It was inevitable that CA would pass this tax meant to increase tax revenue. As misguided as it is, you can’t expect a bunch of doddery old politicians to understand the economics of the internet.

Fuck California for taxing even more money from it’s people!

Fuck Amazon for dropping 1000′s of affiliates while still accepting traffic and sales from their sites. I think it’s often overlooked that there are countless online businesses which people have spent years building. These websites may have large volumes of visitors flowing through them to Amazon.com. Amazon is still accepting all the sales generated by affiliates but isn’t paying those affiliates for their hard work. It’s outright theft! I’m angrier at Amazon than California.

Enough ranting. Time to move on. Here in Colorado we faced the same thing many months ago. I remember reading news stories of Colorado based affiliates moving out of state to save their businesses. I didn’t move, but I still control an active Amazon affiliate account and they pay me from time to time. Here’s how:

1. Establish an out of state LLC or similar entity.

2. Use their registered agent service to forward your mail.

3. Open a bank account in the company’s name. It can still be a CA bank account.

That’s about it….and it’s a legit workaround. The LLC is a legal entity similar to a person for the purpose of opening an Amazon account. The LLC is the affiliate. You are merely an employee of said company. Amazon pays the company, then the company pays you. Because the LLC isn’t in CA, you shouldn’t have any troubles.

Now, where do you go from here? Well, out of state LLC’s have been very popular in Delaware, Nevada, and Wyoming. I’ve done some research on it and like Wyoming the best. Delaware is best for companies with stockholders. Nevada is OK but has occasionally thought about weakening some of it’s strong points. Wyoming has no state income tax and has never had legislation which threatened all the strong points of Wyoming LLCs.

I personally really like the “Wyoming Close LLC” entity and have 2 of them myself. The “Close LLC” is meant for family owned businesses and is well structured for estate planning. If you have lots of money, or plan on having lots of money, it might be a useful entity.

Remember that you need a registered agent service to forward your 1st class mail. They’ll forward your 1099′s and so forth. My personal experience is that the mail forwarding is marginal, so I won’t be recommending either of the 2 registered agents I currently use. But it still gets the job done.

Also, my experience of opening them was that it took FOREVER (7 weeks) with one of them. The other took about 2 weeks. If you have a serious Amazon business, you may want to pay to expedite service and would be well advised to  compare complaints that different agents have received. Check the Better Business Bureau.

I also shopped for the cheapest services over the long term and may be getting what I paid for. That being said, you can switch registered agents if you have trouble with one of them.

Here is an affiliate link to a pretty big outfit. I’ll get a few bucks if you choose these guys. But I haven’t tried them out myself. www.incorporate.com

P.S. It doesn’t have to be Wyoming. Maybe you have trusted friends or relatives out of state somewhere. You can set up an LLC in any state that Amazon still accepts. Several states have no state income tax. Costs vary state to state.

Did I leave something out? Got a question? Please comment and tell us what you think about the Ca affiliate tax.

The first four clips are from the Affiliate Ball and the last video is from Shareasale’s party.

I rolled with some friends to a few other locations but didn’t think to take pictures most of the time. But of course, during the Affiliate Ball, there were something like 15 parties all at the same time. I shot these videos with my Motorola Droid X

An impromptu interview with Shoemoney at the airport in Las Vegas. It’s a nice overview of the newly launched Link Control. Initially, I messed up and uploaded the unfinished file with crappy audio. This version of the video is much improved.

The legendary Jeremy Schoemaker AKA Shoemoney has a great contest going on right now. Here is my video entry: (spoiler alert:….if I win I’m going to shave my head! and give away up to $4000)
UPDATE 12/31/2010:

I’m listed in the top 10 and need votes from you to win! Please GO HERE to VOTE for Danger Brown right now. You have to scroll down to the bottom of the post to vote. Thank you so much! PLEASE vote for Danger Brown!!!

Final Update: 01/04/2010 I didn’t win. But placed 4th out of 90+entries. The winner got most of his votes using Amazon Mechanical Turk to pay $.05 each for people to vote for him. Some people might cry foul, but apparently there were no rules. I predict that next year either the rules will change, or it’ll just be an MTurk war between finalists.

It was fun to participate and overall has been a great experience.

Check out what the winner of this contest wins:

A platinum pass to Affiliate Summit West.
2 nights hotel accommodations paid for at the Wynn.
$500 Airfare Reimbursement.
$2000 to gamble on 1 hand of blackjack
Roll with Shoemoney at Affiliate Summit.
A pass to the Epic Advertising Playboy Mansion Party this fall.

When I read that, here is what I heard. “blah, blah, blah, Playboy Mansion Party!!” OK, this is a contest worth entering!! Thanks Jeremy!!! See you there!

UPDATE: I really need your vote to win this thing! Please go vote for me now! Thank you.

You think affiliates go to Vegas to learn stuff? Nope. It’s all about the PARTIES!!  This is the most complete list you’ll find. Time to RSVP.

Sunday, January 9th:

Ultimate Affiliate Event (UAE) 10 to close with open bar at the Blush nightclub at the Wynn

There is a rumor of a Shareasale party at Tryst at the Wynn but they haven’t announced it yet so details aren’t firm.  UPDATE: Their party is from 8:00pm to 12:00 midnight on Sunday January 9th. Open bar, indoor/outdoor areas. Go by their table at the meet market on Sunday to get an invitation.

Monday January 10th:

Affiliate Ball at the Rio’s Crown Theater with Three 6 Mafia in concert
9:30 preregistered, 10:30 if you crash it. You’ll need your badge if you aren’t on the list.

Affiliate Summit Tip-off Party at the Hardwood Suite at the Palms at 9pm

Clickbooth may be throwing a party on the 10th, but they haven’t announced it and I don’t have any more details yet.

That’s it for the major parties but here are some other events:

DK is throwing a two night poker tournament at the Mirage Hotel Poker Room.
Saturday the 8th still has seats available I think.
Sunday the 9th has sold out all 100 seats (I bought one of them and am looking forward to it.

Ian Fernando will be having his Ianteract dinner which is invite only.

Jonathan Volk will be having a meetup still waiting to be finalized.

PPVplaybook forum will be having a meetup from what I hear, but I don’t know the details.

It’s not too late to attend Affiliate Summit. Sign up now!

Got an update? Know something I don’t? Leave a comment and set us straight.

We shot this at Shareasale’s Thinktank at Half Moon Bay CA at the Ritz-Carlton. Below the video are links to everything we talked about.

What are you waiting for? Sign up for Affiliate Summit today!

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Sign up with Shareasale.com to promote Affiliate Summit and earn 15% per sale.
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Get a Free subscription to Feedfront Magazine.
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Check out Blog.AffiliateTip.com
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Visit Geekcast.fm for some great podcasts and more!

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Buy the book in paper or Kindle editions:
Internet Marketing From The Real Experts

Internet Marketing From The Real Experts – Kindle Edition

The FTC just decided to kick a small USA based business woman’s ass because she was providing ordinary publicity work paid reviews for clients with wares to sell.

The defendant victim was using ordinary sales puffery. If you are unfamiliar with the term; it refers to a legal concept that salespeople may make positive statements about their products that are exaggerations of the truth. It’s inspired by the ancient belief in caveat emptor (let the buyer beware). Customers expect, and commerce requires salespeople to be able to puff up their own products. Outright lies of course shouldn’t be tolerated.

If the following statements were made in a commercial on TV, Radio, or printed media, they would have garnered no attention.  These are the statements made by the victim Tracie Snitker’s company Reverb Communications Inc.’s employees:

Although I am not an Amazon affiliate, my wife and mother-in-law both are. My mother-in-law especially has hundreds of blog posts and at least many dozens if not hundreds of Amazon links in place on her blogs.

Colorado affiliates including myself successfully lobbied to get affiliates removed from HB-1193. Lawmakers excluded affiliates from the bill and passed it. Amazon must have decided they didn’t like the bill and decided to fire all Colorado based affiliates.

The biggest crime here is that Amazon is leaving all links in place and accepting sales from these Colorado affiliates. So affiliates who have spent years building up businesses may have 1000′s of links in place over many websites through which customers are still flowing to Amazon. The only thing Amazon has changed is that they are no longer paying Colorado affiliates their hard earned money. I’m praying for a class action lawsuit. Anyone know a good lawyer?

Below the Fail-ometer is a copy of the letter my family members received yesterday:
“The Fail-ometer”

“Dear Colorado-based Amazon Associate:

We are writing from the Amazon Associates Program to inform you that the Colorado government recently enacted a law to impose sales tax regulations on online retailers. The regulations are burdensome and no other state has similar rules. The new regulations do not require online retailers to collect sales tax. Instead, they are clearly intended to increase the compliance burden to a point where online retailers will be induced to “voluntarily” collect Colorado sales tax — a course we won’t take.

We and many others strongly opposed this legislation, known as HB 10-1193, but it was enacted anyway. Regrettably, as a result of the new law, we have decided to stop advertising through Associates based in Colorado. We plan to continue to sell to Colorado residents, however, and will advertise through other channels, including through Associates based in other states.

There is a right way for Colorado to pursue its revenue goals, but this new law is a wrong way. As we repeatedly communicated to Colorado legislators, including those who sponsored and supported the new law, we are not opposed to collecting sales tax within a constitutionally-permissible system applied even-handedly. The US Supreme Court has defined what would be constitutional, and if Colorado would repeal the current law or follow the constitutional approach to collection, we would welcome the opportunity to reinstate Colorado-based Associates.

You may express your views of Colorado’s new law to members of the General Assembly and to Governor Ritter, who signed the bill. [3 links removed]

Your Associates account has been closed as of March 8, 2010, and we will no longer pay advertising fees for customers you refer to Amazon.com after that date. Please be assured that all qualifying advertising fees earned prior to March 8, 2010, will be processed and paid in accordance with our regular payment schedule. Based on your account closure date of March 8, any final payments will be paid by May 31, 2010.

We have enjoyed working with you and other Colorado-based participants in the Amazon Associates Program, and wish you all the best in your future.
Best Regards,

The Amazon Associates Team”

Hey folks. We all know Dennis is a great guy who never hurt anybody. He never did anything wrong, broke any rules, or scammed anybody.

I’m taking up the cause to show him a little charity but I can’t do it without your help. I’m taking up a collection to get him a little present that should help him stick around in our industry. Just a little something that will make his life easier when he goes to industry events.

What is it?

Drum roll………

It’s…..

The Spit Sock Hood!

If you don’t know why Dennis Yu needs a spit sock hood, I present several reasons:
Here is the article Dennis wrote that started it all. Followed by responses from Shoemoney, ppc.bz, Uber, Nickycakes, John Chow, Trevor Nash-Keller, and more.

Now seriously folks. I’m worried about the guy. He’s gonna keep showing up and he’s gonna need lots of spit sock hoods.

Now they only cost $3.95 for one or $44.64 for 12 of them. Donate any amount you feel comfortable with and my hand to God, I’ll put your donations together and ship as many Spit Sock Hoods as we can afford straight to BlitzLocal’s offices located between the dumpster and recycling bin behind Chuck-E-Cheese in some bad neighborhood in Denver.

If this little fundraiser is successful, we may hold a follow-up fundraiser to get him some much needed supplies like this book:

Does anyone else have some nice gift suggestions?

There was a strong grassroots movement of affiliates opposing the Colorado affiliate tax. Many people wrote letters, made phone calls, and showed up to testify in person.

HB 1193 was modified on 02/08/10 eliminating affiliates from it’s terminology. Lawmakers succeeded in preserving 100′s of jobs that are pumping money into Colorado’s economy.

UPDATE: Well Amazon decided to fire affiliates anyway and keep their business at the same time.