Affiliate Marketing News: Amazon Backs Sales Tax Reform
After a challenging 2011 for the Amazon Associates Program, which was shutdown in California in response to the state’s demand for an e-commerce tax, it appears the Seattle-based company is going on the offensive by advocating for national sales tax reform.
Amazon has said they’re strongly supporting a proposed federal law that would force online retailers to collect local taxes on more of their sales.
This would end a longtime loophole in U.S. tax policy that was originally meant to help catalog retailers.
The National Retail Federation, which represents many brick-and-mortar retailers, and which has battled with Amazon on the sales tax issue, is also on board with the bipartisan Senate proposal.
Now you’re probably wondering how Amazon’s willingness to collect sales tax is going to help your affiliate business. That’s a good question to ask.
In the past, Amazon has gone to extreme lengths to avoid collecting sales taxes, insisting that its shipping centers and affiliates are different companies. And as they did in California, they’ve even shut down their affiliate program when state lawmakers pass “Amazon tax” bills.
This has created a significant amount of turmoil for affiliate marketers. Simply putting an end to this turmoil, or even the threat of turmoil, will significantly improve this situation for affiliates.
The challenge for Amazon is that it currently has to deal with a mish mash of different state rules. As an alternative, it supports something called the Streamlined Sales Tax project, in which states agree to a common set of sales tax definition and practices. The agreement on a group of common standards is important because each state taxes things differently—sometimes wildly so.
The Senate bill, which has bipartisan support, would use the Streamlined Sales Tax program as a centerpiece of any national tax system for online sales.
And that’s good news for affiliates. If you currently sell Amazon products, you might be currently looking over your shoulder, wondering when your cash-strapped state legislature or city government is going to go after the coffers of the e-commerce business. And if you’re not, you should be.
Putting an end to this struggle is the best thing Amazon can do for its business and its affiliates. All of us can get back to our real business: creating great content, generating traffic, building lists, and finding terrific affiliate programs to promote.
The only downside to this agreement is that collecting sales tax will mean that some online retailers will become slightly less price competitive against brick-and-mortar shops. However, in the race against online vs. brick-and-mortar, it’s pretty clear who’s winning. If it’s not clear to you, just go check out that empty Circuit City store at your local mall, and ask someone there how long it’s been empty.