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Internet Sales Tax - Killing Amazon Affiliates and Blogging?

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There are several ways to support a blog. Advertising is really a small portion of it, most rely on merchandise (t-shirts etc) or affiliate programs like the Amazon Affiliate program. In a nutshell you receive a portion of the sale for all sales which occur on Amazon which originate from a link on your blog. This can be a decent percentage of a blogs revenue.

North Caroline (along with a host of other states) is proposing to add sales tax to all sales which originate from NC affiliates. Amazon's response was

We regret to inform you that the North Carolina state legislature (the General Assembly) appears ready to enact an unconstitutional tax collection scheme that would leave little choice but to end its relationships with North Carolina-based Associates. You are receiving this e-mail because our records indicate that you are an Amazon Associate and resident of North Carolina.

From Amazon's perspective I doubt its a question of the money but rather the bureaucracy having to manage and collect differing sales tax rates for each portion of the country. Let along what will start happening when local municipalities decide they need a piece of that pie.

A more paranoid person would read this as an attack on blogging as a whole. Cutting affiliate funding out of the equation (especially the 800lbs gorilla which Amazon represents) will start killing blogs.

If you want to follow this story and the various states efforts to enact this legislation the best place to follow it is the Performance Marketing Blog