Affiliate Tax Propaganda - Affiliates Continue to be the Human Shields

Well this tax issues continues to made news and most of the time it is misinformation and/or partial truths. 

Sadly this issue has continued to be branded as the Amazon Tax and as such has been positioned as a David and Goliath issue:  The Big Bad Online Only Retailer v. Mom and Pop America 

The problem is, this has nothing to do with Mom and Pop.   

In a recent issue of The Directors Letter, the following was written:

Goose and Gander  We recently wrote about Amazon's aggressive battle with various states to avoid collecting and paying sales tax. Amazon's technique is to eliminate relationships with local affiliates so that it can declare no presence in a specific state. In the latest development, competitors including Wal-Mart, Target and other large retailers have joined up to form the Alliance for Main Street Fairness. The Alliance is lobbying for legislative changes that would require Amazon to pay state sales tax.

Let’s analyze this a bit….

First this part:  “Amazon's technique is to eliminate relationships with local affiliates so that it can declare no presence in a specific state”

This isn’t just Amazon’s tactic.  Several online retailers have chosen this path.  What needs to be nailed down is that this isn’t just a tactic……doing this total absolves then from having to collect the sales tax that was the intent of these Bills.    

Here is how it works everywhere it has passed (except NY solely because of pending legislation)

1) Bill Passes

2) Nexus is created for Online Merchant

3) Affiliates Get Fired --- In many cases #3 actually precedes #1!

4) Online Retailer no longer has Nexus since it no longer has affiliates 

5) Online Retailer Collects $0 sales tax - no Nexus, no Sales Tax

6) Affiliate Loses Revenue

7) State collects less income tax from small business that have been financially hurt or put out business by passage of the Bill

This is pretty black and white….

Use Affilates to Create Nexus, Affilaites Fired, No Nexus created, Bill is useless............please tell me what I’m missing????

Second: “In the latest development, competitors including Wal-Mart, Target and other large retailers have joined up to form the Alliance for Main Street Fairness.”

So let me get this straight….The Big Box retailers that KILLED the Mom and Pop stores all across the country in the first place have now joined forces to create the Alliance for Main Street Fairness?   There is nothing Main Street about this fight.  A look at their website, which I will not link to, or course says nothing about Big Box Stores….it trots out a bunch of local business that have supposedly been hurt by the online retailers. 

For the record, I understand that sales tax issue.  It won’t be easy to solve, hopefully legislators will see it for what it is. 

It’s clear what this is.  It’s a fight between behemoths….Online Only versus The Click and Mortar.......

In the meantime,  it’s a shame that Affiliates continue to be the Human Shields in the war between Online Only Retailers and Big Box Retailers.