Update To California Amazon Sales Tax

Update To  California “Amazon Sales Tax”

As you may recall from my post  about Amazon Sales Tax in California, not many people were happy.
For affiliate who reside in California and dropped by Amazon, this may be of interest to you. According to “The Sacramento Bee” Amazon has persuaded California lawmakers to delay tax collection.

Tentatively, Amazon has reached an agreement with California state lawmakers and brick-and-mortar stores to stop fighting a requirement that Internet retailers collect sales tax on any California purchases. Under a handshake deal, Amazon has accomplished delaying the sales tax in California until September 2012.

What does lay the groundwork for? Could it be a national online sales tax law. It’s seems that Amazon and retails like Wal-Mart and Barnes & Noble has agreed to lobby Washington over the next 11 months for an Internet sales tax law that would go across 50 states.

However, if no federal deal emerges by July 31,2012, Amazon would have to begin collecting California sales taxes starting on Sept. 15, 2012.

Currently state lawmakers are going to introduce a bill that will delay implementation of the online sales tax law until that date according to Assemblyman Charles Calderon D-Whittier. However, Gov. Jerry Born has not weighed in on the issue as yet.

For complete details you can read the Sacramento Bee.

Okay, this could help all affiliates if Amazon and other retailers can get a federal sales tax law implemented. Can our Congress stop arguing enough to do it? Hm-m-m, that’s an interesting question isn’t it.

This article is from myaffiliateplace.blogspot.com

Amazon, California Affiliates and Taxes

Amazon, California Affiliates and Taxes

To my surprise and many others, the California state law which went into affect on July 1, 2011 came quickly.

And as you can expect, Amazon and other online retailers will or are going to shut down their affiliate programs in the state. It has been estimated that for Amazon affiliates alone, that amounts to about 25000 sites that will no longer be able to advertise Amazon products. All sites, no matter how much money they have made for Amazon will shut down because of the new California law.

The governor of California thought that this is a “common sense idea”. However, did the state government just take an overview of how much revenue they thought they were going to make, without figuring in the possible lose of revenue, or the possibility that the bigger affiliates would move from the state? I wonder?

For those states that do not have these laws, it may be wise to court these companies, they may end up being the greatest revenue gainers in the long run.

Check out below to determine where your state is in the mix of the new law.

States where Amazon collects sales taxes:
Kansas
Kentucky
New York
North Dakota
Washington State

Why only these states? These are the only markets where it has physical stores or offices.

States where Amazon has cut ties with affiliates:

California
Illinois
North Carolina
Colorado

States at risk of being cut off by Amazon due to possible legislation:
Nevada
New Mexico
Missouri
Arkansas (Law Passed)
South Carolina
South Dakota
Minnesota
Vermont
Massachusetts
Rhode Island(Law Passed)
Connecticut (Law Passed)

Amazon has continued to use the 1992 Supreme Court Ruling of (Quill Corporation v. North Dakota) that prohibits a state from forcing a business to collect sales tax unless it has physical stores in the state.

However, because of the recession, and the shortfall many state budgets now have, the state governments are trying to get around these restrictions by passing laws that expand the definition of physical presence.
The states target are e-commerce sites that work with affiliates.

In essence if an affiliate is within the said state that has these new expanded laws of physical presence, they (Amazon) must pay the sales tax because of the sale that was created by the affiliate living within that said state.

As the states attempt to find ways to collect revenue, a new situation could be looming. Could it be federal law or the constitutionality of the state laws regarding this matter.

This article is from myaffiliateplace.blogspot.com

Amazon Ends Affiliate Relationship in Illinois

Amazon Ends Affiliate Relationship in Illinois

Well, I guess you can say Amazon is good to it’s word when they say that they would end their affiliate relationship with affiliate marketers if Illinois put through the Internet sales tax.

As I stated in an earlier post the Illinois state government wanted to start collecting sales taxes from affiliates in the state, for all sales made by Illinois residents. How many affiliates will this affect in Illinois? 9000.

So far, Amazon has closed its affiliate program in: Colorado, North Carolina, Rhode Island, and now Illinois. Will other states look to the Internet to close their deficits? They are trying.

California was considering the same such move. However, Amazon threatened to choke off their affiliate marketing program in California if  (10,000 affiliates would be affected in that state) state lawmakers proceeded with  legislation that would require the Internet retailer to collect sales tax from their state residents.

California, not deterred, decided to have a study done, to see the revenue affects it would have on their state. According to a study by the State Board of Equalization Staff Legislative Bill Analysis in CA it showed that if Amazon shut it’s affiliate program down,  it would affect the state adversely. It estimated that Amazon currently comprises roughly 50 percent of the Internet sales of large firms who have no
residence in California.

If Amazon and Overstock stayed on board and other people continued to sell on Ebay, the sales tax that California would collect would be:

$152 million in 2011-12
$317 million in 2012-13

Since Amazon stated that they would not continue their affiliate program, the revenue would shrink to:

$114 million in 2011-12
$234 million in 2012-13.

Mind you, that is just Amazon. If other online businesses followed the same path as Amazon, the revenue would be further diminished. In addition, the termination of the program would further lower revenues because it would adversely affect employment, which would translate into less revenue from personal income taxes and corporation taxes.

I wonder if the other states did a comparison study?

In addition, Texas slapped a  $269 million bill for uncollected sales taxes at Amazon distribution center in Texas. Amazon threatened to close the doors on the distribution center if they proceeded with the billing.

Why is Amazon proceeding in this manner? They feel the law is unconstitutional and there is a U.S. Supreme Court ruling in 1992 that is also relevant. The ruling stated that retailers can’t be forced to collect sales tax on out-of-state shipments unless they have offices in those states.

Eventually, this issue will have to be addressed by Congress. Don’t you think.

This article is from myaffiliateplace.blogspot.com

Illinois – and the Internet Sales Tax

Governor Quinn signed HB3659 into law which forces out-of-state retailers to collect Illinois state sales taxes on Internet sales.

This law states a view that an affiliate marketer constitutes a tax nexus for retailers. (A nexus is used in tax law to describe a business that has a presence in a state, and which makes this business subject to state income taxes and sales taxes for sales within that state).

How does this law affect affiliate marketers in Illinois? It may put them out of business. How? Well, as can be expected the target of this law seems to be online retailers like Amazon, who do not have a physical presence in Illinois. And this law may have the same consequences as it had in other states.

When other states have put in to place this same type of legislation, Amazon and other online businesses removed the affiliates of that state from their affiliate programs because they did not want to assume a tax nexus. No tax nexus, no additional tax revenue paid by the online business.

If Amazon and other online retailers fire their affiliate marketers, it could mean a lose of income or a business for the online entrepreneur, and a lost of revenue for the online retailer. And for the state, a lose of tax revenue.

Who wins? No one, in my opinion.

This article is from myaffiliateplace.blogspot.com

Content and Google’s New Algorithm

Content and Google’s New Algorithm

It looks like Google has implemented the new search algorithm change that which has impacted 11.8% of all their queries. Currently, this algorithm only affects search in the US, however, this algorithm may be rolled out to the rest of the world at a later date.

Officially speaking, Google says “This update is designed to reduce rankings for low-quality sites—sites which are low-value  for users, copy content from other websites or sites that are just not very useful. At the same time, it will provide better rankings for high-quality sites—sites with original content and information such as research, in-depth reports, thoughtful analysis and so on.”

Obviously rankings are shifting downward in Google’s search engine for content that is labeled low-quality or “shallow”. Thus, as the algorithm works its magic, you will probably see changes on a page by page basis. But how will it affect a webmaster’s domain overall?

I, at first thought that the algorithm change would take it on a page by page basis, pulling bad copy rankings down, and good copy rankings up or leaving it the same.

However, the algorithm change, seems to have affected some domains. Some of the winners and losers were: EzineArticles, HubPages, ShopWiki.com, and The Find.com, while some of the big winners were Wikipedia, eBay, Walmart.com and Amazon.

As I researched the web, regarding this issue, The consensus is that many felt that it was directed only to the “content farms”.  However, the people at Google claim that these changes were not meant to penalize any particular site, or type of content.

My main question, “How does Google identify “high quality” and “low quality” content? Of course, Google is not going to share the details of their techniques. So, if sites want to get into the good graces of Google, it’s time to either tweak or overhaul your website if you want to survive another day on the Internet. (In the coming days and weeks, you will be seeing some changes to my site. Which, I’m rather excited about, because I’ve realized for some time that it was needing a major overhaul.)

Note: Just for your information, this Google update does not include the new “chrome extension” that Google launched a short time ago.

This article is from myaffiliateplace.blogspot.com

Is Social Media and E-Commerce Connecting?

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Is Social Media and E-Commerce Connecting?

It seems that maybe e-commerce is coming full circle and now, joining the social media network. An example of this is Amazon new feature, though still in beta, which lets you tap into the Facebook network.

What’s it’s purpose? To allow you to get Amazon recommendations and discover your friends’ “Favorites and likes”. Here are some of the things that you can now discover with the new feature:

1. Recommendations for movies, music, etc. Though this is also based on your Facebook profile.
2. See Facebook friends’ Amazon Wish Lists more easily.
3. See upcoming birthdays.
4. Gift suggestions for friends based solely on their profile.
5. Explore your friends profiles to see who shares similar interests.

However, Amazon assures all that no personal data will be shared with Facebook, and the company will not attempt to contact your Facebook friends.

What does that that mean for Facebook? It means that the role of the social media network may increase through advertising. And, let’s not forget about Google. With the increased competition between Google and Facebook may end up being a big win for e-commerce. Which means, not only the sale of virtual good but also the sale of merchandise.

This new direction by Facebook and Google was inevitable, but as with anything new, privacy will be an issue that may make some people a little skittish. Let’s face it, do you really want their friends to know what your recent purchases were on say, Amazon? Maybe it doesn’t bother you, but for some, it does. (By the way, Bing added a link to Facebook on their search results about a year ago. Interesting isn’t it.)

To conclude, the old way of getting advice about a product or service was through word-of-mouth, which, as you all know, the advice may have come after you bought the “wrong product or service”. On the other hand, online social media networking, can give you information/advice you need at lightning speed-and hopefully before you bought the product.

This means, for those e-commerce stores that give you a quality service or product, be prepared for an increase in consumer traffic. For those e-commerce stores where the experience is not up to consumer expectations, it’s time to make some changes, because word on the Internet travels very quickly.

This article is from myaffiliateplace.blogspot.com