Tarheels vs. the Internet

Here’s one paragraph from that article…

The U.S Supreme Court’s 1992 Quill decision forbids states from forcing tax-collection obligations on out-of-state merchants, but Tarheel legislators still want Amazon and other online retailers to start taxing their constituents. The Seattle-based retailer has no physical presence in the state, but a pending North Carolina bill holds that since affiliate Web sites in the state link customers to Amazon, the company is now responsible for extracting cash from Carolina shoppers. Other proposed North Carolina legislation would apply a new tax only to Internet ticket resales, in direct defiance of the federal Internet Tax Freedom Act, which prohibits taxes that target the Internet with burdens not applied offline.

This brings up a new, and interesting, question.

Just because I live in North Carolina, can the legislature or Amazon.com assume that my websites are located in North Carolina.

They aren’t.

As far as I know, I have no websites that are located on a server that is physically present in North Carolina.

Most of my blogs and several static websites are hosted on a server in Texas.

I think my Squidoo lenses are hosted on servers located in New York, but don’t know for sure. That’s where Squidoo’s offices are located.

My Act On Your Dream! site is hosted on servers in Quebec, Canada, as will be my new site powered by Site Build It! that goes live this week.

After looking through a list of all my domains, I don’t see one that I know positively is located in North Carolina.

It doesn’t change anything, but it does bring an interesting thought about the hypocrisy of the NC legislature’s attempt to grab sales taxes wherever they can.

In my opinion, for whatever it’s worth, the NC legislature is attempting to do something that was already declared unconstitutional by the US Supreme Court.

Desperation helps people do things that are very wrong. The NC General Assembly needs to find other ways to balance their budget.

Still, no matter what is decided by the legislature or the courts, I’m done with Amazon.com.

Sigh.

Act on your dream!

JD

I feel your pain, too, Brian. It’s hard to imagine that they’d cancel your affiliate account because of something like you describe.

You know, I never used to consider Amazon to be arrogant, but I may be changing my mind.

This is not the first time that Amazon had canceled an entire state’s worth of affiliates. This happened several months ago for all affiliates living in New York state, when their legislature passed a similar law.

I’m under the impression that more states are considering this new tax law model, so affiliates living in other states may be facing this issue in the coming months.

At least, that’s the way I understand it, now. As I’ve said, I’m no expert on this matter.

Thanks for your comments, Brian.

Act on your dream!

JD

Yes. I agree with what you said.

No, it’s not a big part of my income, although it used to be, and I had hopes that it would grow, again. Now, I don’t have to worry about it.

Act on your dream!

JD

It’s always good to hear from you.

Regarding Squidoo and Amazon.com affiliate links…

This is not a simple question.

If I have Squidoo lenses with my own affiliate links to Amazon products, then I am affected by this change. Those links will no longer produce any income and I’ll be removing them as soon as I can.

However, if we’re using the Amazon modules on a Squidoo lens, then it may not affect my income.

In that case, Squidoo is the affiliate and they aren’t located in North Carolina. So, in effect, the money earned from those modules is paid to Squidoo and they share a part of that income through their monthly payment to us.

This is lumped in with other income we may receive from Squidoo, such as a share in Adsense earnings or sales via other affiliate programs that are paid to Squidoo and then shared with us.

So, I shouldn’t see much difference in what I earn from Squidoo – which has never been all that much, anyway.

Yes, it’s a scary thing.

Those of us who are serious about affiliate marketing spend a lot of time and money building our sites and marketing those merchants’ products, with only the hope that we’ll make enough sales to earn a profit from it.

Affiliate marketing is an easy business to get into, but requires – as you said – a lot of time learning and practicing online marketing to earn a consistent income. It’s not nearly as easy as some people make it out to be.

I’m not sure there is a solution, at least in so far as I understand your statement.

I earn far more from other affiliate programs than I ever have from Amazon.com. Losing my account with Amazon will not take food off the table.

However, if I lose my affiliate account with several other companies, then it will become a very serious situation for me and people like me who live in NC – and in other states where their legislature is considering similar legislation.

Fortunately, I’ve spent the last six months, or so, putting together a new marketing system to help me promote local brick-and-mortar businesses in Murphy, NC and the main new site should go live this week.

That system will also make use of several of my blogs, a couple of static websites, and new Squidoo lenses I’ll be creating.

It’s a completely different business model. Even though it’s still based on marketing and advertising, in this new situation I get paid up-front and do the work over an entire calendar year.

In the affiliate marketing business model, we have to do the work and then hope that it will pay off for us, in the long run.

In some ways, I’m now going to be monetizing what I’ve been doing for free for local businesses in Murphy, NC for the last several years. I won’t be charging any of them a lot of money, but, collectively, it adds up.

So, what you’re doing for businesses in Pendleton, SC has a monetization potential that you may want to consider, too.

If it turns out that affiliate marketing is no longer a viable business model for me, either because of the evolving business market or because of changes in NC laws, then I’ll turn more of my attention to local business promotion.

If that doesn’t work, then I’ll try something else.

Small business owners and entrepreneurs are always having to refine their business model and make changes related to customer interests, changing business climate, new laws, and our own interests. It never stops.

On the other hand, that’s one of the things I like about being my own boss.

Act on your dream!

JD

I’m with you. I couldn’t believe it as I read their letter.

I don’t want my account back, now. I’m done with Amazon.com.

Thanks for your comments.

Act on your dream!

JD

Welcome to our discussions. I appreciate your comments.

Truthfully, I don’t know all the details of the proposed tax law, but I think the main issue with regards to Amazon.com is that they’ll have to collect NC state sales tax for all sales to residents of NC, if they have a nexus in the state.

In the past, I think, a nexus was defined as a physical presence in the state, but, from what I understand at this point, the new law – if it is passed – will require Amazon.com to collect sales tax in NC if they have any affiliates in the state.

As far as I know, this applies also to other companies with NC affiliates.

What makes me so mad at Amazon.com is that they “jumped the gun” and canceled our accounts even though the law has not been adopted. From my point of view, that’s just wrong.

No, I don’t think this is going to hurt Amazon.com at all. I used to earn more as an associate than I’ve been earning from them over the last couple of years. In the past, links to Amazon were more effective than they are now. These days, everyone knows to go directly to Amazon.com and they really don’t need their affiliates like they did when nobody knew who they were.

We helped them build their brand and now they don’t need us, so it’s easy to cast us aside.

Act on your dream!

JD

Welcome to our discussions.

Yes, removing all those links will take a long time, but I’m going to do the best I can to get rid of all of them.

I always try to stay optimistic. Sometimes it’s harder than other times.

No, I’ve had it with Amazon.com. I don’t care what they offer me in the future. I will never again recommend their associates program or sign up for it again.

I still haven’t decided if I’ll never buy from them, again, or not. At this moment, I’m leaning in the direction of never again having anything to do with them.

I appreciate your comments, Bill.

Act on your dream!

JD

It’s a really scary thing. I have spent the last 3 years seriously studying and learning and practicing internet marketing. Makes me tired to think of all the hours I have spent and you, too, I am sure. I am also sure there is a solution. So that’s the next step. What now?
Joan Adams´s last blog ..Golf in Scotland updated Sun May 31 2009 2:13 pm CDT

-Randy

So far, it’s just one company that has canceled my affiliation, but I have no idea how many others may follow their lead.

Sometimes it feels like it’s “me against the world,” but then I get nice messages from people like you. We’re not alone in doing our best to get by and prosper.

Act on your dream!

JD