As I wrote about last week, the State of North Carolina recently enacted new legislation that will (and already has had) a dramatic impact on the tax regulation and classification of online merchants and re-sellers. This has raised alarms not only with online merchants such as Amazon, but it is quickly having a dramatic impact on the affiliate programs that such companies run. As well as companies like Linkshare and Commission Junction that act as a gateway between merchants, affiliate partners and consumers.
A few days ago, Amazon terminated all North Carolina members of their popular affiliate program. And now it has come to my attention that effective July 9, Cafe Press will be also be terminating their North Carolina affiliate members due to the new law.
From Cafe Press:
As you may know, the State of North Carolina recently enacted new legislation that addresses tax registration, collection and remittance, which challenges the CafePress affiliate business model.
Due to mounting uncertainly over these new laws we will no longer be able to support affiliates residing in the State of North Carolina, effective July 8, 2009.
While CafePress has no tax nexus in any states other than California, Nevada and Kentucky we feel it wise to discontinue our affiliate business in North Carolina at this time.
Regrettably, our hand was forced into making this difficult business decision, and we openly acknowledge the loss of income this means for our North Carolina affiliate partners. Should circumstances around this law change we will eagerly reconsider this decision.
Effective July 8, 2009 CafePress affiliate agreements with all North Carolina residents will be terminated.
This is no joke and judging by the forums, such as those on Amazon, is likely to spread, as more and more merchants and affiliate companies are contemplating terminating their NC members. Which, of course is just going to cause some people, especially the professional affiliate members that actually sell enough to make an independent living, to leave the state and take their businesses and therefore, their taxable revenue along with them.
How large are these programs in any given state? This map should help illustrate that…
Merchant affiliate programs have proven to be a very easy, effective and profitable way for small companies, bloggers and individuals to make money, sometimes a lot of money, as well as helping merchants of all sizes and product genres to sell their merchandise and brand themsevles. Now, with the NC Legislature following Obama’s and the Democrat’s Stalinist/East German economic model that seeks tyrannical control over every aspect of the (soon to be formerly) free market, it appears that many people will lose tremendous amounts of income and revenue due to the ideological coup that took place last November.
Hope and change, alright.
Spit.