I need your help to stop a proposed law in the state that I live that directly affects whether or not I can continue to publish and write on PaddlingLight as it directly impacts PaddlingLight’s primary income source. The law is called an Affiliate Nexus Tax and it’s an attempt to force out-of-state retailers to collect state sales tax. The sad part of this is that Minnesota might sacrifice 4,500 jobs and $300 million in income over a law that has already been struck down as unconstitutional in a circuit court in Illinois. More info below.
What you can do is write the folks listed at the bottom of the article. If you don’t live in the state emphasize how you enjoy this Minnesota-based website, how well it portrays Minnesota as a paddling destination and how it makes you want to paddle Lake Superior in Minnesota or the Boundary Waters Canoe Area Wilderness, and how it would be a loss to the state if PaddlingLight had to close down. Plus, all the other stuff as well.
Anyway, here’s the lowdown:
I live in Minnesota and our governor, Governor Mark Dayton’s new budget includes an Affiliate Nexus Tax, which attempts to force online retails that have representatives in Minnesota to collect MN sales tax. This sounds like a good thing, because residents of Minnesota should pay all the sales tax that they owe on online purchases. The law already requires this. Unfortunately, the Affiliate Nexus Tax is intellectually dishonest, because it attempts to equate performance-based marketing with a retail operation representation. Additionally, one court has already found that this type of law is federally unconstitutional.
Affiliate marketing works this way: the affiliate runs a website and reviews a product and links to an online retailer where the website visitor can purchase the product. If the visitor buys the product, then the affiliate is paid a commission. Retail works this way: the retailer, online or brick and mortar, buys a product at wholesale, marks it up, puts it up for sale and then sells it. Affiliate marketers never process an actual retail transaction, have nothing to do with the operation of the online retail store and affiliate marketers are never under direct control or employment of an online retailer. They’re independent and act on their own.
So, what is the overall effect on Minnesota where PaddlingLight is based?
There are 4,500 affiliate marketers in Minnesota who bring in an estimated $300 million a year to the state from out-of-state sources. In every state that an Affiliate Nexus Tax passed, the online retailers dropped their affiliates in that state, which means in Minnesota’s case that 4,500 people lose their annual income/jobs and $300 million less is brought into the state. Before Illinois law was struck down as unconstitutional, it actually caused a decline in sales and use tax collected, a sharp decline in employment and several 40+ employee businesses to leave the state. The states that passed the laws didn’t see the expected benefits and instead saw net negative effects.
So, how does this affect Cook County where PaddlingLight is based?
Affiliate marketing is a great way to make income in remote, depressed-wage, seasonal tourist areas such as Cook County, Minnesota. If you have an internet connection, the ability to write, and the motivation and time to maintain a website, you can become an affiliate marketer and make money online with limited investment. If this passes, it removes a way for Cook County residents to bring steady money into a seasonal economy. I do it, and if I can do it, so can you.
So how does this affect PaddlingLight?
PaddlingLight is in part funded through affiliate marketing. It helps pays the bills and helps compensate me for the time I put into this website, approximately 5 to 10 hours a week, although when I was doing the free kayak plan project it was almost 30 hours a week. Without this income, I’m not sure that PaddlingLight survives as I’ll have to put my personal time into making money elsewhere. There are many other paddling websites based in Minnesota that do the same thing, they may disappear as well.
What can you do?
If you live in Cook County, write Representative David Dill and Senator Tom Bakk. If you live in Minnesota, connect your state legislature and do the same. You can get the contact info on the Minnesota Legislature contact page. If you live outside the state, write Governor Dayton and then Senator Tom Bakk and Representative David Dill.
What to tell them:
- You oppose the Affiliate Nexus Tax law, because:
- Affiliate marketers do not establish a nexus in the state because they aren’t directly controlled by an online retailer. Affiliate marketers invest their own time, own effort and own money to get paid only for performance. They don’t represent an online retailer. Affiliate marketers are independent advertising channels.
- 4,500 jobs are at risk, because once Affiliate Nexus Tax laws are passed all the affiliates are dropped in that state.
- An estimated $300 million from mainly out-of-state sources is at risk.
- It was ruled unconstitutional under the Commerce Clause of the US Constitution by Judge Robert Lopez Cepero on April 25, 2012 in an Illinois Circuit Court.
- In Illinois, before ruled unconstitutional, it caused a decrease in sales and use tax collected,a sharp decline in employment, and caused several small businesses with 40+ employees to leave the state.
- That you support a national solution that levels the playing field for every online retailer and every brick and mortar store, such as one proposed by U.S. Senator Dick Durbin.
- They should oppose the Affiliate Nexus Tax law for the same reasons.
- It would be devastating to your favorite website, PaddlingLight, which is based in Cook County, Minnesota, and PaddlingLight may shut down after affiliates are dropped in Minnesota if they income can’t be replaced.
Here is the contact info:
Representative David Dill
- Email: firstname.lastname@example.org
Majority Leader Thomas M. Bakk
- Email: Use Mail Form
Governor Mark Dayton
- Email: Use Contact Form
Contact them now. Thanks!