Overstock dumps affiliates, rants about tax-happy states

Overstock dumps affiliates, rants about tax-happy states

Summary: Overstock is joining Amazon and Blue Nile in the parade of e-commerce companies dumping affiliates in states that aim to slap a tax on Internet referrals.On Wednesday, Overstock said that it will drop its affiliate advertisers in California, Hawaii, North Carolina and Rhode Island---four states looking to tax referrals.

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Overstock is joining Amazon and Blue Nile in the parade of e-commerce companies dumping affiliates in states that aim to slap a tax on Internet referrals.

On Wednesday, Overstock said that it will drop its affiliate advertisers in California, Hawaii, North Carolina and Rhode Island---four states looking to tax referrals.

In a statement, Overstock called these state tax laws "anti-internet advertising laws." Overstock and Amazon have lawsuits pending against the state of New York. The states want tax revenue and e-commerce companies argue that taxing referrals is unconstitutional. The question: Are people that collect commissions for pointing to an e-commerce site the same as physical assets?

Also seeAmazon vs. tax happy states: E-tailer could nuke Associates program and still win

Overstock said that it will sever affiliate ad relations in any state that appears to be close to pass tax-happy laws. You can expect other e-commerce companies beyond Overstock, Amazon and Blue Nile to do the same. Overstock president Jonathan Johnson said:

Internet advertising is a tidy little business that can be done by just about anyone, anywhere on the globe. When states unwisely and unconstitutionally pass these laws, their local internet ad business will quickly go dark, and that business will simply migrate to states more friendly to internet commerce.

While Amazon is the big e-commerce dog on the block, Overstock is likely to become the most vocal about the referral tax issue. If Amazon is a Saint Bernard (or any other big dog you can think of) Overstock is the yapping terrier that won't shut up. After all, the company is quite chatty and will beat the issue to death---something that needs to happen. Overstock's war of words with short sellers in recent years has been entertaining to say the least.

Topics: Amazon, Banking, Browser, Government, Government US

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6 comments
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  • Vote with your feet...

    State Darwinism...

    States that pass happy-tax laws will have fewer businesses willing to work in those states. Those states will lose population as investment money and jobs go to states with less regulation and taxation. Fewer people means less political clout and tax revenues. States will be forced to lower taxes to compete with neighbor states who are run better and have less waste.

    Should work out fine in the long run.
    Fark
    • already happening

      Calif. NY and NJ has seen a mass exodus of residents in recent years. I'm a refugee from 2 of the 3. You simply can't justify the NJ taxes for the privilege of living in that state.
      Larry Dignan
      • Amen!

        NJ and NY are rapidly becoming to expensive to remain a resident. The gov't keeps buying votes by making a smaller and smaller population pay for a greater and greater share of the bill.
        Fark
  • if we all vote with our feet

    there won't be anybody left in NY - except for Albany!
    ca1ic0cat
  • RE: Overstock dumps affiliates, rants about tax-happy states

    I have no problem with Overstock and others making this move, but I'm wondering what the affiliates are doing? Moving to other states? That seems like quite a lot, especially if there is risk that next state may follow suit. I suppose the hope here on the side of Overstock, Amazon, etc. is to make a huge statement that either leads to reversal or more likely simply dissuades future states from following this approach.
    ephricon
    • Oberdok

      yes,Overstock called these state tax laws anti-internet advertising laws. Overstock and Amazon have lawsuits pending against the state of New York. The states want tax revenue and e-commerce companies argue that taxing referrals is unconstitutional http://manstabau.com . The question: Are people that collect commissions for pointing to an e-commerce site the same as physical assets?
      bobdoskaen4