As one of the 6,000 affiliate marketers living in the state of Georgia, I am about to lose a good chunk of income. The affiliate nexus tax issue is complex and involves big brands like Home Depot, WalMart and Amazon. But it boils down to people like me losing out on spending cash or struggling to pay the bills on time. You can read a story in the Atlanta Journal & Constitution that explains some of the issue and you can read more at the Performance Marketing Association site, but I’ll explain how this will affect me.
Gov. Nathan Deal (R) of Georgia, has said he does not want to wait for federal legislation to tax online sales. Merchants that have a real physical presence in Georgia (Home Depot) already have to pay state taxes for online sales and they are complaining that out of state online merchants have an unfair advantage. So they have devised a scheme to say companies like Amazon have a presence because of ME and other affiliates. Do you see the book ad to the right of this story? That is an Amazon affiliate link. If you click that link and buy Attention, This Book Will Make You Money by my friend Jim Kukral, I will earn a commission. Regardless of where the product is shipped from or shipped to, Gov. Deal wants Amazon to pay taxes on that sale by saying I am the “nexus” between Amazon and the state of Georgia.
The fact is, if this becomes law in Georgia, Amazon and all the big affiliate programs will terminate their relationship with me immediately. Online merchants do not want to provide 50 different solutions to collect taxes from various states through affiliate reports. They will provide one if it becomes federal law. But to ask them to collect taxes 50 different ways is unreasonable and some say unconstitutional. They will not do it, therefore they will cut their losses and avoid the alleged nexus.
What do I use my affiliate commissions for? Here is a list of the small businesses in Georgia that will suffer if I lose my commission checks:
- I buy comic books every Wednesday from Dr. No’s Comics in Marietta
- I buy vintage records from Mojo Vinyl in Roswell
- My family eats out at places like Chili’s at Northpoint or BB’s Bronx Bagels in Alpharetta
- I buy the Sunday newspapers from the BP station on Haynes Bridge
- We go to the movies at Studio Movie Grill
- We “used to” spend money at Home Depot to improve our garden in the backyard
- This past weekend, we took the kids to the ballet at Cobb Energy Center
This is my spending cash and it’s about to be taken away. What about the other 5,999 affiliate marketers in the state? Will some of them lose more than spending cash? Will they pay less in state income taxes when they lose a significant portion of their income? Has this been factored into the equations by the state? I hope my fellow affiliates and colleagues speak up before its too late. I need those affiliates to post their own stories about how this law will affect them and their families.
This whole upcoming war is all for show. The Governor is flawed in his thinking that this effort will result in a boost of uncollected sales tax. This is just a way to cater to lobbyists for Georgia companies like Home Depot that have a physical nexus and are forced to pay taxes in this state. Is it unfair that brick and mortar Georgia companies have to pay states taxes and Amazon doesn’t? Yes, but only the federal legislation will make it an even playing field. Until then, it’s the small businesses and affiliates like me that will be screwed.
The net result would be:
Georgia losing state income taxes
Home Depot feeling vindicated that Amazon isn’t making as much money
My family not enjoying some of the extras
Small businesses suffering
Other affiliate families not paying bills on time
Gov. Deal gets to brag that he didn’t wait for the federal government
Contact your Georgia House Representative and Senator and tell them your story and how this bill will hurt you and your family. Let them know we will be the casualty in this war.
Update: Rep. Matt Ramsey submitted HB 993 and it was assigned to the Ways & Means Committee.
{ 20 comments… read them below or add one }
Ouch! Thanks for mentioning me in the post Greg. What will you do?
My state senator and the Senate Majority leader already know exactly where I stand on the issue. I need to make sure my House Rep knows and I need to motivate other affiliates to start sharing their stories.
Wow!! I'm amazed at the thought process being applied here. Thanx for the post Greg. Will do.
Roger, help me motivate the affiliates in the Atlanta area!
I am a full time Affiliate Marketer & I make a good income. I am a lifelong Georgia resident. I pay thousands of dollars every year in Georgia Income tax. I pay property taxes in Georgia. I spend the money I earn locally and pay sales tax. If this were to pass, I would be forced to relocate to another state. I'm sure if I did the math, the new income from taxing my sales (which is a fantasy anyway, the affiliates would drop me rather than collect taxes) would be a fraction of the amount I am currently contributing to the Georgia economy.
Suzanne, thanks for your comments. I hope it doesn't come down to you moving to Florida or Alabama but it wouldn't be unprecedented. Affiliates have packed up shop in other states such as Illinois and New York. I wouldn't move, I would just lose the income.
It would definitely be Florida – no income tax! If we were forced to move, we would also move our skin care business. Our products are currently manufactured by a small company here in South Georgia – which would mean even more revenue lost in our local economy.
For some reason, I don’t see those South Georgia politicians wanting good businesses like yours to move to Florida.
Ditto Jim! And thanks for mentioning Mojo Vinyl, but don't stop buying vintage vinyl. Once again the Governor is kowtowing to big business and large political factions, ignoring the small businessperson – like always.
Rand gets extra points for proper usage of the word kowtow.
For small stores in GA that do internet sales, will we be required to add a GA sales tax to people outside of the state?
You should already be paying state taxes.
We pay collect sales tax for people here, not for interstate sales where we send items out of the state.
Do you have an affiliate program?
No. I own a local retail store and have a website people can buy through.
Is Deal trying to collect from Georgians who shop online with stores without a "store" here ?
No. I own a local retail store and have a website people can buy through.
Florida is considering the tax as well so beware where you choose to relocate to
Question: why do you think your business or Amazon should be exempt from the burden that other businesses in this state have to bear? (collecting and remitting taxes) Either everyone should collect and remit sales taxes, or no one should. You yourself admitted it's not fair otherwise. And this whole "burden of collection for 50 states" thing is not a burden at all in the Internet computer age. Amazon actually provides that service for clients in states where Amazon is already forced to collect. If you have a problem here, it is with Amazon, which seems to think it can play by it's own set of rules (not collecting taxes it's competitors must), and then scare you into being it's bad guy at the General Assembly by terrorizing you with a threat to fire you if you don't go lobby and protect Amazon's privileged status.
I am not a nexus. I am not a physical presence for Amazon or any other online merchant. If Amazon fires me, hundreds of others of online merchants will fire me. I support federal legislation to make it an even playing field.
Amazon has fired my friends from other states like New York, Illinois and Arkansas. It's not a threat, it's a guarantee. I am not a fan of Amazon but I do earn income from them. They are influential in the online world and others follow in their footsteps. But it's not always positive. I see your point, but until there is federal legislation, this is the way it is.
This isn't just about products being shipped into Georgia. This would apply to products bought through my links and shipped anywhere in the world. I do not agree that those products should be taxed just because I'm linked in the sales chain.
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