Amazon Decides to Terminate North Carolina Affiliates « Affiliate Marketing Blog by Geno Prussakov

Raven

This morning the following e-mail has landed in mailboxes of all North Carolina affiliates of Amazon:

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 http://www.ncleg.net/, and additional information may be obtained from the Performance Marketing Alliance at http://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

It seems that North Carolina is about to enact the “unconstitutional tax collection scheme” similar to the one that became a law in state of New York last year.

A Greensboro, NC based news website writes that this “tax change is part of a package passed by the House last week in its attempt to rewrite the budget” by lawmakers who are “struggling to fill what they say is a $4.5 billion gap between the money needed to keep government operating as it is and the revenue the state is due to take in next year.” The General Assembly’s estimate is that this will help the sate raise $13.2 million next year. I wonder if they expected major players to start pulling out of the game. They should have if they have followed the Amazon’s reaction to this in other states.

If you are reading this, and you are a North Carolina based affiliate, it is not too late to contact your state representative to fight this bill! Chances are the lawmakers have no clue that what they are doing is actually going to put great numbers of NC residents out of business, the affiliate marketing business.

About Geno Prussakov

CEO & Founder of AM Navigator – an award-winning OPM agency. Founder & Chair of Affiliate Management Days conference. Author of bestselling "A Practical Guide to Affiliate Marketing" (2007) and "Affiliate Program Management: An Hour a Day" (2011), speaker, consultant, and affiliate marketing evangelist.

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9 Responses to “Amazon Decides to Terminate North Carolina Affiliates”

  1. It is really a shame. Some of these politicians have no clue. Instead of taming the spending (which is beyond control in many states) lets tax people out of our states.

  2. Ely says:

    Yes, politicians is a terrible destructive force. Never underestimate the power of stupid people in large groups, especially, if they are called State Senate… Luckily, I don’t live in NC, but a few of my friends are.

    I wonder, how much will NC lose in taxes because of it? If it was noticeable to introduce a tax, the losses in income taxes and generally spending should be also quite noticeable.

    And Amazon… well, I guess they are doing the right thing.

  3. John says:

    Yes it’s time to move the hell out of North Carolina. It’s a police state anyways.

  4. Geno says:

    Vlad, Ely, thank you for your comments.

    John, moving out of the state is not going to resolve the larger problem (more and more states start looking into introducing similar laws). The only answer to the solution is to fight!

    Here’s a good place for all of us to start: Internet Marketers Against the NC Affiliate Tax (I’ve just signed it myself).

    Additionally, NC-based affiliate marketers should contact theri state representative [find yours here] about this a.s.a.p.

    Experiences in Maryland and Minnesota (earlier this year) have shown that bills like these can be successfully fought when we get serious about it.

  5. [...] the issue in N.C. but those affiliates should be protesting in the streets if they care enough. Here is the link to the blog that posted this with tips for what you can do in the [...]

  6. John says:

    Geno I signed.

    Now if we can get them to read it they don’t seem to know what serve the People means anymore. We keep telling them what we want they iggy us! How can we get this to more people fast?

  7. John says:

    I sent this to each of my representatives see if I get a response…….

    Hello

    Please help fight the NC Affiliate Tax. This is putting thousands of people out of business people out of business as I type this letter. They cannot pay any taxes if they have no jobs! How can you help pass a law that is unconstitutional? It really upsets me that North Carolina cannot make money with out discriminating against a group of people. They discriminant against smokers, drinkers people who buy gasoline people who buy soft drinks and now online businesses where will it end??

    Thank You for reading this.

    Free Americans Now!

  8. Ely says:

    Well, may be we should apply marketing to the way we fight? How about a letter like this?

    To: Honorable …
    Cc: Local newspaper

    Honorable …,

    As a voting citizen I wonder, why does State Legislature want to rob our State budget of so much needed funds?

    You see, I am talking about proposed Affiliate Tax, that become so big source of income for our State citizens that it’s caught an eye of legislators as a potential source of budget income. And it is already.

    Every $1 earned by a NC affiliate and spent in the state brings about 4.25 cents to the state budget in sales tax. Then, it is paid by merchants to the local employees as a salary bringing more money, and once they spend it, adding to the state budget as even more sales tax.

    Proposed Affiliate Tax already forces some vendors to discontinue their relationships with NC affiliates (are you aware of Amazon.com decision?). It will also force many of affiliates to quit and seek other income opportunities or move out of state. As a result, we can safely see that the taxable base may be reduced in times as a result of the Affiliate Tax introduction. Sales tax from $0.10 (what will be left from the current $1 earnings by an affiliate) is meagerly $0.00424, less than half of a cent, an amount not even worth considering.

    So, in effect, Affiliate Tax will significantly reduce budget income from this popular and important business in the North Carolina state.

    Compare 4 cents and 0.425 cents. Why State Legislature wants to rob our State budget of so needed funds in the dire times like now?

    Sincerely,

  9. Geno says:

    John, Ely,

    Good straightforward letters to the legislators. Sorry for not replying to your above comments. Been busy with a travel over the Atlantic, and related tasks.

    Tomorrow (Tuesday, June 23, 2009) Matt Enders is going to the North Carolina General Assembly. Join him at Legislative Building at 16 West Jones Street in Raleigh, NC to fight the bill [details here]

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