Twitter musings

I have not blogged about Twitter in a while and actually had an interesting experience today that I wanted to share.  First some perspective.  I got on Twitter in 2009 and currently have a little over nine thousand followers.  If someone follows me, I will usually follow them back.  The exceptions are accounts that are obvious spam accounts or ones that seem to promote questionable content.  Even considering that screening criteria, you will probably find some spam and some questionable tweeters that I follow, because generally I just follow anyone that follows me.

Ok I get that Twitter started out as a tool for people to connect with their friends and family and share all their intimate episodes of their lives, but we all know it has been overrun with folks marketing.  With all due respect to the Twitte purist who would like to drag it back to its roots, marketing is why I am there.  You might also like to know that the first year I was on Twitter, I picked up 6 new clients who specifically found me on Twitter, so the marketing part of it does work.

Back to the following and being followed part.  I guess there are folks who judge the value of your Twitter account by the ratio of followers to people you follow.  If you have significantly more followers, it is supposed to indicate you are popular and maybe even stand a chance to monetize your Twitter account. Think Justin Bieber (I just checked and he has almost 27 million followers and he follows 123,000 people himself)  To me that seems natural and fair.  The ones I don't like are the folks that are trying to game the system.  They will follow you and then turn around and unfollow a day or so later and hope to get their follower count up.  I am pretty sure the 27M folks that follow Justin did so organically because they care desperately about everything he does.

The other folks are banking on the fact that most people will follow someone who follows them and also that most people will not take the time to unfollow people.  Not me.  I use a site called Friendorfollow all the time to find the folks who I follow that don't follow me back and I promptly unfollow them.  I know the very few people that I have consciously chosen to follow with no expectation that they will follow me back and everyone else better be listening to me if they want me to listen to them.

I am certainly not a purist about Twitter.  I use it to market my CPA practice, I am not that great about following what my friends and family post on there and I am certainly not going to lock my account, but for some reason it does bug me these folks that are trying to boost up their followers.  You can say that there are bigger problems in the world than Twittersnakes (what I call them) and I would agree, but they bug me for some reason.  Hey two months in a row now I have been selected as #1 of the top 100 accounting experts to follow on Twitter. (sorry had to work in a little self-promotion), so I think maybe I have good stuff to say on Twittter and people would benefit by listening in.

Anyway here is the point of my tale.  I joined a professional organization (I'm not saying which one) related to my accounting/tax profession.  It was a trial thing and I thought it might be beneficial.  I guess I would categorize my feelings about this group as lukewarm.  They have some good resources and while they don't give me particularly high value information and networking, I did think there was some value there.  Given that my trial membership expires the end of this month, I was on the fence if I should renew.

Then a few days ago, they follow me on Twitter.  It is such a small thing, but still you feel a little pride when a national professional organization that follows your own profession chooses to follow you, so it felt kind of nice.

Today I log onto FriendorFollow and guess what?  The professional organization, has un-followed me.  I go and look at their account and it would appear they are a bunch of Twittersnakes!  They seem to follow and then un-follow accounts and actually have about 22K followers and only follow about 3K.  Guess what, my opinion of them changed immediately .  They just lost the chance to get my renewal money over a tiny insignificant thing like un-following me on Twitter, but that is how it works when you sell something.

Are you doing anything that drives away customers or clients, maybe something you don't even consider important?

Amazon Tax

States across the US are dealing with budget shortfalls and a popular new law that seems to be spreading is what the New York Post has called the "Amazon Tax". To help understand the concept, let's start with Max who lives in California and wants to buy a new flat screen television. Max goes down to Walmart, finds the perfect TV and pulls out his credit card. Included in the purchase prices of Max's new TV is sales tax which Walmart collects and sends on to the state of California.

In fact in 2008 just over 26% of California's total state revenue came from sales tax. Suppose Max thinks better about the purchase and instead goes back home to search for televisions online. Max in fact finds the exact same TV online at Bob's television and pet emporium in El Paso Texas. Since Bob is in Texas and Max is in California, Bob does not charge Max sales tax, because Texas, like every other state, does not require companies to collect sales tax on items that are sold outside of the state.

Now technically Max is required to report his purchase to California and pay the sales tax that he would have paid if he had purchased the TV at Walmart. Of course Max is probably not going to do that, because nobody else in California or in any other state does it. California doesn't like it, but they don't really want to track down every Max who buys a TV and hound him for sales tax. The state would much rather go after Bob who sells a 100 televisions a month to California residents and make Bob pay the tax on the TVs he ships into their state. Essentially it is much easier to collect tax from Bob, plus Bob doesn't get to vote in California elections, so who cares if he's mad at state government.

The only thing Bob has going for him is a legal concept called nexus. Nexus basically means that Bob doesn't have a business presence in California, so California has no legal right to require him to collect or pay tax to their state.

What the Amazon tax is attempting to do is expand the concept of nexus. Let's say Sue promotes Bob's TV business by advertising on websites or any other way she can to get people to buy televisions from Bob. In return Bob pays Sue an affiliate commission for every TV sold within 200 miles of her home, which happens to be in

Garden Grove, California. Sue doesn't work for Bob, she is and independent business person who just promotes Bob's business. Through the Amazon tax what California wants to say is Bob has nexus in the state because of his relationship with independent business person Sue.

So far New York and Rhode Island have passed Amazon tax laws. North Carolina has said it will pass the Amazon tax, possibly as early as July. California, Connecticut, Florida, Hawaii, Illinois, Maryland, Minnesota and Tennessee have all indicated they are studying the possibility and have proposed laws in their legislatures now.

I am not sure how Amazon.com feels about having a tax named after their company, but they have certainly been playing hardball with states that pass the tax. When New York and Rhode Island passed the tax, Amazon sent letters to all of it's affiliates in those states telling them Amazon would no longer be paying commissions to or signing up affiliates in those states. According to 5Star Affiliates, the last week of June the same letters went out to North Carolina and Hawaii affiliates.
The impact for the states, at least in regards to Amazon affiliates, is not only does the state not get the sales tax, but they loose any income taxes on Amazon commissions, that were being paid by the affiliates in their state. Overstock.com is another major online retailer that has followed Amazon in cancelling affiliate programs.

Obviously Amazon is in a unique position that they could be hugely impacted by having to collect sales tax for every state and they can probably afford to push back by dropping affiliates in specific states. It is too early to tell who will win in this game of chicken. As recent as July 2 the governors of California and Hawaii both vetoed Amazon tax bills presented by their respective legislatures. It appears that right now many states, and many other companies with affiliate programs are choosing to sit on the sidelines and watch Amazon and Overstock battle it out with a few states to see which side is winning, before they jump into the war.

The tax will not impact advertising revenue earned by bloggers and websites, as it is directed at sales tax which is typically charged on products. You will be affected if your site directly markets products for out of state vendors earning commission on items sold.

Online E-tailers, EBay sellers and anyone who ships products to out of state customers be sure you keep good records of where your income is generated.