Online retailer Amazon.com today informed its Connecticut affiliates that it is terminating their relationship, effective immediately. The contract terminations are the result of a new law that requires online retailers to collect tax from sales referred by Connecticut websites.
“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,” the company wrote in an email this morning.
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Hello from Amazon
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 http://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.
Regards,
The Amazon Associates Team
Just to ad a little REALITY here. Most of the THOUSANDS of associates in Connecticut got less than $100 a year from Amazon, based on the experience that we have had at CtWatchdog.com. I don’t think we even got $20 for the several months we were associates last year.
But it’s not just Amazon. what about all the SMALLER companies that have affiliate programs that are PAY PER SALE? If Amazon can’t afford it neither can they. ALL my affiliates are pay-per-sale and yes I make money on them. AND my fellow bloggers DO make good money on the pay per click ones. Some up to half their income. Affiliate marketing can be lucrative if you know how to place the links to their best advantage. Bloggers have worked hard to earn money this way. It isn’t right.
I’m an Amazon Affiliate. Don’t make much money from it, but it still stinks. Small web publishers like myself need every dime we can get!
I agree. I wasn’t make much money with Amazon… yet. But until this morning, I had a number of products ramping up to take advantage of the Amazon Associate program. Now I’m stuck with a couple of domains and half-finished sites with no purpose.
I have posted this to my blog, contacted an AP reporter about it, etc. This is NOT the only company severing ties due to this insane part of this budget. I have had 3 of my affiliate contracts severed.
And the amount of money made is irrelevant people, whatever happened to principals and lawfulness??? Shouldn’t that be our focus, not the fact that you did or didn’t make a lot of money.
I agree with George and others, the payouts on affiliate programs are not very lucrative given they are click based. I brought in a little over $400 last year due largely to the fact I link to expensive electronics that I review. I’d imagine the high traffic sites do better than that, but this will likely not leave a gaping hole in the economy.
on the flip side, for SOME bloggers this is about 1/2 their income and some are making $75-100 PER WEEK so they WILL be taking a hit. But beyond what people make whether it’s $1 or $1,000 – the POINT is that Malloy just pushed through something that is ILLEGAL and violates our rights consitutionally!!!
@Lon – NONE of my affiliates are click based – they are % per purchase based and I have made money off that MUCH more than click based so… for MY personal economy it DOES leave a gaping hole, thank you very much!!
Julie,
The ads are per-click. If people don’t click the banner or link on your site you don’t get the commission. Impression based ads are much more effective revenue generators.
@Lon, yes I know some ads are per-click. There are different kinds of affiliate programs, but all will have to pay CT sales tax on any sales.
MY affiliates on MY blog are all per-sale affiliates, not per-click. These affiliates will still have to pay CT sales tax on any sales referred via my blog even though they are out-of-state-businesses and the purchasers are usually out-of-state. This is the problem. And since I have a very niche topic/blog, I actually made money this way… now I will not. 🙁
I still maintain, it doesn’t really matter – per click or per sale – this is an infringement of rights to pass this kind of law.
Breaking news!
Mother nature decides to remove all the air from Connecticut as Malloy imposes tax on the air we breathe.
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June 14, 2011 at 6:55 am I made a little over $1,200 per year with the Amazon affiliate program. I run a classical music information site. What my viewers used to do was simply go to my site, click my Amazon link and then buy anything they were shopping for. They did this because I told them that by doing so, they would be supporting my site. So this form of donation is now gone. Gone also is the income and the income tax the state used to receive from me for this activity. Now, since Amazon has stopped the affiliates program, there is no related sales tax for the state to collect. So, instead of raising revenue, this ridiculouis law is losing the state money. No sales tax since the affiliates program is gone and reduced income tax since the law took the taxable income away from thousands of people in CT.