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Minnesota Affiliates Where Are You?

Written by FlamingoGirl on April 16th, 2009

Perhaps you’ve heard about anti-affiliate state legislation that can have a devastating impact on affiliate marketers.
This has occurred in several states, and now it is being battled in Minnesota.

Today I attended the Senate Hearing regarding Bill S.F. 282, at the Minnesota State Capitol. According to sources, there are about 2500 affiliates in Minnesota yet I was the only one in attendance.

The basic premise of S.F. No. 282 is flawed and incorrectly targets affiliates.
Affiliate marketers are not traditional associates or an extended sales force for these retailers.
Rather, we are paid for performance marketing advertising. Affiliate marketers do not sell for the retailer – affiliate marketers advertise. We do not own the customer or know who the customer is; we do not transact a sale; we do not accept money for sales; nor do we deliver products or services to consumers. S.F. No. 282, Minnesota is attempting to define affiliates as a physical sales presence for out-of-state merchants such as Amazon or Overstock.com, so that out-of-state merchants would be responsible for collecting sales tax from all residents in Minnesota.

Many merchants have stated their intention to sever their ties with Minnesota affiliates if this bill is passed. So instead of gained tax dollars, the state will end up with more people out of work, more families devastated and in need of aid. If merchants sever affiliate programs in Minnesota, the state will not gain tax dollars, and many businesses will be devastated as a result.

The hearings ran long and they ended up postponing the hearing until Monday the 20th of April.

The Author of the bill, Senator Thomas M. Bakk is also the committee chair. He is a democrat.
Democrats have the majority in the house and senate. Unless we take drastic measures this bill will pass.

According to paperwork, the state isn’t expecting that much revenue from this bill.
We need to make it clear that while this may seem like an easy way to increase state tax revenue
they need to consider the devastating ramifications this bill can have.

Email your senators.
Use this Minnesota Senator Letter Template as a guide.
Email the newspapers.
The Star Tribune is a good place to start.
Do something, do anything!

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This entry was posted on Thursday, April 16th, 2009 at 3:23 pm and is filed under Cyber News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Cyber News
  • I just stopped over at the Revenews booth at Gnomedex and got schooled!

    Had no idea that affiliate programs were causing so much juicy controversy! Learned the story of Connie who runs FlamingoWorld who opposed a bill in Minnesota that would tax sales generated by affiliate marketers as if they were directly selling or drop shipping inventory.

    Let's imagine the following scenario to see why Connie opposed the bill (NOTE: I am not a lawyer)
    - You need your taxes done
    - You're going to hire someone to do it
    - Accountants in your state must charge sales tax for their services

    You liked the work of the accountant so you told a few people. Next time you go into your accountant, they mention four people had their taxes done because of your good words (aka referrals). They want to give you a break on your taxes to say thank you. You accept.

    Should now be responsible for paying taxes as if you had done the tax returns for those four people?

    Heck no!

    In this case, you've accepted payment in the form of a gift or discount. This isn't the same as doing the actual taxes of the people you referred and potentially owing tax.

    Thank you Connie for standing up for us in Minnesota!
  • couponicodes
    Thanks, for the info.
  • Scott
    It doesn't matter what you say, how many letters are written, they do not get what affiliation is and only care about getting more tax revenue. They don't understand that online merchants will just terminate all Minnesota affiliations and get nothing. Your government elected officials only care about raising money for the next election, collecting their high pay, lifetime full salary pensions and health care, while the rest of us get pummeled into poverty.
  • The last draft of the Senate Omnibus tax bill, I found https://www.revisor.leg.state.mn.us/bin/bldbill.php?bill=S2074.1.html&session=ls86 has it, beginning on line 54.18.

    I also see it in the House version https://www.revisor.leg.state.mn.us/bin/bldbill.php?bill=H2323.2.html&session=ls86 beginning on line 176.1.
  • when I looked on Monday it was not in the omnibus tax bill. I was out of state for a few days and am just catching up. Ugh.
  • It was not rolled into the main tax bill which was voted on on Wednesday the 22nd of April. I am trying to find out the status but know for sure it will be voted on by the 18th of May when they go on break.
  • Are you sure? According to NYAffiliateVoice at http://nyaffiliatevoice.com/2009/04/another-minnesota-update/ it was rolled into House of Representatives version. What is being voted on, on May 18th? The main bill without this legislation or a separate bill that contains it?
  • I was talking the senate version, May 18th is just the deadline for any action as the senate goes on break.
  • Just heard about this today (April 24th) and have written my State Reps. Can someone provide an update as to where this legislation sits right now? I hear that it was rolled into the main tax bill. Sounds like it's making some progress...
  • I actually attended the hearing on Thursday too, and wrote to my Senator last week. The majority of my income comes from affiliate marketing, so like others, I am quite worried about being put out of business if this bill is passed.
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