Avalara Taxrates > Blog > Internet sales tax > Amazon Terminates Vermont’s Associates Program - Avalara

Amazon Terminates Vermont’s Associates Program


 Vermont affiliates abandoned by Amazon.

Former Amazon associates in Arkansas, Colorado, Maine, Missouri and Rhode Island know the feeling well. One day they’re making money through the Amazon associate program, the next day they receive a “Dear John” letter that ends that relationship. Ouch.

Now Vermont Amazon associates—or rather, former Amazon associates—can sympathize. On January 6, 2015, they each received an email that terminated their relationship with the biggest online seller on the continent. Effective immediately.

Updates to the Amazon’s Associates Operating Agreement took effect on January 6, 2015, when Vermont was added to the list of ex-communicated states. The January 6 version reads:

In addition, if at any time following your enrollment in the Program you become a resident of Arkansas, Colorado, Maine, Missouri, Rhode Island, or Vermont, you will become ineligible to participate in the Program, and this Operating Agreement will automatically terminate, on the date you establish residency in that state. In addition, you must promptly notify us in writing of your Arkansas, Colorado, Maine, Missouri, Rhode Island, or Vermont residency, which you may do via the Contact Associates Customer Service form available here” [Emphasis mine].

This is a delayed response to Vermont’s 2011 click-through advertising law, which “was intended to increase pressure for a federal law.” Federal lawmakers have thus far remained impervious to such attempts. Amazon, on the other hand, has reacted.

Ironically, the Vermont click-through nexus law has not yet taken effect. Nor will it, until “after the state attorney general’s office determines that one-third of states with sales tax have adopted similar laws.” Perhaps by Amazon’s calculations that time has come. If so, Vermont lawmakers hadn’t yet realized it.

Reactions

Some government officials in Vermont seem to be trying to appease both Amazon and local affiliates.  Governor Peter Shumlin (D), reelected today for his third term, will reportedly “ask Vermont lawmakers to amend the measure so it takes effect one year after 25 states adopt similar laws.”

State Tax Commissioner Mary Peterson said her department plans to “reach out “to Amazon and affiliates in Vermont to work towards a solution without harm to Vermont businesses if at all possible.” She then issued a more critical statement, calling out "the lengths Amazon will go to avoid collecting sales tax due on products it sells." It reads, in part:

"This is part of [Amazon's] strategy to maintain a competitive advantage over bricks and mortar sellers on our Main Streets.  In Vermont’s case, Amazon acted even before our click through law took effect.

"We regret Amazon’s precipitous action, and rest assured, we will work to protect our Vermont-based bricks and mortar and online merchants. Given Congress’ continued inaction, and Amazon’s tactics, the governor will be asking the legislature to amend our click through law to take effect one year after twenty-five states adopt click through laws. We will continue to work in collaboration with other states for enactment of Marketplace Fairness that will protect our Main Street businesses."

Chittenden Senator Tim Ashe also expressed his displeasure: “…Amazon appears to be just trying to bully their way forward. Which is typical for a company like them.”

Yet Vermont venture capitalist Cairn Cross had harsh words for Vermont lawmakers: “They knew full well what they were doing. They received testimony … [that] said, ‘If you do this, this is how we’re going to react,’ and they said, ‘Yeah, whatever, we’ll do it anyway.’”

At least one affiliate, Rachael Arnold, expressed frustration that Amazon gave her no lead time. This is a sentiment that has been echoed by affiliates in other states with discontinued programs.

Federal solution

Amazon’s email to Vermont associates stressed the company’s support of a federal solution to internet sales tax. It reads, in part, “Amazon strongly supports federal legislation creating a simplified framework to uniformly resolve interstate sales tax issues. We are working with states, retailers, and bipartisan supporters in Congress to get legislation passed that would allow us to reopen our Associates program in Vermont.”

Prepare yourself

Is your business prepared for state or federal changes in internet sales tax? Automated sales tax software as a service can help. Learn more.

photo credit: Animal Park via photopin cc


Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.