The Performance Marketing Alliance is reporting that an advertising tax will be proposed in Virginia. (I'm sorry I used the wrong tense in the topic title.) If this tax is adopted, PMA estimates over 100 advertisers (inlcuding Amazon) will terminate their affiliate programs with Virginia publishers.
This is the same type of tax that was adopted in North Carolina and Rhode Island and affiliates of both states were booted from Amazon.
If you want to stay up to day or help organize to fight this here's the link http://www.performancemarketingassociat … -virginia/
Nelle, thanks for the heads up. I was thinking about moving there next year. I hope this doesn't catch on.
Not all merchants boot affiliates. They just make you agree that you won't use PPC and email campaigns. That is what many merchants do in states such as RI and NC. But Amazon has taken a hard line and won't do that.
The way the laws are usually written. If you just put products and banners on your site then that's okay - similar to newspaper advertising. But if you use PPC or email campaigns you become an active agent that gives the company a presence in the state and then they have to collect a state sales tax.
I am working on sites that only have merchants who have continued to work with affiliates after such a tax was paid. That way if Massachusetts passes such a tax, I still have something going for me.
I find it hard to understand why Amazon would take this approach.
I think its happened twice before. Amazon just don't want the extra hassle of trying to factor in all the new regulations and requirements.
Affiliate sales are a very, very small amount of Amazon's revenue stream.
They have a massive affiliate program and let just about anyone in. It would be a nightmare to police it. And if just one affiliate refuses to follow the rules, Amazon could be screwed and have to collect the sales tax.
Collecting the sales tax is no big deal. They certainly have the technical savvy to do that and many companies such as BarnesandNoble.com already do, because they already have a physical presence in every state.
Most of the companies that work with affliates in NC, NY, and RI are smaller and much pickier about who they let into their affiliate program. Or they have bricks and mortar stores everywhere like Wal-Mart.
The reason I'm only adding ebay hubs right now is that ebay is affiliate friendly in this matter. I think because it is the ebay seller who is the merchant and not ebay. And they are also paying by click now.
Damn I'm a Virginia affiliate marketer. Guess I got to organize a strong foundation to fight against this law.
mr. williams use the link to PMA, they are already organizing and have some heavy hitters on board. Then start to prepare by finding companies that won't toss you out, just in case.
I know affiliates in NY and RI that lost 90 percent of very large incomes because they didn't prepare and just hoped for the best.
Or write to your political representative and tell him you'll move and pay your taxes elsewhere if this law is passed.
Most state reps don't even know what affiliate marketing is. So you have to educate them and then be able to tell them how to write the law to exclude affiliates - and why they should.
In some ways I'm glad that Brown won in Massachusetts, I think the Democrats are so scared, I doubt they would attempt a new tax this year - but you never know.
Yep, the same thing happened here in NC.
I didn't know about it till after it was over, but Virginia has some advance warning.
If the law passes...Amazon sends you an e-mail, tells you that your account is deactivated because of your state's laws, and gives you your earnings on an Amazon gift card. Really nice of them actually.
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