CJU Course: It’s a TAXing Debate: Don’t Cut Me Off
So many states have implemented affiliate nexus tax laws. What does this mean to you as a publisher? What does this mean to you if you are an advertiser who does not have a store in the state? Come listen to our panel to hear how others are managing the challenge. The panel consisted of:
- Jennifer Lovette, Vice President, Client Development, CJ (Moderator)
- Rebecca Madigan, Executive Director, Performance Marketing Association
This was a very informative discussion, even for someone like me who tries to keep abreast of what’s going on in an effort to help however I can. I should note that since CJ (since this info is about a month stale) that the Governor of CA has signed the deal with Amazon and many merchants have welcomed CA affiliates back into their programs.
Personally, I only accepted a few that I really liked before and declined the pushed offers from the others as I already did my link removal on my sites, but I’m the lowest level of affiliate in terms of how much I personally make, so it’s the bigger affiliates who can really make a difference in leveraging their income figures in this fight!
Bullet Point Review!
- Do we want to fight this on a state by state level or on a national level.
- Publishers aren’t mad at the advertisers, they’re mad at the legislature.
- On average affiliates lose 25-45% of their revenue, the state loses income tax revenue, and never collect the sales tax.
- There are a lot of names, which are confusing, but we’ve chosen affiliate nexus law as a general catchall phrase.
- Quill Corp v. North Dakota: advertising does not constitute physical presence or nexus. It became a constitutional issue.
- Passed: California, New York, North Carolina, Rhode Island, Illinois, Connecticut, Arkansas.
- Big box retailers banded together this year to support this tax to try to get Amazon to pay tax. Rumor is they spent 11 million.
- The PMA surveyed California affiliates after the budget bill was signed here:
- 32% are moving out of state or plan to.
- 20% decided to shut down their affiliate marketing efforts altogether
- 35% of lost over half their income when the law passed.
- Amazon & CA have come to an agreement that will eliminate this tax for 1 year – we need to look at it more long term.
- They want to get a federal sales tax solution in place by July 2012. If they’re not successful, the law gets reinstated September 15, 2012.
- Streamline Sales Tax Project. 24 states have agreed to this. Main street fairness act needs to pass to allow SSTP. The chance of this happening isn’t very high.
- Amazon just cut a deal with the state that benefits their own business, so now all these other advertisers who haven’t been involved in the fight or the opposition will be forced to collect tax. Now is the time to fight for yourself & promote the federal solution.
- Board of directors of the PMA are new and still determining whether to fight nationally or state level.
- What can you do?
- Think before you act.
- Make Your Case
- Simplify actions
- Measure twice, cut once. Advertisers need to make sure you’re doing what’s best for your business before making a knee jerk decision to cut affiliates. Talk to a lawyer if you have to.
- There are ways to work together, identify your threshold of risk.
- Taxes will always exist, think long term when making decisions that are going to affect your business.
- No matter what side you’re on, WE can make a difference
- Things change quickly so don’t give up!
If you were an attendee of CJU and registered for their (awesome!) CJUniverse network, you can download a PDF of Jennifer’s slides here.
Read MoreThanks for Nothing, Jerry Brown
Gov. Jerry Brown signed the budget today, which included affiliate nexus language. So, there goes a substantial part of the income of 25,000 small business in California. The Performance Marketing Association reported it earlier today. Executive Director Rebecca Madigan is in Sacramento today attempting to do what she can to benefit Affiliates.
Unfortunately one of the bills that was included also included very vague language about even doing business with California based vendors, hosting companies, etc, so effectively this affects not just the affiliate marketing industry in California, but all small businesses.
Way to go, Jerry, shoot California in the foot.
Luckily for me, I do not make the bulk of my income from being an affiliate. My ventures into acting as an affiliate have been mostly for the learning experience and to try to offset the costs of domains and hosting for my various web-based hobbies.
This does impact my husband’s site, RailroadRedux.com, as he has a large Amazon widget recommending different model railroading books, and impacts my site GirlScoutGuide.com as Fabric.com exclusively carries Girl Scout licensed fabric.
Affiliate Programs Dropping CA Affiliates (Updated As Of 12:45 PM PDT 7/26/11)
- 6pm.com
- 1-800-PetMeds
- Adorama
- Amazon.com
- Amerimark
- Backcountry
- Bag.com
- BagsBuy.com
- Bargain Catalog Outlet
- Barware.com
- BedBathStore
- B&H Photo
- Boden
- BookCloseouts.com
- BrickHouse Electronics
- Brylane Home
- BuildDirect.com
- Cabela’s
- Calvin Klein Jeans
- Camp Saver
- Candelabras.com
- CD Universe
- ChristmasCardsDirect.com
- CKU
- Collections Etc.
- Compact Appliance
- Costume Craze
- CreateForLess.com
- CSN Stores
- Cymax
- Dermadoctor
- Dr. Leonard’s
- Endless.com
- Eurosport
- Fabric.com
- Fingerhut
- FootSmart
- GAIAM
- Garden.com
- Gardeners Supply
- Gettington
- HalloweenCostumes.com
- Hayneedle Stores
- Herroom
- Jessica London
- KingSize Direct
- K. Jordan
- Luggage Online
- Maryland Square
- MetroKitchen
- Movies Unlimited
- MyFavorite Shoe Store
- OneStopPlus
- Overstock.com
- Overstock International
- PC Connection
- PhotoCardsDirect.com
- Potpourri Group
- Powells.com
- Roaman’s
- Shindigz
- Shoe.com
- ShoeBacca
- ShoeBuy.com
- ShopBop.com
- ShoppersChoice.com
- Silkpalms.com
- SmartBargains.com
- Spiritline
- StumpParty
- TABcom
- theWineEnthusiast
- ThinkGeek
- TimeForMeCatalog
- Total Gym
- Woman Within
- Woot.com
- Zappos.com
I’ll keep this list up to date, so if you are a CA affiliate and get dropped by a merchant not on this list, please let me know.
Edited to add: when my husband came home and I told him to remove his Amazon widget, he decided to not just remove it, but to replace it with a message to his site’s visitors telling them why his book recommendations were removed and urging people not to shop with Amazon.com in support.
Read MoreDue to recent changes in California law which negatively affect affiliates, and the fact that Amazon dropped all affiliates who reside in California, I will no longer be featuring deals from Amazon.com. I strongly recommend that you no longer use Amazon.com or any of their services due to the poor way they treat the people that advertise for them.
ad:tech San Francisco: Affiliate Marketing – The Big Challenges
Session Description: As the affiliate marketing industry grows, it continues to encounter challenges on multiple fronts. One front burner issue for brands and advertisers remains affiliate legislation. From New York to California to Texas, the nuances of tax collection in each state are still being worked out and, in many cases, litigated. With this vital issue still in flux, what are brands and marketers doing to move forward? How can advertisers keep track of the state-by-state laws, and how can they develop strategies for today and for the future? Trademark legislation is also a key issue for affiliate marketing and we’ll explore how brands walk the fine line between protecting their brand and getting wider exposure. Finally, we’ll tackle how affiliate legislation in various states will impact all online retailers.
This session took place Wednesday, April 13, 2011. The speakers:
- Carolyn Tang Kmet, Director of Affiliate Marketing, Groupon (Moderator)
- Angel Djambazov, OPM, KEEN Footwear
- Rebecca Madigan, Executive Director, Performance Marketing Association
- Brian Looney, Senior Director of Business Development, CitizenHawk, Inc.
- Seana Montgomery, Senior Paralegal, McAfee
Impression comment
Bullet Point Review!
- Affiliate marketing has become a legitimate marketing channel.
- Ad Tax, aka Amazon Tax
- Lots of spin going on from the pro side.
- No physical presence – not required to collect sales tax.
- Reality is that there’s no money involved
- What does it mean for merchants?
- If you have an affiliate program in states where this passes, you must now collect sales tax for all purchases made into the state, Or
- Terminate affiliates (obviously the feared option).
- What happens when it passes?
- 25-35% loss of income to affiliates.
- Lay offs, downsizing, some companies may close entirely.
- People move out-of-state.
- Income tax decreases.
- Legislation has been beaten back 25 times.
- Passed in 5 states.
- 8 states in play in 2011.
- Brand Protection is Important.
- Typosquatting relies on typos in URLs.
- Bad spelling is as prevalent as the common cold.
- Typing too fast, fat fingers, old keyboards that stick, small keyboards on mobile devices.
- More than 20% of all Internet traffic is typed in.
- 15-30% of the time the URLs are misspelled.
- Companies often classify this as a legal issue instead of a marketing or traffic issue.
- Defending yourself against a typosquatter is expensive when you get lawyers involved.
- URDP – uniform domain name dispute resolution policy.
- Trademark infringement considered anything confusingly similar. Typos don’t count but content does. $1500 to file a complaint in court.
- You’re not filing against the domain name, you’re filing against the domain owners.
- Turn trademark enforcement into a profit center.
- Laws are international, but more enforceable on .com & .net.
- Marketing channels are business tools. Each should be employed for a specific purpose.
- You’re obligated to police your brand – your trademark can get canceled if you don’t prove you’re actively policing infringements.
- Learning from KEEN Footwear.
- Be sure your affiliates understand what affiliate marketing is.
- Affiliate publisher joined, tried selling his own brand of shoes thinking affiliate meant an endorsement similarly to the definition of “affiliate” in the TV world. Eventually showed up at the corporate offices demanding Keen CEO do more to leverage their partnership in trying to sell is shoe related product.
- Not all publishers understand what the channel is. Educate them.
- Be sure to clearly define all legal aspects.
- 20% of your affiliates are driving the majority of the revenue.
- What can you do to measure impact of amazon tax:
- Monitor legislation in states crucial to your success.
- Join the PMA to help.
- Stay informed through geekcast.fm, ReveNews.com, PMA blog.
- Create a contingency plans with a different payment or advertising model to not loose these valuable partners.
- Garbage can bills popping up including more junk trying to get out-of-state retailers to collect sales tax. Just says “don’t do business in our state”.
What #ASE11 Sessions I’m Voting For
Let the games begin! Voting has opened up for Affiliate Summit East 2011. While some people have not been happy with this voting system, I think it evens the playing field nicely. As well, it clears any conspiracy theories about how sessions are chosen.
Before I begin, I will say I have a horse in this game. I’ve submitted a panel, The Future of Coupons in Affiliate Marketing, for consideration. If picked, I’ll be moderating this panel with industry coupon veterans Mike Allen (Shopping-Bargains.com), Connie Berg (FlamingoWorld.com), Carolyn Tang Kmet (Groupon.com), and Kim Rowley (ShoppingBookmarks.com). Please take a moment to register, confirm, then vote for our panel!
Okay, that being said, these are the panels I’m voting for. All of them have very intelligent speakers, well thought out ideas, and will offer merchants and affiliates great insight into the topics.
- It’s Not Your Mother’s Affiliate Program
- Creatives Deliver Success
- Evolution of Local Search
- Do-Not-Track? Not-So-Fast
- Killing the Affiliate Nexus Tax Dead!
- Got an Idea? Make it a Reality.
- 10 Questions for a Prospective Affiliate Manager
- A World Without Cookie Tracking
- How to Convince Online Shoppers You’re Real
- Learn to Create a Likeworthy Facebook Page
- Social Media in Niche Markets
- Merchant ABCs – Launching a New Merchant Program
- How to Avoid FTC Scrutiny in Advertising
- Affiliate Improv!
- Are Your Affiliates Adding Value?
Affiliate Marketing Fanatics 45: Interviewing Lucas Brown
Podcast: Play in new window | Download
Affiliate Marketing Fanatics – A couple of hyper-caffeinated affiliate marketers (Mike Buechele) and (Trisha Lyn Fawver) talk about all things Affiliate Marketing. From blogging to branding, social media to search, video and more!
We’re continuing our series of interviews with some speakers at Affiliate Summit West 2011, coming up in just a month at the Wynn in Las Vegas. This time, we talk to Lucas Brown about his origins in affiliate marketing & his panel “Identifying Scam Networks”. Lucas tells us about his software-as-a-service product, HasOffers.com, as well. In in this episode we discuss:
- Lucas’ panel with his fellow speakers: Kim Riedell (VP Client Development, Commission Junction), Rebecca Madigan (Executive Director, Performance Marketing Association), & Hersh Sandhoo (CEO, HealthConverter.com).
- Lucas’ origins in affiliate marketing and the high costs that used to exist to get started.
- The HasOffers.com Offer Exchange and what it’s doing to lower the barrier of entry for people to get started as merchants.
- The possibility of a future certification or vetting system for networks within the industry.
Want to catch up with us & ask questions for the next show? Find us on Twitter: @AMF_Podcast, @MikeBuechele & @TrishaLyn. Like us on Facebook! You can also ask Trisha questions through FormSpring.me. Or leave us a comment!
Special thanks to GeekCast.fm for hosting Affiliate Marketing Fanatics.
Read MoreFaces & Voices behind the Affiliate Nexus Tax Mistake
Recently I was asked to come to San Francisco and participate in shooting a video to help convince legislators here in California that passing a nexus tax law similar to those passed in New York, Rhode Island, and North Carolina would be detrimental to the state economy, rather than positive. Unfortunately I fell ill at the last minute and was unable to participate, but I recently see that the video the Performance Marketing Association put together is available online and really puts some faces to the issue.
I hope this will help legislators reconsider their views on the advertising tax and consider it’s impact on 25,000 small businesses here in California. Please take a look at the video and do what you can to share it. If you’re sharing on Twitter, please use the hashtag #noadtax.
They’ve already been thanked once, but I’ll send out another big thanks to those that spared their time and opened their offices to the shooting of this short video:
- Rebecca Madigan, Performance Marketing Association
- Loren Bendele, Savings.com
- Alan Gray, Newsblaze.com
- Kevin Johnson, Ebates.com
- David Lewis, Cashbaq.com
- Lisa Picarille, LisaPicarille.com
- Eva Rosenberg, TaxMama.com
- Brook Schaaf, Schaaf-Partnercentric
