More States Forcing Amazon Tax Laws Killing Affiliate Marketing?

Online affiliate marketing used to be a lot easier, Google Adwords had their shot - limiting affiliate listings - and now a growing number of states in the US are implementing taxation policies that are driving out many major vendors that use affiliate marketing.

The policy started last year, most notably in New York, and as Kevin Lee points out has implications way beyond just the obvious affiliates.

On Friday, Rhode Island issued notices to over 100 online businesses that they require states sales tax to be collected. Three major businesses - Amazon, Overstock and BlueNile - told their Rhode Island based affiliates that they would no longer be able to promote their products, the Providence Journal reported.

As was announced earlier in the week, Overstock had axed North Carolina, Rhode Island, California and Hawaii affiliates.

The Terminator aka the Governor of California Arnold Schwarzenegger joined Hawaii Governor Linda Lingle to veto these taxes. One wonders how well online marketers can use the web to get other politicians to change their minds about these taxes.

Clickz reported that some companies are appealing the laws in New York. If they are successful in one maybe they will be willing to go after the others.

About the author

Frank Watson has been involved with the Web since it started. For the past five years, he headed SEM for FXCM -- at one time one of the top 25 spenders with AdWords. He has worked with most of the major analytics companies and pioneered the ability to tie online marketing with offline conversion.

He has now started his own marketing agency, Kangamurra Media. This new venture will keep him busy when he is not editing the Search Engine Watch forums, blogging at a number of authoritative sites, and developing some interesting online community sites.

He was one of the first 100 AdWords Professionals, a Yahoo and Overture Ambassador, and a member or mod of many of the industry forums. He is also on the Click Quality Council and has worked hard to diminish click fraud.