Connecticut Killed Affiliate Marketing with Amazon.com

Re:Connecticut Killed Affiliate Marketing with Amazon.com by danking00 on Saturday June 11, 2011 @07:47PM (#2645189)

If I understand his metaphor and current law correctly: this law changes nothing about income tax. Regardless of this law, Mr. Amazon-Affiliate pays income tax to the State of Illinois on his Amazon affiliate income. I believe the poignant line from the blog post is:

  ... imposes the collection of taxes from consumers on sales
  by online retailers – including but not limited to those
  referred by Connecticut-based affiliates like you – even if
  those retailers have no physical presence in the state.

I interpret this as saying "if a Connecticut resident refers customer X to company Y, and X buys a product from Y, then company Y must pay tax on that sale." The only necessary tie to Connecticut is the referrer.

Of course, they'd also tax Mr. Amazon-Affiliate's affiliate income as well. That smells like double taxation.

Also, I think your comment suggesting that "If you don't like it, vote in different representatives," is rude. Obviously, Mr. Markham is aware of his Democratic rights and duties. He very well might vote against this sort of legislation, and he doesn't deserve to hear derisive comments when voicing his disapproval.

edit: formatted the quote for easier reading

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Re:Connecticut Killed Affiliate Marketing with Amazon.com by crasshopper on Saturday June 11, 2011 @08:07PM (#2645232)

I actually don't understand that part of it. How do sales tax on CT consumers -- who may or may not be driven to Amazon by a CT affiliate -- compel Amazon to terminate the affiliate programme?

CT-based affiliates may be driving traffic from outside CT, and CT-based purchases -- the thing being taxed -- might have been driven by an affiliate in Iceland.

Terminating _sales_ to Connecticut would amount to a refusal to pay the tax. Instead Amazon has chosen to raze the profits of a minority of CT constituents. They must be hoping that the ousted affiliates will march on New Haven.

(If I were a successful affiliate, though, I'd just make an out-of-state LLC and pass income through.)

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Re:Connecticut Killed Affiliate Marketing with Amazon.com by SoftwareMaven on Saturday June 11, 2011 @09:05PM (#2645335)

I believe the problem comes from having a physical presence in the state. Most states have sales tax rules that say if you have a physical presence, you must charge sales tax. The rules were changed such that Connecticut is treating affiliates as a physical presence. If Amazon keeps the affiliates, they have to charge sales tax on everybody who purchases in Connecticut, which they really don't want to do.

While I'm sure part of the reason they don't want to charge tax is that no tax makes Amazon cheaper, I bet a bigger portion is the headache of trying to manage every single municipalities convoluted sales tax rules. I know in my city (in Utah), there are dozens of rules for types of goods that determine different rates. Imagine doing that on a nationwide scale.

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Re:Connecticut Killed Affiliate Marketing with Amazon.com by machinedog on Sunday June 12, 2011 @10:23PM (#2647902)

I think the problem is that they want to apply a sales tax to anyone that is referred to Amazon /worldwide/ by a Connecticut referrer. That is why Amazon argues that it is unconstitutional. If it were simply taxing Connecticut consumers it would be similarly complicated, but I think there is more constitutional grounds for this. I'd have to check.

It's not like Amazon is going to pull out of the state.

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