Lessons from North Carolina’s Affiliate Tax Fight – By Matt Enders

by FeedFront Staff on December 1, 2009

Over the years many events, technologies, and companies have changed the face of affiliate marketing. The current battle against the Affiliate Tax (Advertising Tax, Amazon Tax) is one of the most important events to happen in our young industry.

The Advertising Tax has the power to both reform and injure our entire industry. To date New York, Rhode Island, and North Carolina have all passed the tax. Other states have seen the damage these laws do to small businesses and have shot down similar legislation.

Being headquartered in North Carolina, mgecom took a leading role in the fight against the Advertising Tax. In this fight, we learned many things which could be of great value should you find yourself in a state considering the implementation of the Advertising Tax. My best advice is this:

– Start an online petition and gather as many signatures as possible. The volume of signatures is important, but more from your state equals more relevance to lawmakers.
– Gather short, personal stories from every affiliate you can reach whose business will be negatively impacted. Print and bind these, and hand deliver them to your legislators.
– Use Twitter to get the message out and gain new supporters. Create a hash tag (we used #ncaffiliatetax) and include it in every Twitter update you write.
– Talk to the Performance Marketing Alliance and leverage their experience, data, and reach.
– Utilize the enormous power and community of ABW (ABestWeb.com) and other affiliate marketing forums.
– Organize face to face meetings with anyone in your state who has an interest in seeing the law shot down. Use these meetings to plan your group strategy.
– Don’t wait to start the fight. Make yourself heard as soon as the legislation appears. Even better, be preemptive and start educating your legislators on our industry.
– Visit your legislators in person. Meeting with lawmakers from your county is very important, but talk to anyone who will listen, particularly if they are on your State Finance Committee.
– Call your legislators multiple times. Don’t settle for speaking to an aide.
– Be persistent.

In North Carolina, we were unfortunately fighting against the perception of “fairness” in the eyes of lawmakers.

Many were focused on ensuring that Amazon.com and local book retailers were both subject to the same taxes and removing what was seen as an unfair competitive advantage.

North Carolina being in a significant budget deficit certainly did not help our chances. To lawmakers, the Affiliate Tax seemed like a way to both close the budget gap and keep local retailers happy.

We found that personal stories from affiliates and getting legislators to see how the Affiliate Tax laws negatively affect small businesses and individuals was much more effective than speaking to them about their misconceptions of fairness and new tax revenue streams. In the end we lost the fight, but we did make headway with key legislators. Now, we will work towards repeal of the Affiliate Tax.

Matt Enders is the CEO and Founder of mgecom, inc., an Outsourced Affiliate Program Management firm.

Download the entire FeedFront issue 8 here – http://www.scribd.com/doc/20220412/FeedFront-Magazine-Issue-8
FeedFront issue 8 articles can be found here as well: http://feedfront.com/archives/article00date/2009/10

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