Affiliates and online sellers are the losers thanks to Louisiana’s attempt to pressure Amazon to collect its state sales tax on purchases made by Louisiana residents. Amazon sent a letter to affiliates in the state last month explaining it was ending its advertising relationship with them.
Not only will Amazon affiliates in the state lose out on ad revenue, but it means fewer websites sending traffic to the marketplace, thereby having the potential to somewhat negatively impact third-party merchants.
Other states have enacted so called “Amazon tax laws” as federal legislation such as the Marketplace Fairness Act and the Remote Transactions Parity Act have failed to pass. (Here’s an article about the differences between the two bills.)
“In addition, if at any time following your enrollment in the Program you become a resident of Arkansas, Louisiana, Maine, Missouri, Rhode Island, or Vermont, you will become ineligible to participate in the Program, and this Operating Agreement will automatically terminate, on the date you establish residency in that state.”
Here is the letter Amazon sent to members of the Associates Program in Louisiana last month:
Greetings from the Amazon Associates Program:
We’re writing to inform you that the Louisiana state legislature has passed, and Governor John Bel Edwards has signed, a bill to establish tax nexus and impose tax collection requirements, which is forcing Amazon.com to end its advertising relationships with all Louisiana-based associates. You are receiving this email because our records indicate that you are a resident of Louisiana. If our records are incorrect, please update the details of your Associates account here before March 25, 2016 to avoid termination.
Please note that this is not an immediate termination notice and you are still a valued participant in the Amazon Associates Program. However, if this bill is not repealed or overturned prior to going into effect April 1, we will no longer pay any advertising fees for sales referred to Amazon.com or its subsidiaries, and we will not be able to accept new applications for the Amazon Associates Program from Louisiana residents.
The unfortunate consequences of this legislation affecting Louisiana residents like you were explained to the Louisiana legislature, including Senate and House leadership, as well as to the governor’s staff.
Over a dozen other states have considered essentially identical legislation but have rejected these proposals largely because of the adverse impact on their states’ residents.
Should you feel the need to voice your opinion directly, Governor Edwards’ office may be reached here.
We thank you for being part of the Amazon Associates Program, and wish you continued success in the future.
The Amazon Associates Team
A Louisiana political blog delved into the issue, and a commenter there said the state would lose income tax on the affiliates as a result of the change.