Pixelrage.net

Imagine you’re an affiliate earning a steady $4,500 per month. Then, a law passes in your state, your publisher program bans you because of it, and you’re now unemployed. It’s very real, and it’s called the nexus law.

You may have heard chatter about states like North Carolina and Rhode Island, with something about affiliate programs like Amazon pulling out of those states entirely. It’s true, and we should all feel sorry for anyone living in those states who were doing affiliate marketing because their lives were ruined. This is right about the time where you start fearing for yourself.

It’s not over – about 17 more states are at risk to suffer the same fate.

What’s happening here is the nexus law – a new level of government evil bestowed upon one of the most taxed and financially exploited citizens in the free world: American citizens. If the astronomical federal tax, cost of housing, living, health care and lack of pension or retirement savings weren’t bad enough, you now have to fear losing your job as a full-time affiliate marketer with no possibility of it ever coming back, just because you happened to be living in the wrong state.

Nexus, as it applies to affiliate marketing, is an attempt to pass a law so that affiliate programs (Amazon Associates, eBay Partner Network, Commission Junction publishers et. al.) will be forced to segregate all state-specific transactions sold through an affiliate marketer (that’s you) within that state. They will then be taxed as if they physically reside in the state as a business, even if they don’t. As a result, these affiliate programs themselves are not willing to comply, so they pull out of the state entirely and ban all affiliate marketers who reside in it. It doesn’t matter if you’re making $15,000/month via Amazon, or $50/month off of it. You’re banned. Forever. Unless you physically move yourself and your family out of state and move your LLC along with you. Or, if the state government grows a brain and realizes how damaging it was to put the law in place, and repeals it (fat chance).

Why is this even being considered by any state government? Well, for two reasons: 1) typical government greed, and 2) ignorance. The rationale behind passing the law comes forth when a politician, who doesn’t even know how to turn a computer on, will propose affiliate nexus tax. The immediate thought is “that will automatically provide $XX million in ongoing revenue per month for the state.” However, since these legislators don’t even know what affiliate marketing is, they don’t realize that it also means the immediate beheading of X,XXX – XX,XXX small businesses who were relying on affiliate revenue as a full-time income. It means more businesses closing up, more unemployment paid, and more people leaving the state and becoming the citizen of another state, bringing THAT state more revenue and decreasing their former state’s revenue.

The nexus law works successfully if affiliate programs bow down to it. Some affiliate programs simply complied and didn’t cancel their relationship with the state. However, Amazon doesn’t appear to have that track record. In fact, nexus just passed in New York, making them the third nexus state. Amazon didn’t pull out, but took the state government to court. Why? Because it’s unconstitutional. Maybe they should go after RI and NC while they’re at it.

What happens if Amazon loses? They’ll probably pull out of NY. And wow, what a loss it would be to not do business in that state. Not as much of a loss as the thousands of affiliate marketers who would immediately go out of business, and leave the state or join the already overwhelmed unemployment line.

Colorado passed the nexus law in March 2010, making them the 4th state. Illinois is next up on the cutting block, and the nexus law is under heavy consideration there. There was some good news when California thankfully decided not to pass the nexus law.

What can you do, as an affiliate marketer? Use your skills in social networking – start a Facebook Page for your state, garnering followers who oppose the nexus law. Create a petition. Send it to your state representatives. Educate the governor. Write to President Obama – after all, his latest State of the Union Address was all about putting an end to governmental bullying of small businesses. This should be at the very top of his list.

If your state has already enacted a nexus tax, the best you can do is to get a list of all affiliate programs in your state who comply with the state law, and join their affiliate program.

Or, move to another state.