Today I received a notice from Amazon.com that they were terminating my affiliate agreement because of the new Minnesota Affiliate Marketing Law and Affiliate Nexus Tax. Here’s what I received.
We are writing from the Amazon Associates Program to notify you that your Associates account will be closed and your Amazon Services LLC Associates Program Operating Agreement will be terminated effective June 30, 2013. This is a direct result of the unconstitutional Minnesota state tax collection legislation passed by the state legislature and signed by Governor Dayton on May 23, 2013, with an effective date of July 1, 2013. As a result, we will no longer pay any advertising fees for customers referred to an Amazon Site after June 30 nor will we accept new applications for the Associates Program from Minnesota residents.
Please be assured that all qualifying advertising fees earned prior to July 1, 2013, will be processed and paid in full in accordance with your regular advertising fee schedule. Based on your account closure date of June 30, 2013, any final payments will be paid by August 30, 2013.
While we oppose this unconstitutional state legislation, we strongly support the federal Marketplace Fairness Act now pending before Congress. Congressional legislation is the only way to create a simplified, constitutional framework to resolve interstate sales tax issues and it would allow us to re-open our Associates program to Minnesota residents.
We thank you for being part of the Amazon Associates Program, and look forward to re-opening our program when Congress passes the Marketplace Fairness Act.
The Amazon Associates Team
This is tough news. I really prided myself for having an extensive resource of books and products available to folks in their study of Druidry, and 90% of the products were books with Amazon links.
Some folks would say, “Well what’s the problem? You could just list the books anyway.”
To me, what little kickback I might receive from Amazon provides money to keep the website going, pay my hosting fees, and have a little bit of play money. Everything in this world has a pricetag, and it was just nice to be able to offset even a portion of these things as I stepped forward to offer knowledge, ideas, etc. (Plus the investment of time I put into the website, taking photographs, recording and publishing podcasts – all of it adds up and none of it is paid work).
So for now, I’ve unpublished all of my resources. It’s kindof a sad day. I feel for some of the bloggers out there where this is their livelihood. Obviously, to me, the Minnesota legislature and governor did the wrong thing here.
The new law, effective June 30, 2013, requires businesses (like Amazon) to collect and pay sales tax on orders shipped to states where it has an established presence of affiliate marketers that exceeds $10,000 in gross referral-based purchases. The bill is based on the idea that affiliates act as extensions of a retailer’s sales force and are sufficient in themselves to establish a physical presence or nexus.
$10,000. That’s it. So even if the next greatest novel or course or product is a hit in the marketplace and everyone wants it and they rely on affiliates to spread the word, they must now keep track of sales in Minnesota, and if they reach just $10,000 or more, they MUST pay the State of Minnesota at the rate of 6.875%. I know well-respected authors who don’t see 6% of sales from their publishers for their books.
So in the State of Minnesota’s attempt at “leveling the playing field” between online and brick-and mortar retailers, they’ve given a huge blow to the bloggers out there who will now be forced to consider possibly moving their business out of state.
Moving can’t really happen for me, since I blog and podcast about the beauty of Minnesota and my experiences here. I have roots in Minnesota.
So, back to the drawing board. Time to re-think the income making paradigm. I’ll keep my resources handy for those who are looking for mentoring, and I may consider some subscription-based content in the future. We’ll see.
Hopefully the federal Marketplace Fairness Act can speed through congress (where that $10,000 limit becomes $1,000,000 – a more fair limit for us little-guy bloggers). But like most government processes – I’m not holding my breath just yet.
Blessings to you all!