• February 2, 2010

    Breaking Teeth on Golden Eggs - Affiliate Marketing Taxation

    Once upon a time there was a hard working farmer with the strange but true name, The State of Colorado. His friends just called him Farmer Colorado. Through diligent labor, planting, tending and planning, Farmer Colorado built a strong and prosperous economy for himself and his kin folk. Alongside his fields of grains and corn, Farmer Colorado raised geese. Farmer Colorado was in fact known for having one of the densest gaggles of geese in the nation. One day, Farmer Colorado noticed that one of his geese had started laying one solid gold egg per week, along with the normal eggs she regularly produced. It took a few minutes for Farmer Colorado to wrap his head around his sudden and totally unexpected wealth. This goose not only continued to lay the odd golden egg, she began to lay them more frequently. Farmer Colorado found himself in the rare position of being a farmer who was financially flush. Revenues from the sale of golden eggs paid for the goose roost, a year's supply of Goosie Chow, and enough water to irrigate the roost and quench any thirst the entire gaggle of geese might have. A few months later, Farmer Colorado noticed several other geese had started laying golden eggs. Not only was the goose roost able to pay for its own upkeep, revenues generated allowed the roost to grow and diversify its output to develop new income streams. Farmer Colorado was able to expand the roost. He even developed a system by which other farmers could easily raise gold egg laying geese themselves. Almost a year into what was being called the Colorado Goose Roost Miracle, two of Farmer Colorado's cousins from the city dropped by the farm with their families for dinner. Though they had each inherited shares of the family farm when their father died, and each had covered their share when commodity prices were too low to cover costs, neither cousin had ever really taken an active interest in learning how the farm was run. They were however city smart and thus knew a lot about managing large sums of money. Since they both had business backgrounds, Farmer Colorado figured they would be interested in helping him manage the growing business of sharing his wealth. After all, one cousin worked selling mutual funds and the other held what appeared to be an enviable investment and real estate portfolio. The two cousin's side of the family had moved to the city from the farm ages ago and, like most city raised folk, they had only a vague notion of where eggs, milk, broccoli, steak and carrots come from. "Food comes from your farm", blurted one of the youngest of the city kids, clearly proud to show she knew where food comes from. "Mommy gets food from the store", her older brother immediately corrected. After dinner, Farmer Colorado invited his cousins to the Goose Roost to show them the six or seven geese who laid golden eggs. Amazed, the two started to drop hints about how they could benefit from their country cousin's good fortune. Farmer Colorado politely ignored the hints. Being sophisticated people, the cousins knew that their financial acumen seriously outweighed any ignorance of farm life. Eggs are, after all, simply basic commodities. When they got back to Denver, the two city cousins were excited. They had spied a pool of riches beyond their immediate imaginations and needed their piece of the action. Heaven knows, they had shares of the farm and had dutifully paid their share of the land taxes. "We have to get to the source", said one of the cousins. "I know how women work, and that goose is certainly not a gander. Women are born with all their eggs already developed. Ergo, those geese are full of golden eggs!" "If we get all of them now, we can invest a huge sum and make tidy profits from now until forever", said the second. "We can set up a fund for our farmer cousin and he won't have to work as hard." The first cousin agreed. "We have to get our hands on those eggs", he replied. "We'll go out there on Friday night and, when everyone is asleep, we'll gut the geese and take the eggs". The two cousins could barely contain themselves as the week wore on. Each talked over the other as they discussed their brilliant plan. Getting the golden eggs became, in their minds, the smartest thing they possibly could ever do. When Friday night fell, the cousins packed themselves into their SUVs and drove separately to the farm. They parked on the road, around the corner from Farmer Colorado's driveway. Quietly closing their car doors, the two gathered the tools they'd need to get the job done. One took a long knife, the other a gunny sack. Their plans were simple, generous, clever, and, like most really good plans, involved the slightest dash of subterfuge. "It's for the greater good" they whispered in unison as they tip-toed across the lawn on their way to the goose roost. As they entered, they could see the largest of the geese, the one their farming cousin had first shown them. That one was the first they grabbed. Remembering something he had seen on an episode of CSI, the first cousin snapped the bird's neck with a series of rapid wrenching motions. As feathers fell to the floor, the second opened the bird's stomach to get at the store of golden eggs. "Perhaps this one is tapped out", he said as his bloody hands traveled as far as the goose's gullet in search of even a tiny golden nugget. Dropping the dead bird, the first cousin reached for and twisted the neck of another goose. It too was found to be empty by the second cousin, as was a third, fourth and fifth goose. By the time the sun's rays were peering over the mesa to the east and all the geese were dead and gutted, neither cousin was an ounce of gold richer. There's a moral to this story, one the state legislature in Colorado should read. Colorado is about to pass an Affiliate Marketing Tax, one that might kill one of the strongest golden geese in the state's economy. The tax has already passed the house and is likely to pass the state senate on Thursday morning. The affiliate marketing sector has a wonderful and growing community in and around Denver. This community provides direct employment to thousands of Coloradans and hundreds of thousands of affiliates in Colorado and around the world. Chances are, the vast majority of legislators have little to no idea how their decision will alter one of the brightest points of light in America's small business universe. If you live in Colorado, especially in or around Denver, it's still not too late to make that call, write that email or personally visit your state senator.