What Will Happen to Affiliate Marketing in CT ?

Raise your hand if you enjoy blogging, but also like having the potential to make some cash with your blog. Okay, ummm….just about everyone, right? Same here!

I received an email from Amazon today that just makes me SO stinking angry.

For well over a decade, the Amazon Associates Program has worked with thousands of Connecticut residents. Unfortunately, the budget signed by Governor Malloy contains a sales tax provision that compels us to terminate this program for Connecticut-based participants effective immediately. It specifically imposes the collection of taxes from consumers on sales by online retailers – including but not limited to those referred by Connecticut-based affiliates like you – even if those retailers have no physical presence in the state.

We opposed this new tax law because it is unconstitutional and counterproductive. It was supported by big-box retailers, most of which are based outside Connecticut, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.

As a result of the new law, contracts with all Connecticut residents participating in the Amazon Associates Program will be terminated today, June 10, 2011. Those Connecticut residents will no longer receive advertising fees for sales referred to Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com. Please be assured that all qualifying advertising fees earned on or before today, June 10, 2011, will be processed and paid in full in accordance with the regular payment schedule.

You are receiving this email because our records indicate that you are a resident of Connecticut. If you are not currently a resident of Connecticut, or if you are relocating to another state in the near future, you can manage the details of your Associates account here. And if you relocate to another state after June 10, 2011, please contact us for reinstatement into the Amazon Associates Program.

To avoid confusion, we would like to clarify that this development will only impact our ability to offer the Associates Program to Connecticut residents and will not affect their ability to purchase from www.amazon.com.

We have enjoyed working with you and other Connecticut-based participants in the Amazon Associates Program and, if this situation is rectified, would very much welcome the opportunity to re-open our Associates Program to Connecticut residents.


The Amazon Associates Team

I made the important parts bold in case you’re a skimmer like me. =)

So here’s what it breaks down to:

I have (had) a lovely Amazon affiliate account. When you, my friend, ordered something through my link (thanks!), I would receive a small “thank you” commission from Amazon for helping to spread the word about their awesomeness. (And they ARE awesome!)

This small commission doesn’t add any cost to the consumer in any way.

With Governor Malloy’s wonderful new plan (#sarcasm), because I am a website owner that resides in CT, anybody anywhere ordering through my affiliate link would have to pay CT sales tax — even though neither they nor the store that they’re buying from reside in CT.

As a result, places like Amazon, Fabric.com, etc have to terminate associate agreements with CT residents.   I especially like how Amazon says that it’s unconstitutional.  FABULOUS.

So do I have to charge sales tax if I sell ebooks?  Or website services?  Does this affect every single affiliate program – including selling other people’s ebooks?

Anyone else think this is totally ridiculous?

I’ve never written to the governor, or a Congressman or a Selectman….is that the next step?  (If you have suggestions I’m all ears!)

Anyone want to join me in fighting to get this crazy law revoked?

{Photo Credit: starush}