I awoke this morning to find my Amazon Affiliates account terminated.
For anyone who does affiliate marketing or benefits from online ads, this can be a terrifying alert. You’ve spent years building up an online link network that is finally generating some income and you’re happy because after all that hard work, your family can finally eat. Then your account is terminated. It’s devastating.
The reason, this time, is perhaps the most infuriating. I hadn’t violated the terms of service or done anything wrong. What happened was the Louisiana state government had passed legislation that put undue burden on Amazon in collecting taxes and so, Amazon terminated all the affiliate accounts in the state. Just like that, years of hard work down the drain.
The Performance Marketing Association puts it this way:
Since 2008, there has been severe damage to small online businesses caused by ‘Affiliate Nexus Tax’ laws, also misleadingly known as ‘Amazon Tax’ laws. These unconstitutional laws have caused financial ruin to 90,000 affiliate marketers in the 13 states where the laws passed. These laws were passed to force Internet retailers to collect sales tax on behalf of the states that passed these laws, but in fact did nothing of the sort. In the end, states have not collected any additional sales tax revenue, and actually lost income tax revenue from the impacted affiliate marketers.
I moved to Louisiana last year to be close to family and it’s looking like the worst financial decision of my life. Not only do I maintain a full time job remotely in Texas, but all of my freelance business is from Texas as well. Louisiana has provided absolutely nothing in the way of economic opportunity and I actually took a 6% pay cut by moving here due to the state income tax. Now the state legislature just made it worse for me by taking away a stream of supplemental income.
Yes, I understand the need to balance the budget and generate income to cover bloated bureaucrats salaries, but increased taxes and regulation have immediate impact and will end up reducing taxable income and make it worse in the long run. Moreover, the “Amazon Tax” is unconstitutional and rejects federal precedence that found state can only tax companies with physical presence within the state.
As I mentioned in my plea to Governor Edwards to not make me regret moving to Louisiana that was mysteriously ignored, study after study shows that the freer any given economy is, the better quality of life is for people within the economy:
and Americans are becoming more and more mobile, moving to states with lower taxes and better employment prospects:
Legislation like the Affiliate Nexus Tax law is only going to hurt Louisiana and the people who unwitting moved to such economically antagonistic environments.