Amazon Plays Chicken with Connecticut over Bill HB 5481.

Despite a storm hammering the Northeast affiliates were able to get their voices heard regarding Connecticut HB 5481. According to Affiliate Advocacy the Finance Committee also heard testimony from several business organizations urging them to drop the bill entirely. It was argued that the taxes brought in would not outweigh the human consequences, like the job loss.

Depending on what the results from of the Finance Committee vote on HB 5481 is the bill may go back to the General Assembly for a full vote. This bill is exactly the same as last year’s bill (SB 806) and similar to other so-called Amazon Tax initiatives.

On Monday Amazon threatened to terminate all of their Connecticut affiliates, and is again showing that they have no qualms about using affiliates as pawns. Paul Misener, Amazon’s Vice President for Global Public Policy, said in testimony submitted to the Finance, Revenue and Bonding Committee:

“If Connecticut were to enact RB 5481, Amazon and presumably dozens of other out-of-state retailers would simply sever affiliate advertising relationships with Connecticut residents.”

Such a stance is a tactic Amazon has used in other states before with mixed success and is not one we, here at ReveNews, endorse.

Keith Phaneuf of Connecticut’s The Mirror writes “Both Rep. Cameron C. Staples, D-New Haven, the House chairman of the finance committee, and Rep. Vincent J. Candelora of North Branford, ranking House Republican on the panel, said state government is trying to walk a fine line. It can’t ignore a major portion of its sales tax stream that has moved online, but officials don’t want to harm businesses amid a slumping economy.”

Connecticut residents are required by law to pay the sales tax on goods purchased tax-free either out-of-state or online. Those obligations, known as the “use tax,” are supposed to be reported on annual state income tax returns.

But officials concede many residents do not pay the use tax. The $13.4 million in use tax paid last year by Connecticut income tax filers represented less than one-half of 1 percent of all sales tax revenue.

At risk of being terminated, by Amazon alone, if the bill is enacted are 70 percent of the 2,800 affiliates in Connecticut. Often other advertisers follow suit. Those are jobs that could be saved in this difficult economy and business taxes Connecticut will lose out on if the affiliate companies go under. Playing chicken with affiliate business does nothing to benefit the state since no tax revenue will be collected as merchants will simply switch to other marketing channels.

If you are a Connecticut affiliate, we urge you to speak out against HB 5481, to prevent more jobs from being lost. Both Affiliate Advocacy and  the Performance Marketing Association have resources that can help.

3 Responses to Amazon Plays Chicken with Connecticut over Bill HB 5481.

  1. Amazon said "cut the bull-crap. lets just get rid of 'em and go back to business as usual. We don't have time for this."

    They didn't really say this but you know that's what they were thinking.

  2. Connecticut Affiliates need to take action now, this morning. As many of you that possibly can before 2pm Thursday 3/25. On Wednesday 6 of us CT affiliates joined a lobbyist and the PMA to shake hands and talk with legislators as they debate SB 5481 or as they like to call it the Amazon Tax Bill. The 6 of us felt like we made some legislators rethink this bill. The session was delayed until Thursday and possibly will keep getting delayed so don't stop now, get involved.

    In a state with over 2,800 affilates why are we just 6? You must and can still get involved. Just because you don't work with Amazon doesn't mean it won't impact you. The bill reads as…

    "…whether by a link on an Internet web site or otherwise…retailer shall be presumed to be soliciting business through such independent contractor…"

    That's your Advertiser and you the Publisher.

    PMA Connecticut Advertising Tax Group
    http://groups.google.com/group/pma-ct/web/email-t

    Tell every CT affiliate you know to step up and voice their opposition to SB 5481 now. Other states learn from this and get involved. We are high tech JOBS. Don't let local retailer book store jobs be saved as they think it will, it wont, while you stand by and lose your high tech job.

  3. […] Connecticut considered a similar bill in 2010 that didn’t pass. Much of the resistance to the bill came from Amazon.com, who threatened to end its affiliate program in Connecticut if the bill passed. […]