Amazon Associates affiliate program terminated in California
Earlier today, Amazon.com sent an email to all California residents who participate in its affiliate program, known as Amazon Associates. The letter notifies approximately 25,000 of Amazon’s California affiliates of the impending termination of their affiliate contracts by Amazon.
This move by Amazon is in response to legislation in California, signed into law by Governor Jerry Brown today, that will force online retailers such as Amazon to collect state sales tax if they have affiliates in the state. Amazon is strongly opposed to this legislation.
On the other hand, the State of California expects to receive up to $200 million in additional revenue per year and sees this legislation as a necessary move to close their budget gap.
This move by Amazon was widely expected by affiliate industry observers and Amazon’s California affiliates. When other states such as Connecticut, Illinois, North Carolina, Arkansas and Rhode Island passed affiliate taxes in recent years, Amazon terminated the Associates program in those states.
The only state with an affiliate tax where Amazon still operates its Associates program is New York, where Amazon is in the middle of a lawsuit against the state.
According to Amazon’s email, the affiliate contracts will be terminated as of the effective date of the legislation.
Here is an excerpt from the email:
For well over a decade, the Amazon Associates Program has worked with thousands of California residents. Unfortunately, a potential new law that may be signed by Governor Brown compels us to terminate this program for California-based participants. It specifically imposes the collection of taxes from consumers on sales by online retailers – including but not limited to those referred by California-based marketing affiliates like you – even if those retailers have no physical presence in the state.
We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, 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, we will terminate contracts with all California residents that are participants in the Amazon Associates Program as of the date (if any) that the California law becomes effective.
Stay tuned to the AffiliatePrograms.com blog for more updates on this story.
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So it is the big box companies that dont want us to sell their stuff on line cause they are greedy, and the politicians that give away welfare checks to the lazy that get paid by these giant greedy company.
So now what collect an unemployment check…
Makes no sense at all
I was an Amazon Associate in California until they terminated their CA contracts. The thing is, I have a balance owed that is less than the minimum required for disbursement. Upon termination of my contract, Amazon said they will disburse balances in accordance with the terms of the contract (you know, the one they terminated…). Yet with no opportunity to earn further referral fees, my money is in limbo. I contacted Amazon but have yet to hear back. No doubt, there are a *lot* of people in the same situation. Hopefully they’ll pay out what is owed. Otherwise, I foresee a class action against Amazon.
Michael,
If I were you and I was committed to working with Amazon, I would move my company to a legal address in a state where Amazon has not done away with the Associates program.
A lot of affiliates are going to give up after this situation. That’s going to be good news for those affiliates who stay.
I’m not a lawyer, so you’ll want to check with yours before doing any of this.
P
How do we get paid? Since my balance is below the minimum, will I get a check from Amazon?
You’ll have to check with Amazon. I would think they might make an exception to their terms of service in this situation, but one can never be sure.
This happened in Colorado a few years back, as well. Very sad for those of us who are doing our best to earn what we can. I participate on a few sites where I was able to bring in some money from Amazon. I was in the same situation, as many, where I was under the payout limit. I don’t think I ever received the money that was owed to me.
Finally this communication from Amazon:
“Any and all remaining advertising fees will be sent in the form of a direct deposit 60 days following the end of the closure month, in late August. “
That’s good news. So are you giving up on Amazon? Would you consider moving your business address to another state?
Jeff,
I never made remotely enough from Amazon for relocation to be worthwhile.
-Michael
Dumbass liberal state! Don’t they see that what they are doing? Un fricking believable!!!
I don’t think it’s just the liberals to blame. Both parties conspired on this one.
I’m extremely disappointed in Amazon. What they forget is that those 25,000 affiliates that they discarded at the drop of a hat were also Amazon customers. Actually, super customers. Because they had a greater familiarity with Amazon products, they bought more products.
When it comes to customers, then, Amazon has a bad case of mission statement halitosis: “Start with the customer and work backward? Earth’s most customer-centric company?” Not for Amazon’s former California super customers…
Note to Jeff Bezos: The simple math of why it pays to pay attention to how you treat your customers: A satisfied customer will tell 3 other persons about how good your service was. But a dissatisfied customer will tell 11 others about his or her experience. Thus, for every dissatisfied customer you lose, you have to gain four satisfied customers just to barely stay even!
Bye, bye Jeff.
I’m also disappointed in Amazon’s response to affiliates. Because it’s obvious they have planned on fighting this all along, they should have told that to affiliates when they sent the letter canceling their accounts.
The best advice at this point in time is to seek out another affiliate program. Complaining will do little to nothing to improve the situation. There are many in existence that will compliment and/or replace amazon affiliates.
You’re right, there are lots of other programs. The challenge is that none of them have the selection or brand awareness of Amazon.
From the article:
“On the other hand, the State of California expects to receive up to $200 million in additional revenue per year and sees this legislation as a necessary move to close their budget gap.”
Except they wont get the tax revenue because the major affiliate companies just cancelled their contracts with California affiliates. So they not only don’t get what they say they were after, but they also lose the income tax on affiliate earnings, sales tax from when the earnings are spent, and property tax from affiliates who will pick up and move out of state.
This law had far less to do with online sales tax revenue, and far more to do with big box stores like Best Buy, buying out the politicians to slightly decrease online competition.
There are many different conspiracy theories you could throw at this, and they all have legitimacy. The big boxes just can’t keep up, and they’re going to take this battle to all the states.
While it does seem that Amazon is willing to put up a fight, it doesn’t seem they’re looking out for the interests of affiliates.