They Tax But Gather Not

The Boss had a piece on NC attempting to tax associate income in the State here. Well they passed the legislation and so Amazon is pulling out. They are ending their association with anyone who is a partner in NC. –

We are writing from the Amazon Associates Program to notify you that your Associates account has been closed as of June 26, 2009. This is a direct result of the unconstitutional tax collection scheme expected to be passed any day now by the North Carolina state legislature (the General Assembly) and signed by the governor. As a result, we will no longer pay any referral fees for customers referred to Amazon.com or Endless.com after June 26. We were forced to take this unfortunate action in anticipation of actual enactment because of uncertainties surrounding the legislation’s effective date.

Please be assured that all qualifying referral fees earned prior to June 26, 2009 will be processed and paid in full in accordance with our regular referral fee schedule. Based on your account closure date of June 26, 2009, any final payments will be paid by September 1, 2009.

In the event that North Carolina repeals this tax collection scheme, we would certainly be happy to re-open our Associates program to North Carolina residents.

The North Carolina General Assembly’s website is http://www.ncleg.net/, and additional information may be obtained from the Performance Marketing Alliance at http://www.performancemarketingalliance.com/.

We have enjoyed working with you and other North Carolina-based participants in the Amazon Associates Program, and wish you all the best in your future.

Best Regards,
The Amazon Associates Team

I would not be surprised if Google follows suit. Were I a online merchant that was making serious money from the affiliates program I would move. Not me, my servers and my business address. Say Texas or South Dakota. Open up a bank account there and contract with a mail forwarding service. (Talk to any full time RV’er they will fill you in.) Be back in business in a week.

But it does not solve the core problem. The NC legislature does not understand the Internet. It is not like a physical business presence. Mobility is almost second nature on the internet. And of course even if NC tried to go after Amazon proper, Amazon could just say — “hold on a second.” Few taps of the keyboard and they could be servicing NC clients from Ireland where they have Cloudfront data centers. “Tax what?”, says the datacenter manager.

Linky.