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A least 100 merchants will drop her as a result of the change to Minnesota law, and she’s been shifting her focus away from companies like that for the past year, anticipating that state law would change.
“It is going to hurt me a lot,” she said, “but I’ll just have to adjust.”
What bothers her is that online affiliate marketers have been singled out, even though Amazon can continue to advertise on television in Minnesota and retailers can still mail catalogs to Minnesotans.
“I agree with what they’re trying to do,” Arnold said. “It’s just that they’re singling out a specific format.”
Madigan said Amazon, a powerhouse website that gets much of its traffic without the help of links from affiliates, is among hundreds of companies that will terminate relationships with Minnesota affiliates as a result of the new law. But she said it’s not the most important.
“If it was just Amazon, we wouldn’t care if this passed or not,” Madigan said. “But it’s these thousand retailers that do the same thing, and that’s where we see this economic devastation to Minnesota businesses.”
In the past when states have done this, she said, a third of Web marketers moved out of state, a third downsized their business and a third closed their doors.
Amazon’s position on online sales tax is complicated. It doesn’t want to collect sales tax in any state where other online merchants without affiliates don’t have to.
But Amazon has supported passage of the Marketplace Fairness Act, a federal proposal that would render the entire debate moot. The bill would allow states to apply sales tax to all online purchases and also has the support of the Minnesota Department of Revenue, the Performance Marketing Association, and big-box retailers like Target and Best Buy.
“Congressional legislation is the only way to create a simplified, constitutional framework to resolve interstate sales tax issues and it would allow us to reopen our Associates program to Minnesota residents,” Amazon said in its letter.
Frans said something similar. “If [small-business owners] would help us contact Congressmen to really move this ball forward, this is something all states could benefit from, and they could too.”
Adam Belz • 612-673-4405