Slashdot Mirror
Amazon Cuts Off North Carolina Affiliates
Amazon.com has reportedly cut off all affiliates in North Carolina as a preemptive response to the sales tax change being pushed through the state legislature. The Seattle-based online retailer warned affiliates last week that such a move might be necessary, but the early shutoff seems to be a move in hopes of swaying opinion on the proposed legislation. "Local affiliates say they were 'blind-sided' by the company's action. 'I got this e-mail at 4:30 this morning,' said James Barrett, a technology consultant from Winston-Salem. 'It wasn't saying your account will be shut down. It said it is shut down. That just blew me up right there.' Barrett said that he is frustrated at lawmakers for considering the tax, but equally aggravated with Amazon. 'They're trying to tick off all their associates and get them to call down to Raleigh,' Barrett said. 'I think that is pretty tacky. That's not the way to use people who are referring business to your business.'"
That's the real meaning of "voting with your feet". There is an unjust law, or even a just one that Amazon doesn't agree, and they don't want to be subjected to it, so they move out of the state.
... even if it is a bit assholeish. It sends a loud and clear message to the NC government that the legislation will hurt local businesses.
Disconnect your television. Do your own research. Draw your own conclusions. They're probably lying. Don't be a sheep.
Local affiliates say they were "blind-sided" by the company's action.
I'm sorry, sir, I normally restrict myself to civil language but you are so full of shit.
I don't even live in North Carolina and recalled reading about 'warning' letters sent to you. Maybe you should open up your e-mails from June 17-18:
We regret to inform you that the North Carolina state legislature (the General Assembly) appears ready to enact an unconstitutional tax collection scheme that would leave Amazon.com little choice but to end its relationships with North Carolina-based Associates. You are receiving this e-mail because our records indicate that you are an Amazon Associate and resident of North Carolina.
Please note that this is not an immediate termination notice and you are still a valued participant in the Associates Program. All referral fees earned on qualified traffic will continue to be paid as planned.
But because the new law is drafted to go into effect once enacted -- which could happen in the next two weeks -- we will have to terminate the participation of all North Carolina residents in the Amazon Associates program on or before that same day. After the termination day, we will no longer pay any referral fees for customers referred to Amazon.com or Endless.com nor will we accept new applications for the Associates program from North Carolina residents.
The unfortunate consequences of this legislation on North Carolina residents like you were explained in detail to key senators and representatives in Raleigh, including the leadership of the Senate, House, and both chambers' finance committees. Other states, including Maryland, Minnesota, and Tennessee, considered nearly identical schemes, but rejected these proposals largely because of the adverse impact on their states' residents.
The North Carolina General Assembly's website is www.ncleg.net and additional information may be obtained from the Performance Marketing Alliance at www.performancemarketingalliance.com. We thank you for being part of the Amazon Associates program, and we will apprise you of the General Assembly's action on this matter.
Sincerely,
Amazon.com
You were warned! Tell us, James Barrett, how many letters did you sent to your representatives demanding they strike down this unconstitutional tax?
Yes, it came early. But you were warned. Unwittingly operating for one day could set Amazon back thousands if not tens of thousands of dollars. They tried blocking it with litigation in New York and they lost. Don't get made at them for playing it safe, you have no one to blame but your elected officials.
My work here is dung.
1. If any of these affiliates were blindsided, it is because they didn't read the notice they were given last week. Of course, a single week's notice is too short anyway...
2. Time for the referral businesses in NC to relocate. Or close up shop. We'd be happy to have them (and their income & property tax revenues) here in NJ.
Of course, now it's only a matter of time before most states have similar laws. Then it'll be time for these businesses to relocate to the Cayman Islands.
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
is by biting them where it hurts: their pockets. You can add all the sales tax on out-of-state purchases you want (whether that is federally allowed -- I'm not sure), if you don't sell anything, you don't have anything to tax so revenue will remain 0.
They probably saw what happened in NY and they don't want it to happen everywhere. Amazon decided to add tax to NY purchases and me and a lot of other people stopped purchasing from them because other stores (like NewEgg, TigerDirect and Geeks) were undercutting them by about 8%. Even though my organization is tax exempt I don't purchase at Amazon simply because they don't have the provision for me to state that I am tax exempt.
Custom electronics and digital signage for your business: www.evcircuits.com
That's exactly the way to use people who are referring business to your business. The only thing that motivates a business "relationship" is the exchange of value. If the proposed law was going to cause this change anyway, making it early as an example is the way to get people to "call down to Raleigh."
When the axe came to the forest, the trees said, "Look out - the handle was once one of us."
They're trying to tick off all their associates and get them to call down to Raleigh,' Barrett said. 'I think that is pretty tacky.
Sounds like an excellent way to motivate your local associates to get their arses over to the capital and ride their representatives. There's not a great deal Amazon can do directly to fix this, they have to rely on their local affiliates to keep the local conditions amicable to their business. If the locals aren't moving, then it's time to light a fire under them.
Got their attention too didn't it? Sounds like it's working as intended to me...
I work for the Department of Redundancy Department.
OK then, riddle me this: what is the sales tax rate for any address in the US? Note that you can't stop at the city plus ZIP code level, in San Diego County there are ZIP codes that're partly in a city (where city sales tax applies) and partly outside the city (where city sales tax does not apply). Where can a company go to find out authoritatively what the sales tax rate is for a customer address? I don't know of any, and it's just not reasonable to require a company to pay sales tax without giving them a way to find out how much sales tax they're supposed to collect.
Finally some business demonstrating some balls. If the tax is being considered, then the locality has an environment hostile to Amazon's business. It doesn't matter if it goes through. The fact that they see nothing wrong with their hostile attitude is enough of a reason for Amazon to declare that they will have nothing to do without them. No business with bullies -- not even with those who associate with bullies by living in their tax base. Good for them!
Any guest worker system is indistinguishable from indentured servitude.
Well, of course. They sell everything.
The legislator claims it's not fair that brick and mortar stores collect sales tax and Amazon doesn't. I say the brick and mortar collects taxes according to ONE tax structure in ONE place. What's fair about an out of state retailer having to understand potentially thousands of sales tax structures in many different combinations? Not to mention then needing to keep books on thousands of accounts to make sure the various state and local tax collectors get said taxes.
Unless and until the various legislatures are willing to get together on a simple clearing house to make it easy for retailers to figure out how much to collect and where to send it, they have little choice but to not do business in places that insist on it.
NC is already proving that such questions could be hard to answer. Whose taxes do we collect, the billing address? the ship to address? The address where the affiliate's server is located? NO! We must collect for the physical address of the person who owns the affiliate site. At least this week. No doubt the eventual answer (at least the one legislators will want) is ALL OF THE ABOVE AND MORE! In all different amounts with a whole table full of thresholds, percentages, and exceptions. OH, and different addresses to send the checks to with different required documentation and forms to fill out. Each and every one of them will claim that their tax is very simple and effortless to collect. None will recognize that the sheer volume and lack of standardization makes the matter impossible.
I'm sure people in NC would agree to pay rather than stop doing business. There is something fishy in this case.
The "something fishy" is that NC wants to tax Amazon--not the local associates--as if they had a presence in the state, based on their relationships with local associates (who are undoubtedly already paying NC taxes). Ergo, Amazon is severing its NC-based associate relationships to avoid any appearance of a taxable in-state presence.
I doubt that these taxes on out-of-state businesses are even remotely Constitutional, but I don't blame Amazon for playing it safe.
"The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat
OK then, riddle me this: what is the sales tax rate for any address in the US?
I've had to deal with sales tax in both Virginia and North Carolina. The truth of the mater is they don't want you to know what the current tax rate is because they make more money when they audit your small business and apply fines a couple years later.
In Virginia my business was fined for not anticipating our GROSS income correctly. We GROSSED more money one year and because of that we had to pay the tax difference plus a couple thousand in fines. I'm just happy we had a CPA because the tax people where screaming murder until I said they would need to talk with our CPA then they where much nicer...
Small business owner's really can't win by playing by the rules...
Yes, it is unfortunate that N.C. sellers had to suffer for it, but I have to agree with Amazon's action on this. At every turn, government at all levels seek more and more money rather than taking a hard look at where they are spending it. Ultimately, I believe, they simply want more money to vote themselves higher pay and to return favors of their campaign donors. I wish there were a better way to run government. I vaguely recall one or more SciFi movies in the past where a city became a business or something to that end... the prospect was frightening, but I have to wonder if such a project were applied properly, if it wouldn't be run more efficiently. One problem with current styles of government is that there is little to no incentive to save money or to use it wisely. They have no profit motive and clearly no personal integrity or desire to serve motives. So I have to wonder, what motives would cause governments at local, state and even federal levels to deliver "good service" to the people at the lowest cost possible?
A better example than a patron would be an employee - the vast majority of bars i've frequented left their employees in situations where the had no choice but to breathe in second hand smoke. I know the free-market extremists will disagree, but i think your employer should be responsible for a safe working environment.
I certainly know of someone who got a nasty laceration in his foot from broken glass from a customer spill. The bar settled and covered his medical costs.
That's certainly a different situation than being exposed to second hand smoke, though. If you apply to work at a bar/restaurant where smoking is allowed (which you could easily tell when you were picking up your application), I think you should expect that you'll be around second hand smoke and if that is objectionable - choose not to work there! If you object to working outside in the heat, perhaps you shouldn't apply for a construction job in California - it's not the hiring construction companies job to provide a portable air conditioning unit for you. If you object to working with children - you should probably not try to become a second grade teacher. If you object to working around alcohol - you should not apply to a liquor store. If you object to working around smoke, you should choose not to work at a place WHERE PEOPLE FREQUENTLY SMOKE. You are not entitled to work at whatever job you want with whatever conditions you want, no one owes you the type of job you dream of.
Track your TV Shows with your iPhone - FREE
The article indicates that they sued in NY for a similar law and lost, but are continuing legal challenges there. It doesn't sound like they cut off referrals though.
What's ridiculous is that this law doesn't seem to tax based on the location of the seller or the buyer, but instead on the location of the referrer. Sales tax is supposed to be a tax on the buyer, and it just happens to be the responsibility of the seller to collect it. So NC is trying to charge a sales tax of a buyer that isn't a resident.
It might sound sensible to take a cut of that referral money (since that's the party that's in state), but they're already taxing that by charging income tax to the referrer.
"Threatening" government with pulling out is often weak and empty and used far too often. Eventually, with all the posturing that goes on, someone has to make a move that is exact and meaningful. Amazon made a move rather than attempt to actually "play" politics through threats and posturing. So I have to disagree. Amazon is not playing politics. Surely they have taken into account that they would alienate some people in N.C. but they have to prove they are serious.
Amazon isn't sending lobbyists with bags of cash. Amazon isn't asking sellers to plea to the government. Doing so would, in fact, be playing politics. By making a decisive and definitive action, they are make their statement in the only clean and honest way possible. Begging and threatening politicians is only playing their game. To withdraw is the only way... unless you can think of another?
Undoing a law after it has passed is a good deal harder than preventing it from passing. The DMCA seems to be sticking around regardless of how frequently it is abused and how much it harms the people. It's a bad and unpopular law that could only have been passed in the way it was (subversively) and it's not going away. Amazon is speaking not only to N.C., but to every state of the union. Taxing the internet is a very bad idea just as a state seizing a domain name because the operators who do not operate in the same state is violating that state's law is a bad idea. States should never exceed their borders and yet attempt to do so at every opportunity.
Unfortunately, Amazon probably needed to demonstrate how serious they were, or NC might well have called their "bluff," leaving the affiliates out in the cold for much longer, if not permanently. Once some government erects a new law / regulation / tax / bureaucracy / program, it's harder to get rid of than mildew.
In fact, these things really are quite like an aggressive mildew. Do nothing, and they grow, advance, and encroach on your clean space. Work really really diligently and consistently, and you can sometimes beat them back to manageable levels. But get a little lazy once or twice, and boom... they're ba-ack, worse than ever.
If Amazon had merely warned their affiliates, there would be a big "yeah, right" factor on the affiliates' parts, and a big "yeah, right" factor on the legislators' parts. The tax might well pass, and Amazon's negotiating position would become that much weaker. Amazon *needs* big numbers of pissed off people -- really pissed off right this minute people -- to beat this thing. People who are merely imagining being pissed off in some potential future just don't act. Legislators need to see a thunderstorm, not a possible drizzle advisory; a storm of phone calls, not a flurry of tweets and a new Facebook group called "stop the tax."
With private economies shrinking but public spending expanding most everywhere, we are going to see more egregious tax grab strategies popping up more and more often over the coming months and years. The ones who don't get their pockets picked clean will be the ones who get brutal, or have someone get brutal on their behalf as Amazon did in this case.
Pi Ran Out
There would be no point to not selling to NC residents. North Carolina is claiming that the independent affiliates count as a 'physical presence' for Amazon, meaning Amazon has to pay sales tax on anything sold in the state. Amazon can eliminate that qualifier by eliminating its contracts with North Carolina businesses, freeing Amazon to continue to do business tax-free in the state. Refusing to do business entirely would only hurt Amazon more without particularly adding much more pressure.
Long? What do you mean the signature at the bottom of every comment I post on Slashdot is too lo
Comment removed based on user account deletion
"It's true, I have often found it takes a lot more Lysol to kill a legislator than it does to kill mildew."
I think this warrants extensive testing just to be sure.