New York Collecting Sales Tax from Affiliates?

Posted by admin in April 19th, 2008

A serious post concerning the possibility of affiliates sales tax collection for affiliates based out of New York recently went up (April 17th 2008) on the internetretailer.com website. Due to the downtrodden economy Gov. Eliot Spitzer of New York revived a plan to enhance New York’s tax revenue. Much of the buzz online considered that once Mr. Spitzer was out of the scene that this plan would eventually die down and fall to the way side. However, Gov. David Paterson is expected to sign the budget bill, making it effective June 1, according to the state budget office.

The bill which is expected to be passed June 1 is an effort to raise $50 million in tax revenue from online retailers; the fear here is that other states might also consider increasing internet sales tax collections to extend to affiliates collecting sales via their online sites and or properties within their respective states.

“The provisions would amend a sales and use tax law on the books since 1965. That law requires New York state residents who purchase items outside of the state to pay New York a “use” or sales tax if they were not charged sales tax in the state of purchase. Following similar procedures in other states that charge sales tax, the law also requires out-of-state retailers to collect and remit sales tax on products sold to New York residents if the retailers maintain a physical presence, or nexus, in the state.” (internetretailer.com)

“New provisions proposed for a New York State sales tax law, if signed by the governor, would require online retailers based outside of the state to collect and remit sales tax on customer orders received through affiliate web sites based within New York.” (internetretailer.com)

Linda Buquet at 5Star heralded an important comment that other states might be caught up in a ripple effect and impose sales tax collections from affiliates as well. Her full post can be seen here. Affiliate sales tax is a topic which will concern any affiliate in the affiliate marketing space and is causing a great deal of discussion amongst community members. InternetNews has an incredible post concerning this issue which they as well as others online are calling the “Amazon Tax” due to Amazon and it’s affiliate program being the nexus for the revival of the tax plan.

This is a matter that the affiliate community as a whole could be impacted by. As the industry grows more attention from big brother concerning how they can grab their piece of the pie will be inherit with that growth, we can only hope that if this bill passes it will stop with New York.
Internetretailer.com full article can be viewed here