Pace Lattin: Tax Nexus Affects Small Business

Join the Performance Marketing AssociationSmall Businesses: you know I’m a major proponent because they are the solution to the current fiscal crisis and the best way to spread the wealth around to increase the standard of living for the most people.

Unfortunately, there is bad news on many fronts for small businesses and I include in that category bloggers, affiliate marketers, and small affiliate networks.

I was discussing this very subject with Pace Lattin yesterday. In March, when Illinois passed a tax nexus law, he wrote that Wal-Mart is Behind Affiliate Taxes: Hurting Small Businesses that I encourage EVERYONE to read.

It is up to us as bloggers, affiliates and business owners to educate people who do not understand that these are not ‘Amazon laws’ and they have not increased tax income for the states that have implemented them.

California is the latest state to head down the tax nexus road. Revenews and the Performance Marketing Association sites are two of the best places to educate yourself. See Britt Raybould’s post there on the California Nexus Tax for strong arguments against it and check on Tax Nexus Status on the PMA site.

As often happens when someone is passionate about ethics and highly opinionated, controversy dogs Pace Lattin – primarily because he focuses on fighting performance marketing fraud.

I don’t know him well, but I have a soft spot in my heart for anyone who points out the obvious and catches heat for it, such as this quote:

Female Industry Executives who post photos of themselves half-naked. I’m confused on how women in this industry are supposed to be taken seriously when dozens of them have professional Facebook pages that either show them in bikinis or worse half drunk, with horrible spray-on tans at ad:tech kissing their female colleague.

Makes me wonder if they think that online advertising is somehow connected to Jersey Shore? I recently got a friend invite from a sales person at an advertising network that had photos of her “implied” topless in lingerie.

Pace has been involved in the interactive advertising industry for about as long as there has been an industry, founding or contributing to these well known sites:

  1. Editor in Chief and Co-Founder of Offer Vault ~ content he writes is linked from the Pace Lattin author page there.
  2. Founder of Adotas ~ see his Pace Lattin author page for his articles there.
  3. Contributing author ~ Pace Lattin author page on ClickZ
  4. Pace Lattin author page on The Media Briefing
  5. Executive Director of Executive Council of Performance Marketing (ECPM.org)
  6. Pace Lattin letters of reference on ScribD
  7. Pace Lattin Crunchbase Profile at TechCrunch
  8. This PR Web press release contains the best explanation of Pace Lattin’s anti-fraud services

Pace seems to be one of those kind of people that is either loved or hated. As I mentioned, I don’t know him well; however, he has written some excellent content and is willing to take a stand for what he truly believes is right. Like any of us we may not always be correct, but as long as we are doing what we truly believe is right that is the best we can do.  If you want to know more he has a Pace Lattin Facebook page.

Since this post may bring out the wickedfire folk, here is fair warning. Watch your language (this is a G-rated blog and profanity is NOT permitted.) Personal attacks will not be tolerated. Be civil and write intelligently and I will approve your comments. Behave badly and I will delete them.

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Gail Gardner

Small Business Marketing Strategist at GrowMap
Creator and owner of GrowMap.com, Gail is primarily known for mentoring small businesses and encouraging bloggers to join collaborations to share skills and support small business.

Comments

  1. It’s crazy to think that a big corporation are lobbying to tax small businesses. It\’s crazy to think how these companies think they can prey on small businesses. Well thought out explanation.

  2. We need all the support we can get on this issue!

  3. As an affiliate marketer I am a little torn because I do not want to lose income when networks kick out affiliates. But at the same time, I can see the damage that Internet retailers have caused to local retail like book sellers. I think online retailers should pay tax and they shouldn’t eliminate affiliates to avoid paying tax.
    Steve would love you to read ..2011 Rules for Charitable Contribution DeductionsMy Profile

  4. iPhone App Development says:

    “It is small business so it has no more importance in nation strength.” This type of mentality is dangerous for country. There are many live examples that support this reality.
    iPhone App Development would love you to read ..Overview of End To End Mobile Apps DevelopmentMy Profile

  5. “Female Industry Executives who post photos of themselves half-naked” “I recently got a friend invite from a sales person at an advertising network that had photos of her “implied” topless in lingerie” That is not very professional if it is true. So instead of you just telling us this, please share the links to these people, especially the sales person in lingerie…. of course this is just to get the facts straight and not for my own viewing pleasure…. :)

    But back to more important matters. This tax nexus law is hurting many people and as far as I know helping none.
    That is what the states get for being greedy: Nothing.
    It is especially sad for small affiliate sellers. The big guys/girls just open a business in a state where the nexus-law is unlikely to pass.
    It’s sad nevertheless.
    Danny would love you to read ..Remington RM1015P 10-Inch 8 Amp Electric Pole chain SawMy Profile

  6. This is an issue that someone needs to get behind. I definitely agree with paying taxes but imposing taxes for small businesses is another kind of issue. Everbody is not informed that this small businesses helps strengthen the countries economy. In fact they are somewhat contributors for the success of the economy and though small, it can also be considered as a start of being a successful businessman. It does not matter whether it is small or big business. In fact, both are sources of income which affects the economy of the state. It is in the idea of starting a small business that somehow solve and lessen the problem of unemployment.Nice work for making us informed and educated about this kind of issue.

  7. Consider the following…compromise is were the law flows the due processes of arbitration. Generating surplus commentary affiliates the interests that coincidentally change distribution. And isn’t that what we all want for business to keep flourishing? Sounds to me like, the upswing is in expanding our horizons of adversarial enterprising. Getting in and getting our feet wet. What a great time for opportunity making the more the merrier. Thanks for the outsourcing.

  8. i would be curious to see a dollar amount of what these measures are actually bringing in. it is a bit frustrating and i would hate to find out a company like walmart was lobbying for it.
    jane would love you to read ..Tax Attorney In AtlantaMy Profile

  9. Thank you again for all your support on this issue!

  10. Whether its small business or the big business the economy directly or indirectly have an impact on these businesses, in fact every source of income affects the economy of a state. It has become very important to curb the unemployment problem and it is entrepreneurs and people who try become self employed solve the employment problem.

  11. Hi Pace,
    I appreciate your initiative and support the cause. thanks for sharing the links which helped me to understand the issue more clearly…

  12. I strongly agree on the points mentioned by Pace, John and Beth. Small business helps to strengthen the economy slowly and is an effective way for being a successful businessman. And last but not the least, thanks a lot growmap for such a wonderful article.

  13. Thank you for putting together this AMAZING resource. I agree with John…
    Nicole would love you to read ..Hello world!My Profile

  14. Although I agree to pay taxes since it is used by the government for the public, I do believe that some of the taxes imposed are unreasonable for small businesses. Worse still, greedy commercialists are not affected. We may want to remove those but the truth is there is very little we can do without money.

    Sad to say, when a person’s business booms and it has the same ranking as that of Walmart, most become greedy and act the the same way as those that he used to hate.
    Glenn would love you to read ..15 Life Lessons I Learned While TravelingMy Profile

  15. I think all of the symptoms that we are seeing, i.e. states chasing revenue in any and all forms that they can get are signaling a much, much larger problem that taxing Amazon products will not fix.

    Why do I always feel that we are being fed a bait and switch just to keep the machine running a little longer.

    Either way, I see a major correction coming, you know, the one we haven’t gotten wind of yet…the real one.

    Mark
    Mark would love you to read ..Spinning Articles ResponsiblyMy Profile

    • Hi Mark,

      You and I are on the same page on that. See the links I put in the reply to Pace below about the coming depression. IMHO the most likely scenario is hyperinflation.

      Ironically there IS a solution – support small businesses. Source locally. And have those local sources in place now so when the dollar crashes you can barter or use a local currency. There are quite a few locations printing their own and lots of results for a search for Local Currency.

      There are also time banks or time exchanges. I suspect the elite don’t think those will fly because all hours are exchanged equally whether you’re a doctor, plumber, babysitter or handyman. I like the idea – a lot.
      growmap would love you to read ..The World Media Awards and Blogging EventMy Profile

  16. Pace Lattin says:

    Thanks for the support. This is a serious issue that everyone needs to get behind. Unfortunately, Walmart and others have paid goons to get what they want. We need to stick together!

    • Hi Pace,

      The problem we have is that too few people understand the ramifications of not choosing small businesses over multi-national corporations nor do they realize how they use supposedly “grass roots” organizations that APPEAR to be FOR us that are actually doing exactly the opposite!

      They don’t know that they slip evil changes into legislative bills at the last second so there is no debate and few even realize what they’ve done until much later.

      When we (employees of IBM and other corporations converting to illegal cash pensions) were fighting to stop them we would find the wording in bill after bill, raise visibility, get it out of that 0ne knowing it would just appear in another. It was a full time job for several people just to be vigilant.

      It came to a point when I either had to play Norma Rae or walk away. I resigned over that and how we went from ‘IBM Means Service’ to no sleep and no way to provide decent service.

      People need to wake up. It is as it has always been. We are born into a no-win game where we in the U.S. have the ILLUSION of freedom but are actually slaves until we opt out. And few are they who are willing to completely opt out.
      growmap would love you to read ..Pace Lattin: Tax Nexus Affects Small BusinessMy Profile

  17. Thank you Gail. We are waging a war here against companies that will do anything to protect themselves. The Walmarts of the world are spending tens of millions of dollars to not only make us believe that this an Amazon Tax but paying bloggers and marketing “gurus” to attack our cause, go after people and generally cause havok.

    We need to stay on point: Affiliate Taxes make no sense whatsoever to anyone.

    • Hi Pace,

      I have been writing about the dangers of multi-national Corporations and especially Wal-Mart and Google for years now. Unfortunately many still do not see the connection between their own actions and the consequences.

      I encourage people to educate themselves about multi-national corporations – not just Wal-Mart but ALL of them and especially Google. They pay next to no taxes and in the case of Wal-Mart intentionally transfer costs of doing business to the public dole.

      I have tons of posts that have resources in them that clearly show the truth – IF someone is willing to open their eyes and see it. Here are some off the top of my head:

      What Caused the Great Depression – this post has tons of great links including the REAL history of the United States and After the U.S. there is nowhere to go and many others.

      How Dangerous Google Is with many references to the evil they do.

      There are some great links in that post explaining Why Wal-Mart is ALWAYS bad for Small Business and how small towns can make a comeback IF people will start supporting small businesses and stop buying at big box stores like Wal-Mart, Lowes, Target, K-Mart, Home Depot and the others.

      If we educate the residents BEFORE Wal-Mart takes too many sales away from the small businesses there. It is very disappointing that people who have known their neighbors who own businesses for decades and often generations will put them out of business by their own actions and either not ‘get it’ or not care.
      growmap would love you to read ..Social Media Priorities FunnelMy Profile

  18. John Knights says:

    Very true.
    Small businesses had been the back bone of our economy during the last recession. I don’t these small business owners deserves being in pain with all these taxes.

    We have many small business clients who share their experience of what they call tyranny of those self proclaim gods, and It’s very sad to hear their stories.

  19. As an affiliate marketer myself I applaud your vigilance and attempt to keep the community educated.

    Having fled the tyranny of the California beauracracy to a more tax friendly state I am not surprised that the law has little or no positive revenue effect.

    As a community we need to speak with our wallets. If Wal-Mart chooses to be a proponent of higher taxes on us, maybe we should make an effort to spend a little more on Amazon.
    beth would love you to read ..Russian Matryoshka DollsMy Profile

    • Hi Beth,

      Your comment reminded me of how desperate California is when they want money. When I moved away they sent me tax bills for income I never earned for three years in a row even though I left NOTHING in California and earned no money in any way from that state.

      The third time I finally got them to tell me WHY they thought I owed them income tax. I had renewed my Race Horse Owners’ license just before I found out I was moving and in California they’re good for three years.

      I told them I had no horses out there and had earned no purse money (a record of which they would or could have gotten from the race tracks – I suspect they require them to report purse money earned) so how could I possibly owe them income tax?

      They said there are $X in purses paid out divided by the number of registered owners = each owner COULD have won $X and would owe taxes on that. Only two major things wrong with that argument.

      First, most of the money is in purses for big stakes races so a few owners earn most of the money in every state. Second, they are conveniently forgetting expenses. Income = earnings MINUS expenses – and in the race horse industry expenses usually exceed income so you don’t make money and therefore owe no taxes.

      That wasn’t the only thing California does. They also claim the percentage of retirement you earned in California during your career no matter where you live which means many could end up paying taxes on the same retirement income twice.

      IBM’s CEO LVG decided he needed our pensions more than we did so that is a moot point for me – and at least I wasn’t one of the people who got divorced and paid half the value of their retirement to their ex-spouse in a settlement – and then didn’t get most of their retirement. Double ouch!
      growmap would love you to read ..Blogging Priorities: Deciding What to Do NextMy Profile

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