Earlier today Colorado-based affiliates participating in the Amazon Associates program (Amazon’s affiliate program) have received a notice of immediate termination. Shawn Collins posted the full text of it here. Here’s an excerpt:
Dear Colorado-based Amazon Associate:
We are writing from the Amazon Associates Program to inform you that the Colorado government recently enacted a law to impose sales tax regulations on online retailers. The regulations are burdensome and no other state has similar rules. The new regulations do not require online retailers to collect sales tax. Instead, they are clearly intended to increase the compliance burden to a point where online retailers will be induced to “voluntarily” collect Colorado sales tax — a course we won’t take.
We and many others strongly oppose this legislation, known as HB 10-1193, but it was enacted anyway. Regrettably, as a result of the new law, we have decided to stop advertising through Associates based in Colorado. We plan to continue to sell to Colorado residents, however, and will advertise through other channels, including through Associates based in other states…
Your Associates account has been closed as of March 8, 2010, and we will no longer pay advertising fees for customers you refer to Amazon.com after that date… [key points underlined by me]
The law Amazon is referring to is the Colorado Internet Sales Act signed by Governor Ritter on February 25, 2010 [more here]. What surprises me is that amazon is intending “to continue to sell to Colorado residents”, but not through Colorado-bases affiliates. Upon reading Brian Strahle’s post on the matter, Melanie Seery’s post, and this article at TheDenverChannel.com, I was under an impression that this law affects all online merchants doing business with Colorado residents. However, Amazon is making it clear that they are not withdrawing from Colorado altogether, but are ceasing relationships with their Colorado affiliates only.
Is Amazon doing this to draw the Colorado government’s attention to the matter once again, and do this through affiliates (again)? It certainly seemslike it, as the above-referenced letter to Colorado-based affiliates also says:
…we repeatedly communicated to Colorado legislators, including those who sponsored and supported the new law, we are not opposed to collecting sales tax within a constitutionally-permissible system applied even-handedly. The US Supreme Court has defined what would be constitutional, and if Colorado would repeal the current law or follow the constitutional approach to collection, we would welcome the opportunity to reinstate Colorado-based Associates.
You may express your views of Colorado’s new law to members of the General Assembly [http://www.leg.state.co.us/Clics/CLICS2010A/csl.nsf/directory?openframeset=] and to Governor Ritter [http://www.colorado.gov/cs/Satellite/GovRitter/GOVR/1177024890452], who signed the bill.
I thought affiliates have already expressed their views loud and clear [more here], and it was because of their effort that the focus on affiliate marketers has been removed from the bill. Yes, it is true, that a law like this makes things extremely burdensome for the merchants that sell to Coloradans, but why remove the affiliates? Does a step like this resolve the issue, and make a merchant non-responsible for the compliance with the new Colorado law? Nothing in what I’m reading is pointing to this. Please correct me if I’m wrong.