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Amazon Drops Minn. Affiliate Bloggers To Avoid Tax

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(credit: CBS) Reg Chapman
Reg Chapman joined WCCO-TV in May of 2009. He came to WCCO fr...
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MINNEAPOLIS (WCCO) – Minnesota bloggers who push products for Amazon say a new law could run them out of business.

In order to avoid paying millions in sales tax to the state, Amazon sent notice to its Minnesota bloggers that they will soon be kicked out of a program that pays them for connecting people to the online retailer.

A law meant to make money for Minnesota, will soon take money away from some Minnesotans.

Starting next month, bloggers won’t get paid for referring their readers to products on Amazon.com.

“When your visitors at the website click through and buy the products from Amazon, Amazon gives you a little commission typically about four to six percent,” said Aaron Hall, an attorney and CEO of Thompson Hall Santi Cerny & Dooley.

Hall represents lots of bloggers who are threatening to move to Wisconsin to avoid losing money.

Minnesota law says whenever a business has a physical presence in the state, it is entitled to take sales tax from them.

The new law now considers these bloggers physical storefronts for Amazon.

“Because they have presence in Minnesota, Minnesota is claiming it has a right to tax Amazon on all sales of Amazon in Minnesota,” Hall said.

In order to get around paying millions in taxes, Amazon sent a letter to its affiliated Minnesota bloggers, telling them in that 15 days they will no longer make money from Amazon.

“I understand their concern,” said Revenue Commissioner Myron Frans. “They have been making a living working in Minnesota working on behalf of Amazon.com.”

Frans says other companies pay the tax and that the state is frustrated Amazon is making a decision that forces some people to leave the state or close down shop.

Frans supports the Marketplace Fairness Act, which would simplify taxes for online purchases.

“If Congress would extend that law to require all retailers whenever they are to collect a tax based on the destination then that would alleviate the problem and everyone will be on the same playing field,” Frans said.

Amazon also supports the Marketplace Fairness Act, which is working its way through Congress right now.

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