is taking an income source away from him in an already bad economy.
I also agree that the only truly feasible way to tax online sales would be on a federal level, although I’m not sure I actually trust the fed in their handling of any additional money either but it would definitely be better than having to deal with literally thousands of tax zones on a per state basis. Some states are literally nightmares when it comes to sales tax. Ohio’s sales tax tables are broken down by zip+4 because every single municipality even within a county can have different sales tax rates..
Keeping you guys in CO in my thoughts. Here’s wishing you guys luck with combating this issue and hoping that Senator Brophy is able to get some of your other politicians on board and educated.
Thank you!