California has adopted an Internet sales tax and is requiring some online retailers based in other states to collect the tax and
remit it. As a result, Amazon and other large online retailers are beginning to terminate their affiliates in California.Click the link to download the PDF of the new law:
http://www.leginfo.ca.gov/pub/11-12/bill/asm/ab_0001-0050/abx1_28_bill_20110628_enrolled.pdf
We don’t know the future of these sorts of laws, because they are arguably unconstitutional.
We expect that lawsuits will be filed regarding the constitutionality of the Internet sales tax laws, and these cases will end up
being decided by the U.S. Supreme Court.
Unfortunately, in the meantime, if you have affiliates in California or other states that have passed these Internet Sales Tax laws, you’ll have to collect the taxes until a final determination is made by the U.S. Supreme Court, which will likely take years.
Check with your Accountant to see if your state has passed an Internet Sales Tax.
This is just one of the MANY major changes that will be re-defining the Internet Marketing landscape, so stay tuned!
Texas Governor Rick Perry vetoed a state Internet sales tax. Check out an interesting article
from Attorney Mike Young here: http://mikeyounglaw.com/internet-lawyer/texas-internet-sales-tax-hb-2403-vetoed-by-governor/
In April, the Federal Trade Commission (FTC) in the US filed lawsuits against marketers claiming to be reporting news about weight loss products that were actually just sales pitches full of unverified claims.
The FTC has reported that: “[m]illions of consumers are being lured to websites that imitate those of reputable news organizations. The “reporters” on these sites supposedly have done independent evaluations of acai berry supplements, and claim that the products cause major weight loss in a short period of time with no diet or exercise. In reality the websites are deceptive advertisements placed by third-party or ‘affiliate’ marketers. The websites are aimed at enticing consumers to buy the featured…weight-loss products. These fake news operations are the subject of a nationwide law enforcement initiative.”
So….why are these affiliate marketing sites fraudulent? Well, the people who are allegedly “reporters” and “investigators” DO NOT EXIST!
Their reports are nothing more than product claims without any proof of the alleged results. In other words…. The sites contain
sales pitches that just LOOK like investigative news reports.
2 Keys to staying on THE RIGHT SIDE of the law as an affiliate:
1. Transparency.
2. Honesty
How do you do this?
You need to make a full disclosure of any “material” connections that you have when you are promoting a product or service whether it’s online or offline.
If you’re an affiliate of a product that you’re promoting or providing a “review” for- disclose that to your reader.
If you got the product for free in exchange for your review of the product- disclose that to your reader.
Trust me, your reader will appreciate your transparency and your bank account will benefit from operating your business with
transparency and integrity.