I woke this morning to news that Amazon has removed Colorado Affiliates. Although I am still waiting to confirm this news I received two copies of the email received by two different Affiliates in Colorado. No doubt this will surprise a few affiliates this morning, but it shouldn’t.
Amazon had been very clear that they would terminate Affiliates in any state who passes nexus or online tax. They, along with other merchants, feel that the new nexus laws are unconstitutional and that we need to have a fair and constitutional approach. I am not passing judgment or voicing opinion on their decision to remove affiliates, just stating facts.
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 opposed 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.
The law passed in Colorado (HB 1193) is the most extreme one that has passed so far. Remember, I am not a lawyer or an accountant so you need to seek professional counsel. More or less it says collect or send yearly statements to Colorado residents and to the Department of Revenue that summarizes their purchases. From the very beginning this version bothered me; this is a big burden to merchants, small or large.
Some are expressing confusion of the decision to remove Colorado Affiliates from programs. Some of this comes from only reading one viewpoint; the words “victory” and “affiliate tax in Colorado is dead” were widespread. Rather than reading the bill some may have relied on someone’s interpretation. For the past couple of weeks I urged merchants to seek counsel of lawyers and accountant before taking action and before taking no action. I am sure Amazon made good use of the legal counsel and they have made the decision that is right for them. They are also sticking to their guns in removing Affiliates in states passing nexus laws or online sales tax laws they feel are unconstitutional.
Never put your business in the hands of any one else. Read different opinions and retain professional counsel before making business decisions.
Fortunately, the two Affiliates who emailed me are well prepared. When this all began I told them to identify replacement merchants for every niche, for every product in order to minimize the impact. These affiliates never stopped preparing. Although they were also working on the legislative action, they kept preparing their business model and never put their business at risk.
Sometimes the best approach is to prepare for the worst and hope for the best. It’s not pessimism but realism.
Any Affiliate in Colorado (or anywhere) is welcome to contact me for assistance on recovering or preparing. The reality is this, at any given time an Affiliate can be removed from a program at any time, with little or no notice.