A response to Colorado Amazon Affiliate “Pink Slips”

Hi, the following is a response from one of my readers. For some reason, it wasn’t showing up in the comments section. But I feel it is very, very good and worthy of its own post. -Debra

All of the email addresses posted below are publicly available online, so I don’t think it hurts for me to post them here.  This is a list of the Colorado General Assembly’s email addresses, and the email I just sent them.

suzanne.williams.senate@state.co.us, bruce.whitehead.senate@state.co.us, al.white.senate@state.co.us, reppaul@aol.com, mark.waller.house@state.co.us, edvigil1@gmail.com, glenn.vaad.house@state.co.us, lotochtrop@aol.com, abel.tapia.senate@state.co.us, max@maxtyler.us, nancy.todd.house@state.co.us, cohd58@yahoo.com, pat.steadman.senate@state.co.us, nancyspence@qwest.net, brandon@brandonshaffer.com, gail.schwartz.senate@gmail.com, senatorschultheis@gmail.com, mark.scheffel.senate@state.co.us, nwden34@yahoo.com, spencer.swalm.house@state.co.us, ken.summers.house@state.co.us, amy.stephens.house@state.co.us, john.soper.house@state.co.us, jerry@repsonnenberg.com, judy.solano.house@state.co.us, sue.schafer.house@state.co.us, christine.scanlan.house@state.co.us, chris.romer.senate@state.co.us, senatorrenfroe@gmail.com, su.ryden.house@state.co.us, jim.riesberg.house@state.co.us, ellen.roberts.house@state.co.us, joshpenry@gmail.com, joe.rice.house@state.co.us, kpriola@gmail.com,dianne.primavera.house@state.co.us, jack.pommer.house@state.co.us, cherylin.peniston.house@state.co.us, sal.pace.house@state.co.us, linda.newell.senate@gmail.com, rep.nikkel@gmail.com, john.morse.senate@state.co.us, murrayhouse45@gmail.com, shawnmitch@aol.com, joe@joemiklosi.com, repmiddleton@gmail.com, michael.merrifield.house@state.co.us, wes.mckinley.house@state.co.us, mcfadyen2002@hotmail.com, beth.mccann.house@state.co.us, mike.may.house@state.co.us, tom.massey.house@state.co.us, marshalooper@gmail.com, kevin@kevinlundberg.com, larry.liston.house@state.co.us, replabuda@yahoo.com, rep.kent.lambert@comcast.net, claire.levy.house@state.co.us, mike.kopp.senate@state.co.us, steve.king.house@state.co.us, james.kerr.house@state.co.us, andy.kerr.house@state.co.us, mike.johnston.senate@state.co.us, repkagan@gmail.com, john.kefalas.house@state.co.us, moe.keller.senate@state.co.us, repjoeljudd@joeljudd.com, electkenkester@hotmail.com, senatorhudak@gmail.com, mary.hodge.senate@state.co.us, dl.hullinghorst.house@state.co.us, ted.harvey.senate@state.co.us, rollie.heath.senate@state.co.us, cheri.gerou@gmail.com, jerryfrangas@earthlink.net, joyce.foster.senate@state.co.us, sara.gagliardi.house@state.co.us,bob.gardner.house@state.co.us, gardner@plains.net, cindy.acree.house@state.co.us,repdennisapuan@gmail.com, david.balmer.house@state.co.us, randy.baumgardner.house@state.co.us, debbie@debbiebenefield.org,laurabradford55@gmail.com, bob.bacon.senate@state.co.us, betty.boyd.senate@state.co.us, greg@gregbrophy.net, terrance.carroll.house@state.co.us, edward.casso.house@state.co.us, loiscourt@msn.com, repcurry@gmail.com, bill.cadman.senate@state.co.us, brian@briandelgrosso.com, mferrandino@yahoo.com, randyfischer@frii.com, dan.gibbs.senate@state.co.us

To Whom It May Concern,

I’m not a big business… I’m a former teacher (Greeley), turned massage therapist (Aurora), turned business owner (Denver and Parker).

I’m a regular 30 year old married guy with a small online presence.

Since my voice hasn’t been heard in the past, I’m emailing everyone who’s email address I can find.

The passage of HB 10-1193, and the Governor’s signing of the bill, has resulted in my termination from the Amazon Associates program.

Other affiliate programs and businesses are sure to follow suit with their contractors in Colorado.

In case you’re not aware, Amazon’s Associate program is a program in which people can get paid referral fees for selling products on Amazon.com.

I WAS earning referral fees from marketing those products to people all over the world.

Those referral fees were then taken and spent in Colorado, at COLORADO businesses, hiring contractors (writers, email support, bookkeeping services, etc.) IN COLORADO, and helping to build the economy of our state.

I have SEVERAL friends who have also found their accounts terminated today, everyone I know (myself included) paid taxes on this income last year, and everyone I know who is part of this program in Colorado spends this money in Colorado.

I won’t be able to earn income anymore through Amazon.com, at least not in Colorado, thanks to the passage of this poorly enacted piece of legislation.

Why is it a poor piece of legislation?

It was created to influence retailers into paying Colorado sales tax.

Amazon.com has no business presence in Colorado.

But they have me as an affiliate, a contractor, a person who has no say or control over what direction Amazon will take their business Neither do 99.999% of all affiliates through Amazon.

However, because you designated, through this law, that affiliates constitute a business presence for Amazon.com in our state, Amazon terminated ALL affiliates in Colorado, even those earning less than $10,000 annually (which is most of us).

Again, affiliates are not employees.  Affiliates have no real say in the direction of Amazon’s business.

Just so you’re aware, here’s what will happen with the passage of this law.

The big players who can afford to will simply move their businesses out of Colorado, so you will no longer benefit from their spending or through being able to tax their businesses.

You will not be able to collect taxes from Amazon.com, and other companies will simply choose not to associate themselves with affiliate marketers based out of Colorado.

Current companies with larger operations in Colorado as contractors will either relocate their contractors or simply terminate their relationship.

In the online world, all this law has done is penalize smaller affiliates.  In the “real” world, what taxes are you going to be able to collect?  And how will this law be enforced?

HB 10-1193 is quite possibly the worst way to deal with legislation surrounding collecting Colorado sales tax.

I agree that sales tax in our state is a good thing.

– But what about the income collected in the form of income tax from 1099 contractors?
– What about those who choose Colorado as a place to operate their businesses and spend money hiring employees, (people who buy groceries and gas at local stores), buying foreclosed property and fixing it up, in our state?

I’m pretty sure this bill was passed with good intentions, but I’m completely lost as to the thinking behind how passage of this law would increase revenues or spending or the overall wellbeing in our state.  This law has been passed with no positive result I can see now, or in the future.

You were hoping this law would help to alleviate the state’s budget deficit.  Instead, it takes money, employment, and investment opportunities out of Colorado.

Since Amazon has terminated it’s affiliates, other online retailers will follow suit.

As for me, I don’t know what I will be doing, but will be figuring it out this afternoon.

I don’t know if my small voice really makes any real difference, especially since this legislation was passed anyway.

However, I thought it important for you to know how this legislation has affected my ability to spend money in our state, and the state’s ability to collect taxes on my income.

In case it’s not clear from this email, a vote in favor of this bill has affected my life and my ability to help our state in a very negative way.

Regrettably,

Jonathan Kraft

About Debra Zimmer

After 25 years of growing entrepreneurial businesses at companies such as Microsoft, where she attracted 700,000 members into an online community in 18 months and then grew a second one to 250,000 members in 10 months, Debra Zimmer then struck out on her own to grow an online retail store to 6-figures of income and put it on AUTOPILOT for 3 years. With an engineering degree and an MBA from Columbia Business School, Debra is the undisputed expert in helping experts, entrepreneurs and executives to focus their brilliance and magnify their impact using social media and internet marketing tactics.

Comments

  1. Josh says:

    I understand the frustration you are feeling as a result of Amazon’s decision. But it is important to understand exactly what this law says. Unlike other states that have passed similar sales tax laws, the Colorado law does not rely on the premise of affiliates constituting a physical presence in the state. Amazon’s decision to end its affiliate relationships in Colorado does NOTHING to reduce the impact of this bill on the company.

    The law passed in Colorado does not say that affiliates constitute a physical presence. It merely states that Amazon, and other online retailers, are required to disclose to a buyer the sales and use tax that the customer owes the state of Colorado. It doesn’t require Amazon to collect that tax or to pay that tax in any way. The decision to end relations with affiliates was merely a spiteful response to the Colorado, and to scare California into killing a similar measure under consideration.

    Amazon took their anger out on affiliates and Colorado citizens. If we let one company bully us into passing tax breaks that favor them then what will stop every other major corporation from doing the same?

    1. Debra Zimmer says:

      Thanks Josh for clarifying the law.

      My personal frustration is not really about Amazon, as I derived little to no revenues from them. My concern is that I am an online retailer who uses affiliates to help drive business. It is effective because as a little company, I can’t afford a lot of up-front expenses, but I can afford to pay-for-performance. This is the beauty of affiliate marketing, I only have to pay an advertiser when they make the sale.

      Now, from what you are telling us, according to the law (and assuming a similar law is created in other states), I know have to calculate and figure out sales tax for every state that passes this law. How I will know about all these little laws is beyond me. I wouldn’t even know Colorado passed one if I hadn’t received a letter from Amazon. So I guess I have to pay money to hire an attorney to figure that out. And they have to be on retainer because the laws are going to keep changing.

      Then I need to send Colorado reports of every customer that bought from me, their contact information and how much money they owe you. Now you are requiring me to violate my privacy policy resulting in more legal fees.

      And, I need some software shopping cart product to make all these calculations and print these reports. Now I need to wait until someone else creates one because I don’t have the resources to create one myself. Now I’m open to more legal attacks as I can’t comply to the law.

      I realize Colorado is trying collect sales tax from Colorado residents. Now how are they actually going to do that? How many millions of dollars are they going to spend to process all that data that is sent to them? What are they going to do, send me a letter because I bought 1 book online from Amazon last year? The cost of processing that information far outweighs the benefit they will gain. The postage on the letter is greater than the sales tax owed on that book. How many years is it going to take them to write a software program to process all this data?

      Hmmm. Small business is screwed because it is too costly to comply. The Colorado resident has lost their privacy. The Colorado government has to spend millions if not billions to process the data and enforce the new law.

      How does anyone benefit?

      I really hate how people in support of the bill speak badly of Amazon. They aren’t the only ones who will shut down affiliate programs. I think it was a brilliant move by them and helped bring attention to the issues.

  2. Julie says:

    Thanks for this post. I sent an email myself to the Governor much along these lines. I doubt it gets read or anything is done. Oh well, I guess. I will use affiliates elsewhere.

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