It's All About Nutrition!

New Amazon Sales Tax Law Threat

As Internet marketers we are compelled to deviate from the theme of this blog to bring you breaking news regarding a major threat to affiliate marketers. This may not be affecting you at the moment but this type legislation is sweeping across the country.

Rhode Island has now joined New York and North Carolina in enacting this type tax.

This is a copy of an email sent to me this morning from Amazon… speaks for itself I think. Below that is a copy of an email I sent to the Governor of Rhode Island, State Reps and Senators this morning regarding the same.

**************
Amazon email…

We are writing from the Amazon Associates Program to notify you that your Associates account has been closed as of June 29, 2009. This is a direct result of the unconstitutional tax collection scheme passed by the Rhode Island General Assembly with a veto-proof majority. As a result, we will no longer pay any referral fees for customers referred to Amazon.com or Endless.com after June 29. We were forced to take this unfortunate action in anticipation of actual enactment because of uncertainties surrounding the legislation’s effective date. The governor could sign the bill — or have his veto overridden — any day now.

Please be assured that all qualifying referral fees earned prior to June 29, 2009 will be processed and paid in full in accordance with our regular referral fee schedule. Based on your account closure date of June 29, 2009, any final payments will be paid by September 1, 2009.

In the event that Rhode Island repeals this tax collection scheme, we would certainly be happy to re-open our Associates program to Rhode Island residents.

The Rhode Island General Assembly’s website is http://www.rilin.state.ri.us/, the governor’s website is http://www.governor.ri.gov/, and additional information may be obtained from the Performance Marketing Alliance at http://www.performancemarketingalliance.com/.

We have enjoyed working with you and other Rhode Island-based participants in the Amazon Associates Program, and wish you all the best in your future.

Best Regards,

The Amazon Associates Team

***************************************
My letter to the Rhode Island officials…

Hello Governor Carcieri,
I am writing to you today because of a sense of overwhelming frustration.

I am a work at home Internet entrepreneur that derives a portion of my income from affiliate programs such as Amazon.com. Just in case you are not aware… Amazon is the worlds largest online retailer.

Seems that in an attempt to find new and creative ways to tax small business in Rhode Island the Legislature has passed an Internet sales tax. I have often thought that the Rhode Island state government is completely out of touch with reality and this just proves it.

Here is an excerpt from an email I received from Amazon this morning.

***
We are writing from the Amazon Associates Program to notify you that your Associates account has been closed as of June 29, 2009. This is a direct result of the unconstitutional tax collection scheme passed by the Rhode Island General Assembly with a veto-proof majority. As a result, we will no longer pay any referral fees for customers referred to Amazon.com or Endless.com after June 29. We were forced to take this unfortunate action in anticipation of actual enactment because of uncertainties surrounding the legislation’s effective date.

***

With Amazon leading the way there is no doubt that many other companies conducting business online using affiliate type programs (which there are at minimum 1000′s) will have no choice but to follow suit.

Interesting that in an effort to increase revenues off the back of small business, Rhode Island could very well see a decrease in revenues. Not only will people like me not be making Internet sales that can be taxed but because of the loss in sales we will not be paying income tax on the money we would have earned from those sales.

The state of Rhode Island has given the majority of Internet entrepreneurs 3 choices as I see it. Shut down operations, create an out of state corp. and run their Internet business from there or simply do what many others have either already done or are considering doing and move out of the state.

Now that I have that off my chest I am off to remove all of the income generating affiliate program links from my websites and blogs.

Regards,
Michael Silva

Being a return visitor it would be helpful if you would leave a thoughtful comment below...Thanks, Jeanne