07 Mar 2010

Amazon shuts down Colorado Affiliates

6 Comments affiliate marketing

I got this note below, which shut down the BlitzLocal affiliate account on Amazon as of March 8th because of the new Colorado Affiliate Tax (HB 10-1193).  Read it below:

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.

There is a right way for Colorado to pursue its revenue goals, but this new law is a wrong way. As 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 and to Governor Ritter, who signed the bill.

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. Please be assured that all qualifying advertising fees earned prior to March 8, 2010, will be processed and paid in accordance with our regular payment schedule. Based on your account closure date of March 8, any final payments will be paid by May 31, 2010.

We have enjoyed working with you and other Colorado-based participants in the Amazon Associates Program, and wish you all the best in your future.
Best Regards,

The Amazon Associates Team

Update: Perhaps with some Denver medical marijuana, the Colorado legislators might ease up a bit.

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written by
Dennis Yu is the Chief Technology Officer of Portage. He is an internationally recognized lecturer in Facebook marketing, having been featured in The Wall Street Journal, New York Times, LA Times, National Public Radio, TechCrunch, Fox News, and CBS Evening News. He is also an author at InsideFacebook and AllFacebook. Dennis has held leadership positions at Yahoo! and American Airlines. He studied Finance and Economics from Southern Methodist University and London School of Economics. Besides being a Facebook data and ad geek, you can find him eating chicken wings or playing Ultimate Frisbee in a city near you. You can contact him at dennis@portage.co, his blog, or on Facebook.
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6 Responses to “Amazon shuts down Colorado Affiliates”

  1. Reply Mike G. says:

    Exactly how much money was this supposed to raise for the state? 4 other states tried this same thing before Colorado, and Amazon as well as others cancelled their affiliate marketing agreements in those states too. It was insanity for the lawmakers in Colorado to expect anything different. What a waste of time and resources.

  2. Reply Pat says:

    So lets see:
    * New York
    * North Carolina
    * Rhode Island
    * Colorado
    * California?

    ( http://www.theregister.co.uk/2009/07/01/amazon_cuts_affiliates_rhodeisland_hawaii/ )

    Now do this. Hardly makes Colorado unique. At what point does Amazon just close the affiliate program altogether, or stop their whining and pay the tax bill.

  3. Reply Keith Wilcox says:

    Totally sucks. I’m still steaming about it after reading my letter this morning.

  4. Reply Pat says:

    Fine be upset. But remember that *Amazon* is making the choice. Also Dennis (since you live in Colorado) you might want to remember that Colorado Springs has just “achieved” third-world status. ( http://www.denverpost.com/news/ci_14303473 )

    As of March 1:

    * no garbage cans in parks
    * sold off 2 police helicopters
    * 1/3 of street lights turned off
    * no marketing budget to attract tourists

    because tax revenue isn’t there. It is time a very profitable company (AMZN) that takes advantage of Colorado’s infrastructure to make a profit returns some of that profit to maintain that very same infrastructure.

    Be upset yes — but direct your anger at the borrow-and-spend Republicans AND at Amazon.

  5. Reply tom.wilkowske says:

    Individual states don’t seem to have much leverage in this. Kind of surprising, though, that Amazon would take such a cavalier attitude toward its affiliates.

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