Just got this e-mail from Amazon, terminating my Associates account - effective immediately. No warning at all.
A few stats: in the five years I've been an Associate, I've generated hundreds of thousands of dollars in sales for Amazon. (Tried to get an exact number, but my Associates account is closed, and historical data isn't working properly.) My referral commissions are typically $500-600 a month, with seasonal spikes as large as $1,200.
This is a good lesson in counterparty risk - if my business was based primarily on Amazon Associates, I'd be totally screwed.
Here's the full text of the e-mail:
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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.
Wouldn't it therefore make sense to have a PO Box in another state, then set yourself up again with Amazon? You are close to either Kansas, New Mexico, or Wyoming, depending on where you are in CO...
I already have an account with Earth Class Mail (handy if you don't want to give people your home address if you work from home), so I set up an official business address in Beaverton, Oregon and changed my address via the Associates website.
Oregon doesn't have a sales tax, and I'm paying Colorado income tax on anything I receive, so this should fix the issue while staying on the right side of all applicable laws. Will update if/when I get a response from Amazon regarding my request to reinstate my account.
My account has been reinstated. Looks like I may have to incorporate an LLC in Oregon, but that's easy to do.
Here's the e-mail I received from Amazon:
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I confirmed that your contact and payee addresses have been updated. Because you have changed your state of residence, your account has been reinstated. However, we want to be sure you are aware that you may be asked to provide proof of residency at your new address. If this is the case, we will contact you with instructions on what documentation to provide and the submission process for this documentation.
Thank you for your participation in the Associates Program.
A few stats: in the five years I've been an Associate, I've generated hundreds of thousands of dollars in sales for Amazon. (Tried to get an exact number, but my Associates account is closed, and historical data isn't working properly.) My referral commissions are typically $500-600 a month, with seasonal spikes as large as $1,200.
This is a good lesson in counterparty risk - if my business was based primarily on Amazon Associates, I'd be totally screwed.
Here's the full text of the e-mail:
====================================
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