‘Amazon tax’ has not generated revenue

(Page 2 of 2)
PBN PHOTO/MATTHEW HEALEY
DISCONNECT: Owen Johnson, managing partner of Betaspring, runs a site called Connect Providence, which was previously an Amazon affiliate.
Posted 12/21/09

But the state law has done nothing to increase tax revenue. Officials at the R.I. Department of Revenue “do not believe that there has been any sales tax collected as a result of the Amazon legislation,” said Paul L. Dion, who heads the department’s revenue-analysis office.

For a company like Amazon, there is little risk in pulling out of Rhode Island, which has the nation’s fourth-smallest state economy, said Lee Hower, principal at Point Judith Capital, a Providence-based venture capital firm. But affiliate marketing is a “very common” component of many Web startups’ business plans.

“Amazon doesn’t care,” Hower said. “The only thing that Amazon has changed because of this policy is they’ve stopped paying companies in the state. … The reality is we haven’t gotten the revenue or the policy benefits out of this, but we do have this downside.”

Angus Davis, a tech entrepreneur who lives in Providence, said the law should be called an “affiliate tax” since it has no impact on Amazon. “It’s really slamming the door shut at the borders of Rhode Island to any kind of online advertising industry,” he said.

Lydia Walshin, who lives in Scituate, depended on Amazon affiliate marketing to monetize her cooking blog, ThePerfectPantry.com. After Amazon cut off its affiliates, Walshin moved her operations to Massachusetts, where she also has a home and a bank account, and Amazon had her back up and running within 24 hours.

Owen Johnson, on the other hand, was earning “small, but growing income” from his personal blog and a site he runs called Connect Providence as an affiliate before Amazon ended the program here. Now he is wondering whether to move his business out of state. “You’re creating an environment of uncertainty in which to do business,” he said. •

Previous Page
Calendar
PBN Hosted
Events

See the List of 2014 Winners. And save the date - September 10th - for the 3rd Annual Fastest Growing & Innovative Companies program at Rosecliff Mansion in Newport.
  • Healthiest Employers
    Thank you to all who attended the 3rd Annual Healthiest Employers Luncheon today ...
Advertisement
Purchase Data
Book of Lists
Lists
Book of Lists cover
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.
Data icons
Data can be purchased as single lists, in either Excel or PDF format; the entire database of the published book, in Excel format; or a printed copy of the Book of Lists.
  • Purchase an e-File of a single list
  •  
  • Purchase an e-File of the entire Book of Lists database
  •  
  • Purchase a printed copy of the Book of Lists
  •  
    National
    Local
    Latest News
    Advertisement