Connecticut passed a wonderful little piece of legislation that requires online retailers to charge sales tax if they have affiliates in Connecticut even if the retailer doesn’t have a physical presence in Connecticut. This is ridiculous!
As an Amazon affiliate, I am not selling anything on behalf of Amazon. I am simply pointing people towards Amazon, and getting paid a commission for my efforts. It doesn’t make sense that this would count as a physical presence.
So how does Amazon respond? They’ve terminated all their affiliate contracts for people in Connecticut, including myself. While I’m very frustrated by this, I understand why they did it and I’m more frustrated with my state’s government. They knew Amazon would leave, but they didn’t care. So now they are losing piles of tax revenue because Amazon’s affiliates are no longer making taxable income from Amazon.
The text of the email I got from Amazon:
Hello,
For well over a decade, the Amazon Associates Program has worked with thousands of Connecticut residents. Unfortunately, the budget signed by Governor Malloy contains a sales tax provision that compels us to terminate this program for Connecticut-based participants effective immediately. It specifically 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.
We opposed this new tax law because it is unconstitutional and counterproductive. It was supported by big-box retailers, most of which are based outside Connecticut, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.
As a result of the new law, contracts with all Connecticut residents participating in the Amazon Associates Program will be terminated today, June 10, 2011. Those Connecticut residents will no longer receive advertising fees for sales referred to Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com. Please be assured that all qualifying advertising fees earned on or before today, June 10, 2011, will be processed and paid in full in accordance with the regular payment schedule.
You are receiving this email because our records indicate that you are a resident of Connecticut. If you are not currently a resident of Connecticut, or if you are relocating to another state in the near future, you can manage the details of your Associates account here. And if you relocate to another state after June 10, 2011, please contact us for reinstatement into the Amazon Associates Program.
To avoid confusion, we would like to clarify that this development will only impact our ability to offer the Associates Program to Connecticut residents and will not affect their ability to purchase from www.amazon.com.
We have enjoyed working with you and other Connecticut-based participants in the Amazon Associates Program and, if this situation is rectified, would very much welcome the opportunity to re-open our Associates Program to Connecticut residents.
Regards,
The Amazon Associates Team