Amazon logo (Photo: Amazon.com)
The North Carolina government has chased away Amazon.com in North Carolina with a proposed tax on the company’s commissions in the state. It is bad news for in-state Amazon affiliates who earn up to 15 percent commission on “click-through transactions” on their sites.
Affiliates put links to Amazon purchases on their web pages. If a visitor clicks and purchases the item then the affiliate will receive a commission.
Unfortunately the North Carolina legislature has sought to get their cut too through a tax, which has deterred the dot com giant from doing business in North Carolina. Amazon recently announced that it will end its commission program in the state because the legislature has been drafting up a plan to collect sales taxes on these transactions.
Amazon spokeswoman Patty Smith said: “We felt that we had to take this step and it’s unfortunate. But we feel like we have little choice.” Amazon believes the tax is unconstitutional and the program termination will prevent the company from having to collect 6.75 percent sales tax on purchases. Smith said: “The way the legislature is going about this is an unconstitutional tax collection and it’s not fair.”
Most affiliates only make a few hundred dollars a year but there are people like Kayla Fay who get the bulk of their income from marketing for Amazon and other vendors on their site. Kayla, who runs many sites--including a site which provides important information for parents with children who suffer from ADD—is concerned that the new tax will ruin her. Kayla said:”They’re killing me, they’re killing my business.”
Another North Carolina affiliate commented on the Greensboro News and Record website about his or her Amazon affiliation: “”It funds a good bit of our family’s bread and bitter. I’m a full time internet marketer. I have several websites with information about education and science that offer valuable and much sought after information to readers. The existence of my websites depends on income generated through Amazon.com. If the bill passes, the NC legislature will have effectively closed down my business. Not only will they not get the sales tax they hope to generate, but they will also lose out on the revenue from the income tax I pay each year.”
The tax is a small part of a grander plan to increase the budget for more government spending in North Carolina. Governor Beverly Purdue has claimed there is a $4.7 billion hole in the state budget. As a result, she has drafted a plan to increase state revenue instead of reducing state spending. Perdue and other state lawmakers hope to introduce new taxes and tax increases to raise about $785 million.
Amazon said it would reopen the program if the new law was not passed: “In the event that North Carolina repeals this tax collection scheme, we would certainly be happy to reopen our Associates program to North Carolina residents.”
The House and Senate are still working on writing the tax into law.
A petition to fight the proposed tax has been started here: www.petitionspot.com/petitions/ncaffiliatetax/
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Comments
Perdue is the mistake that will cost NC for a generation. At a time when tobacco is being punished, furniture and textiles have moved to China, and banking is in the toilet, democrats in the NC government are making a move to drive business away from the state. Unemployment isn't high enough yet, Bev?
Just wait. Why hasn't anyone started a recall on these dopes yet?
Blame who you want, but NC gov't spending needs to be cut, not revenues increased. Sure, NC Govt takes a 10% pay increase when times are good, but won't give it back when times are bad. As a NC small business owner, I need breaks and credits, not increased taxes on *my* business and *my* customers.
All of the democratic states are falling apart and are going bankrupt. Too bad, so sad. Move to my favorite place, Macon, GA.
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