Affiliate tax law wars & Amazon… Got you stuck in the middle? What to do?!

If you are from one of the following states… California, Texas, Colorado, Connecticut, Arkansas, Illinois, Hawaii, Rhode Island or  North Carolina, you can’t use Amazon’s affiliate program. But no worries.. There is a solution.

Now as we all know already, Amazon has dropped all of it’s affiliates or as they like to call them “associates” from a whole bunch of states in recent years thanks to these newly passed internet taxes put in place by local governments… Most recently, California and Texas affiliates got the boot! That is a whole lot of people right there… Around 65 million to be exact, and internet / tech industry is huge in those states… Lots of people got screwed, big time. A lose-lose situation… Unfortunate.

Amazon.com says goodbye to California, Texas, Colorado, Connecticut, Arkansas, Illinois, Hawaii, Rhode Island and North Carolina affiliates.. OUCH!

So yea, I’ve got a ton of clients that have been impacted by these changes… They have had their accounts closed and revenue has evaporated overnight. Ouch! Plus… I get complaints from potential clients that say… “I wish I could launch some Amazon powered affiliate e-commerce stores, but because I am from this and that state, Amazon doesn’t accept me.” So what to do is the million dollar question? Below is what I have been advising clients for over a year now. Option #2 is the best… Option #1 is a quick solution that does not cost anything, but it’s not for everyone.

1) Ask Your Mother In Law For Help.. ?

What??! Ok, so maybe not your mother in law but a family member… Maybe even a close friend. The whole idea is to ask somebody who is close to you and trustworthy more or less to open up a new Amazon account for you in their home state where there isn’t stupid tax laws in effect. Amazon can pay you via a direct deposit/wire transfer or check. Where you deposit these or receive them nobody really gives a shit about, so at the end of the day, so long as on paper you are somewhere else… Amazon will continue doing business with you without thinking twice. Win-win… Just make sure to cover your tracks.

2) Incorporate Somewhere Else.. DUH!

Go ahead and incorporate in a business friendly state that will never pass a bunch of stupid laws… These states that I would recommend are Delaware or Nevada. It only costs a few hundred bucks to incorporate a new / foreign business entity and it’s well worth it. You can be up and running within a matter of days. If you are serious about development, affiliate marketing, etc… This little investment is a must.

You won’t have to worry about that your home state is next to get canned and you can focus on growing your business with peace of mind. Before you go this route though, do advise with your accountant and/or attorney. Just to be safe, you want to make sure that you aren’t breaking any laws and that everything checks out all good at the end of the day.

Amazon.com Affiliates... Incorporate In Delaware, Nevada or somewhere Offshore far far away from the US of A and you'll be set for life... Yay!

Development is full of challenges. Same with affiliate marketing… You gotta be in it for the long run, and try to think creatively and outside the box if you are going to make it. Best thing is to incorporate far far away from the US since this keeps on happening. I have more than one companies “offshore” for various reasons, but I still have a few in my home state too, there are advantages and disadvantages… All depends on your unique situation. So whatever you decide to do… Do some research first, and then act accordingly. Good luck!