The latest news regarding bloggers happened in California. Affiliates of Amazon, Overstock.com (also O.co) and probably other smaller California based businesses were told, “you’re fired”.
In the article, Should the Internet Be Taxed, WebPro News shared:
On Friday [July 1, 2011], a new California state law goes into effect that will tax Internet sales through affiliate advertising. Rather than pay such taxes, online retailers like Amazon will instead shut down their affiliate programs in the state. For Amazon, that is said to come to 25,000 sites in California alone.
Amazon has told affiliates in the past that they’d have to move to another state to continue earning commissions on referrals. Overstock.com has reportedly done that before too.
Some groups representing brick and mortars feel the law should be extended on a national level, claiming the taxes take away competitive advantages from Internet retailers that don’t have a physical presence in a particular state. Consumers are able to avoid fees from purchasing from these retailers that they’d otherwise have to pay by buying in-state.
My heart goes out to these affiliates. Hopefully this issue can be resolved in an amicable way.
I think it’s great how us bloggers can potentially make an income from our blogs. It not only covers our overhead, but can also lead to new opportunities and even self employment.
And with the economy remaining slow, every little bit helps.
That said, anyone in business knows it’s not wise to put all of our eggs into one basket. Anytime we rely solely on one client for our livelihood , we set ourselves up for potential problems. If our star client dies, files bankrupty, goes out of business, hires our competitor, or ___(fill in the blank)___, our income stops. Sadly, the bills don’t.
I think there’s an important lesson to be learned here.
If we bloggers continually put our trust into one or two big named businesses, happily promoting the products/services of others, and wait with baited breath to receive our
piddly commission checks, we could be setting ourselves up for disappointment and even financial ruin.
Just like when big banks and big government go down, the same can happen to us.
Trust in others is one thing, but when that trust could be broken on a moments notice, we soon realize our trust was misplaced.
Making money with a blog by using affiliate links or Google AdSense is one of the easiest routes to go, however our livelihood is in the hands of others.
Maybe it’s time we start thinking how we can do it on our own*.
What say you?
Did you get caught up in the California tax law dilemma?
What do you think is the best way to protect ourselves from situations like this?
Care to share?
*Watch for an upcoming article where I share how fellow bloggers are making money with their blogs as well as ideas on how to diversify.