The Rutherford Data Center should be built in Forest City, North Carolina, to be exact, at the site of a former Mako Marine building.  Facebook purchased 150 acres from Rutherford County for $3.1 million to make this happen.

As for what sort of timeframe Facebook has in mind, March of 2012 has been set as the target date for the facility’s completion.  Meanwhile, the company expects the construction work will provide jobs for 250 people, and the finished data center should employ between 35 and 45 individuals on a full-time basis.

That last fact may not sound impressive, but North Carolina Congressman Patrick McHenry is rather pleased with the whole arrangement.  In a statement, he said, "Facebook’s success has brought them to Forest City to make a great investment in this community.  These are the jobs Western North Carolina needs to push forward in an economy increasingly dependent on new technologies."

Anyway, a little more information (along with a smattering of photos) is available here if you’re interested.

One last thought: this announcement may signal that Facebook has something very interesting up its sleeve.  Since the site already has over 500 million users and works just fine, a second brand new data center seems a little hard to explain in terms of some new profiles here and there.

The state said it will waive all back sales taxes and penalties for online retailers that sign an agreement by August 31 to start collecting sales tax.

An initiative called the Internet Transactions Resolution Program is the result of discussions between the department and a number of ecommerce retailers.

"We are going to be asking quite a number of them to participate in the program," said revenue Secretary Kenneth Lay. "We have positive indications that several will sign up."

Any retailer that did not register for sales and use tax as a result of an affiliate program in North Carolina at any time is eligible to participate in the program. Retailers may resolve their prior tax liability by registering for sales and use tax and agree to collect and pay those taxes for four years, beginning September 1.

The program begins today and retailers have until June 30 to register for the program. Retailers who do not register will be subject to taxes, penalties and interest.

Amazon says in its complaint, that in December North Carolina requested information on sales to customers in the state between August 1, 2003, and February 28,2010, as part of its audit. The company said it turned over information to the sate to meet the request, including product codes for every item purchased. Amazon said it did not provide the "name, address, phone number, email address or other personally identifiable information of any customer."

Amazon said it has "fully cooperated" with North Carolina, but it objects to turning over its customer’s personal information. In the filing Amazon added, "the DOR has no business seeking to uncover the identity of Amazon’s customers who purchased expressive content, which makes up the majority of the nearly 50 million products sold to North Carolina residents during the audit period, let alone associating customers’ names and addresses with the specific books, music, and video content that they have purchased during the past seven years."

Last year, North Carolina passed a law that required out-of-sate retailers to collect sales tax in the state if they have marketing affiliates. Amazon responded by ending its affiliate program in North Carolina and currently does not collect sales tax in the state.
 

What the North Carolina government is proposing would apply sales tax to purchases made through online affiliates based in NC. It has not yet passed.

Now NC residents have received an email confirming that they are indeed severing ties. Andy Beal at Marketing Pilgrim received one of the emails and shares it on his blog. It reads:

We are writing from the Amazon Associates Program to notify you that your Associates account has been closed as of June 26, 2009. This is a direct result of the unconstitutional tax collection scheme expected to be passed any day now by the North Carolina state legislature (the General Assembly) and signed by the governor. As a result, we will no longer pay any referral fees for customers referred to Amazon.com or Endless.com after June 26. We were forced to take this unfortunate action in anticipation of actual enactment because of uncertainties surrounding the legislation’s effective date.

Please be assured that all qualifying referral fees earned prior to June 26, 2009 will be processed and paid in full in accordance with our regular referral fee schedule. Based on your account closure date of June 26, 2009, any final payments will be paid by September 1, 2009.

In the event that North Carolina repeals this tax collection scheme, we would certainly be happy to re-open our Associates program to North Carolina residents.

Given that the tax law has not passed, it isn’t hard to understand why Amazon’s NC affiliates would be a little upset. A News-Record article that was picked up by Slashdot offers the following quote:

"Local affiliates say they were ‘blind-sided’ by the company’s action. ‘I got this e-mail at 4:30 this morning,’ said James Barrett, a technology consultant from Winston-Salem. ‘It wasn’t saying your account will be shut down. It said it is shut down. That just blew me up right there.’ Barrett said that he is frustrated at lawmakers for considering the tax, but equally aggravated with Amazon. ‘They’re trying to tick off all their associates and get them to call down to Raleigh,’ Barrett said. ‘I think that is pretty tacky. That’s not the way to use people who are referring business to your business.’"

So far, there is no mention of the North Carolina situation on the Official Amazon Association Blog.

We are writing from the Amazon Associates Program to notify you that your Associates account has been closed as of June 26, 2009. This is a direct result of the unconstitutional tax collection scheme expected to be passed any day now by the North Carolina state legislature (the General Assembly) and signed by the governor. As a result, we will no longer pay any referral fees for customers referred to Amazon.com or Endless.com after June 26. We were forced to take this unfortunate action in anticipation of actual enactment because of uncertainties surrounding the legislation’s effective date.

Please be assured that all qualifying referral fees earned prior to June 26, 2009 will be processed and paid in full in accordance with our regular referral fee schedule. Based on your account closure date of June 26, 2009, any final payments will be paid by September 1, 2009.

In the event that North Carolina repeals this tax collection scheme, we would certainly be happy to re-open our Associates program to North Carolina residents.

The North Carolina General Assembly’s website is http://www.ncleg.net/, and additional information may be obtained from the Performance Marketing Alliance at http://www.performancemarketingalliance.com/.

We have enjoyed working with you and other North Carolina-based participants in the Amazon Associates Program, and wish you all the best in your future.

Best Regards,

The Amazon Associates Team

It’s interesting that Amazon has shut the program down before the legislation passes. Could it be that the NC lawmakers thought Amazon was bluffing too? Did Amazon close the program early so that affiliates would still have time to ramp up their complaints to the General Assembly.

Of course, there are plenty of other companies that will keep their affiliate programs running in NC–though Commission Junction doesn’t appear to be one of them–but will there be enough actual affiliate revenue to tax after this?

Comments

We regret to inform you that the North Carolina state legislature (the General Assembly) appears ready to enact an unconstitutional tax collection scheme that would leave Amazon.com little choice but to end its relationships with North Carolina-based Associates. You are receiving this e-mail because our records indicate that you are an Amazon Associate and resident of North Carolina.

Please note that this is not an immediate termination notice and you are still a valued participant in the Associates Program. All referral fees earned on qualified traffic will continue to be paid as planned.

But because the new law is drafted to go into effect once enacted – which could happen in the next two weeks – we will have to terminate the participation of all North Carolina residents in the Amazon Associates program on or before that same day. 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 North Carolina residents.

The unfortunate consequences of this legislation on North Carolina residents like you were explained in detail to key senators and representatives in Raleigh, including the leadership of the Senate, House, and both chambers’ finance committees. Other states, including Maryland, Minnesota, and Tennessee, considered nearly identical schemes, but rejected these proposals largely because of the adverse impact on their states’ residents.

The North Carolina General Assembly’s website is http://www.ncleg.net/, and additional information may be obtained from the Performance Marketing Alliance at http://www.performancemarketingalliance.com/.

We thank you for being part of the Amazon Associates program, and we will apprise you of the General Assembly’s action on this matter.

Sincerely,

Amazon.com

Last time I checked, adding new taxes in a recession were a bad thing. Amazon is a huge retailer and many people–myself included–supplement their income using its affiliate program. If others follow Amazon’s lead, then what affiliate revenue will be left to actually tax? NC would still not have any tax revenue from affiliate marketing AND those making a living from affiliate marketing lose their income. Nice move NC….not!

If you’re one of those that will be affected, then you might want to contact your state representative (thanks Scott for that suggestion!)

Comments

Though their Dell lawsuit was thrown out of court initially, it has made it back to the state’s appellate courts. The Google suit names the search company, North Carolina’s governor and commerce secretary, and others.

Prospective jobs for the region would average $48,000 over the 200 or so people Google expects to hire for the datacenter. Once a furniture making power, North Carolina has been hammered by cheap imports, plant closings, and the subsequent loss of jobs.

Even with a relatively bright light of hope from Google’s proposal, the NCICL lawsuit filed on behalf of three complainants focuses on what the group believes is more important: overly generous tax incentives.

The group detailed these incentives in a June 2007 report, available at the NCICL website:

The project is anticipated to bring 200 jobs and a nearly $600 million investment in exchange for a 100% refund of business personal property taxes and a 80% refund of real property taxes for the next 30 years. The value of the incentive has been estimated as high as $165 million, over 40% of the value of all local incentives given out during the study period.

Of the 14 incentive packages approved in Caldwell County from 2004-2006, Google was far and away the most significant, comprising over 99% of the total awards.

A broader look at the impact of Google’s datacenter and its likely employment would provide a better view of whether or not the state gives up too much with its incentives. New workers will pay taxes on their earnings, property taxes when they buy houses, and sales taxes on their purchases.

That doesn’t even count the potential for business development to complement any expanded demands for commercial businesses. People need to eat lunch and buy gasoline, and someone certainly will try to meet those elevated economic demands in the area surrounding the datacenter.

You have to give to get, and North Carolina’s giving may result in a bigger gain over time. There are plenty of states that would eagerly make a deal with Google under these terms for that reason.

29,000 Sex Offenders Found On MySpace

North Carolina Attorney General Roy Cooper claimed as of July 2007, MySpace has discovered more than 29,000 registered sex offender profiles in its membership.

That figure is four times more than the original estimate MySpace made. As Cooper pointed out, this just accounts for the offenders who registered under their real names.

Many more could be present, registered under pseudonyms, or currently not known to law enforcement as sex offenders yet. Cooper also said a review of publicly reported incidents in media reports of crimes involving adults using MySpace topped 100 through the first six months of 2007.

Cooper wants MySpace to require parental permission for minors to register, and for the site to verify the person giving permission has the authority to do so. MySpace has resisted having such impositions placed upon its signup process.

Several states have pushed MySpace to verify the ages of members signing up for the service. Cooper cited how age verification is in use for alcohol, tobacco, movies, gambling, and financial institutions. He wants to see MySpace follow that example.

MySpace does not want to see its younger userbase threatened, but also resists such verification measures likely because they could push current and potential users away from MySpace to competing websites.

Sam Lagrone, a reporter for The News & Observer, states that HB 1587 “would sharply limit local governments’ ability to create their own telecommunications network,” and “would not allow local governments to use tax revenue to fund any kind of telecommunications utility.”

At first glance, that might not be too upsetting.  After all, tax revenue is already spread pretty thin in most places, and local governments (or those around Lexington, Kentucky, anyway) might not be the best choice to deal with cutting-edge technology.

But John Burchett, Google’s state policy counsel, explained some of the bill’s negative implications in a letter to the North Carolina House Speaker, and suggested that it “would prevent cities and towns from partnering with private telecom providers to establish broadband networks” (italics mine).

“HB 1587 threatens to undermine the establishment of such partnerships, particularly in rural and high-cost urban areas of North Carolina in which the state’s incumbent providers are either serving poorly or not at all,” Burchett continued.

Burchett’s not alone in his opinion; as mentioned earlier, several other companies (and a number of North Carolina towns and cities) agree with Google.  The search engine company has clashed with telecoms on a number of occasions, and it looks like this is one battle that it will win.

It may have been a little too intoxicating for officials in Caldwell County. Once an agreement with Google was secured to bring a computer center and a bunch of jobs to the area, the various numbers associated with this economic development became known.

That must have led to several people reading those accounts and spewing Cheerios across their computer monitors. The Charlotte Observer reported Google would receive three decades of forgiveness for state and local tax payments.

Estimates put that savings at $250 million, a figure the report called one of the biggest in the state’s history. Detailed incentives from the local area have not been released yet; what is known has come from state records, said the report.

The rush to rebuild the depressed economy may have persuaded local officials to skip an economic study, even though the state did one for a nearly $5 million job creation grant they provided to Google. That study found the grant should result in $45.3 million in state revenue over twelve years.

One can’t blame local officials for wanting to revive the area and keep the community from being relegated to a footnote. But they do need to make sure it isn’t a temporary revival. Thirty years is a long time to bet.

—

Add to Del.icio.us | Digg | Reddit | Furl

Bookmark WebProNews: