So I have to write a blog post, and I decided to make it easy (since it’s Friday) and give an update on the North Carolina affiliate tax woes.
To catch everyone up, North Carolina is proposing a Nexus Tax, similar to the one passed in New York last year. This law states that online retailers must collect and report sales tax on any sales made to residents and such in the state of North Carolina, but only IF these retailers have affiliate marketers located in North Carolina. The affiliate marketers are considered a physical extension of the retailer, giving the retailer a physical presence in the state, which forces them to collect sales tax.
From what I’m gathering, the tax portion of the budget has been the biggest problem with the budget being passed. Governor Perdue has insisted she will veto the tax section as a whole if it includes certain items. She does not have the ability to veto specific lines in the tax section, just the whole thing.
So here presents a problem. Several outlets have spoken with Governor Perdue, and it’s become very evident that she doesn’t understand what the Nexus Tax even means. With that being said, it’d be no shock if she just pushed that tax law through.
The proponents of this tax law are equally disillusioned. Their battle cry now is equality for brick and mortar businesses. They believe the sales tax will create a level playing field, make things fair, take away the advantage of selling online. What they refuse to see is that people don’t shop online because of the lack of sales tax. In fact, out of everyone I know, I can’t name a single person who would even factor sales tax into the equation of whether to buy online or to buy at a store. The sole reason people go online is to get better deals and the sheer convenience of not having to leave the house! I can be sitting at home, order a book from California, and never have to put on pants or leave the house!
For affiliates, this has been a nightmare. July 1st was when the budget was supposed to be passed. June 28th, Amazon removed all NC affiliates. The budget was pushed back to July 15th. But that didn’t stop the publishers. They took initiative and systematically removed their NC affiliates. Now it’s July 25th, and the budget still isn’t passed. The tax section, which includes the Nexus tax, isn’t agreed upon. In fact, it’s been leaked that they’re going to start from scratch and redo the tax section. Whether this new version will include the Nexus tax or now remains to be seen. So we’ll see what happens.
In the meantime, 7even Leaf Clover isn’t sitting idly back awaiting our fate. We’ve already formed PA businesses to operate under. We’ve visited PA to look at houses and apartments, and we’re making plans on relocating if this passes. It sucks to think about, our fate is in the hands of ignorant lawmakers who refuse to listen to the industry, simply keep their blinders on and stick to their old ways, still believing they’re smarter and better than the rest of us.
Yup, I’m angry. And we’re still fighting. If this is about equality, if this is about being fair, then why are affiliates the only people being affected? Why are they losing their jobs, their businesses, being forced to move out of the state? How is this even close to being fair?
