In the past, I have urged you to be brave, and get involved in your community, both online and offline. Then a couple of days ago I posted a tweet on Twitter, after I had read this in our local paper: Hawaii lawmakers send governor bills to tax Internet transactions
If you are in another state or country, Google/search for it: Pretty easy to find.
Streamlined Sales Tax Project (SB1678 SD3 HD1 CD1) —
Allows Hawai'i to join 23 other states to simplify tax laws and
encourage retailers to collect and pay state sales and use taxes.
Requires federal legislation.
Internet general-excise tax (HB1405 HD2 SD2 CD1) —
Imposes the state's 4 percent general-excise tax on Mainland retailers
that establish an economic nexus in Hawai'i through local Web sites.
"Several local Web entrepreneurs have also urged Lingle to veto the
bill, arguing it would handicap the growth of Hawai'i's online business
and media industry.
Local Web sites can become affiliates of
retailers like Amazon.com or sign up with brokers such as LinkShare,
which connect local bloggers and publishers with advertisers. Local Web
sites receive commissions when customers follow links to Mainland
retailers and buy products or fill out surveys and become future leads.
Takamine, president of Synertech Media, an online marketing firm in
Honolulu, said that if the bill becomes law, many Mainland retailers
will drop affiliate marketing in the Islands.
"Basically, what they'll do is they'll just kick off all Hawai'i advertising affiliates," he predicted."
Well, his prediction has come true.
Is this constitutional?
I have a personal interest in these bills as an independent businesswoman who leverages the internet within my own business (Ho‘ohana Publishing ring any bells?). I received a letter from Amazon.com this morning stating my account will be canceled with them on July 1st. They consider these laws an "unconstitutional tax collection scheme."
What that means to you, as part of my Ho‘ohana Community, is that you will no longer be able to buy Managing with Aloha from Amazon.com, AND I will no longer be able to offer you my other recommendations in the ease of the SLC Store and the JJL Store. It seems unlikely that I will have the option of opting out of their affiliate program so I can keep the aStore convenience of supporting books sold by others in our community – and in other states (i.e. even if strictly as a non-commissioned storefront). Amazon.com writes that as of July 1st,
"…we will have to terminate the participation of all Hawaii residents in
the Amazon Associates program on or before that day [the Hawaii law takes effect]. After the
termination day, we will no longer pay any referral fees for customers
referred to Amazon.com or Endless.com nor will we accept new
applications for the Associates program from Hawaii residents."
Walking my Talk
Will I comply with the law? Yes, I am a law-abiding Hawai‘i citizen. However I am very disappointed. The constitutional question aside, I don’t think that either the Streamlined Sales Tax Project (Bill SB1678) or the Internet General-Excise Tax (Bill HB1405) make much sense, economic or otherwise.
This is one of those times however, that simply being “disappointed” doesn’t cut it.
There are other Hawai‘i websites which have composed form letters you can copy and send to the governor, but I doubt this will help for two reasons:
- Form letters largely are ignored (when did you last read or respond to one?). You need to write a personal one to better your chances, and even then you have to hope they will read it.
- We are a Democratic majority State with a Republican Governor, and should she veto these bills, it is highly likely both the House and Senate will move to override. (Tell me again how our government two-party system is not broken?)
When laws affect you, think about your own personal circle of influence. Who do you know, and how can you get heard?
This is the letter I sent via email to my House Representative, my district Senator, the Speaker of the House (and yes, in the spirit of full disclosure, Speaker Calvin Say is my brother-in-law: I am married to his younger brother), Senate majority leader Colleen Hanabusa and Governor Linda Lingle. I will be printing them and mailing paper copies as well, and thanks to the power of citizen publishing on the internet, I hereby publish it on Talking Story with links inserted in the hope that SEO-savvy Google Alerts work better than flooded inboxes.
I hope they don’t move to tax my blogs next….
12:45pm Update after a bit of Twitter talk-story:
To be clear, this is not about a loss of affiliate advertising revenue for me. You will notice that my websites are all advertising free, with the exception of the Amazon.com aStore as a convenience and in support of the other authors in our Ho‘ohana Community. I usually don’t make enough referral income to even cover my monthly internet access bill, and this is how my affiliate income, though modest, is used: The JJL Literacy Project.
My concern with losing the partnership of Amazon.com and other internet retailers, is about the loss of the storefronts, for we are already at a significant distribution disadvantage in Hawai‘i, and our options for promoting Made in Hawai‘i products are severely limited.
Think about this as a Hawai‘i consumer: How many times have you wanted to make a purchase over the internet for something not available here in the islands, only to get to your cart check-out and get the message that, “We are so sorry, we cannot ship to Hawai‘i.”
———- Forwarded message ———-
From: Rosa Say
Date: Fri, Jun 26, 2009 at 8:38 AM
Subject: Fwd: Amazon.com is critical to my income! Please veto Bills SB1678 and HB1405
To: email@example.com, firstname.lastname@example.org
Cc: email@example.com, firstname.lastname@example.org, email@example.com
As one of your constituents on the Big Island, I have sent the email below to Governor Lingle. If we are so blessed as to have the governor veto these detrimental bills, PLEASE do NOT push or vote for an override of her veto.
The Hawai‘i legislature continues to make disastrous errors in supporting our self-sufficiency as small business people or solo entrepreneurs (large business is all but impossible). The reasons are numerous, and this is another disastrous blow.
If you scroll below you will see that Amazon.com’s threat to discontinue business with us in Hawai‘i is not an idle threat – they are not even waiting for the 7/15 veto deadline – and I expect that I will hear from Barnes & Noble soon as well. Other retailers will soon follow, and if passed, these ill-conceived laws will not generate any income anyway – all you will have achieved is solidifying our reputation as an anti-business, anti-common sense State.
Further, business people like me – who already generate whatever cash flow you now have in our State budget – will be forced to consider moving, and you will lose ALL the taxes you now pile onto my income generating capacities. I have never entertained this thought before, but I am now an empty-nester whose children have also felt they are forced to live elsewhere with the "price of paradise" too far out of reach, and with the legislative support of Bills SB1678 and HB1405 the time has come that I am actively exploring my options.
I am 55 years old, I have lived here all my life, and I have never collected a single welfare or unemployment check – not a one. Over the years I have felt like a fool for being a law-abiding citizen as I've added up the ludicrous amounts I have paid in taxes because I live in Hawai‘i, however I have done so feeling that I wanted to support our efforts to improve. I put my faith in you, and in your colleagues in the legislature.
I have sought to help you in my own circle of influence: For 30 years as a hotel executive, and now as an entrepreneur and leadership coach, verbal columnist and widely distributed author, and I love Hawai‘i – deeply. If you need any proof of my sense of place, or my profound aloha for these islands, please walk into your nearest bookstore and skim through my book, Managing with Aloha. Talk to any of my clients or my readers within the Ho‘ohana Community.
I have worked full time since I was 15 years old, and since the current recession has obliterated my retirement funds I cannot give you more than the 40 years of income taxes I have already given you, AND have you strip away my future marketability in the rest of the United States!!! I have to work on my own self-sufficiency since I am getting so little help from commonsense business laws supporting free enterprise, and sadly, Hawai‘i may not be the place I can do so.
Should this come up for discussion in the legislature again, you are free to quote me.
With much aloha, and much hope in your leadership initiative and bravery,
Ho'ohana with me, and Manage with Aloha.
Letter to Governor Lingle
Letter from Amazon.com