Overstock.com Terminates All NY Affiliates

Posted by in May 14th, 2008

In my Revenew’s post on April 18th, 2008 - Read here I spoke of a serious post concerning the possibility of an affiliate sales tax collection for affiliates based out of New York that 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 which would if allowed begin on June 1st of 2008. In short the claim is that any company who has an established nexus of affiliates in NY that are collectively or individually making more then $10,000 in sales per year requires the merchant to collect sales tax from those affiliates.

I am not an accountant but from what I am understanding and according to WebProNews writer Mike Sachoff who wrote on May 6th 2008, “Online retailers doing business in New York will be required to register with the state beginning June 1, 2008 to collect taxes, or face audits for prior quarters for failing to register.” Read article here

On Friday May 2, 2008 , as written in The New York Times Amazon filed a complaint in State Supreme Court in Manhattan objecting to the law, which was approved as part of the $122 billion state budget that Gov. David A. Paterson has already signed. To make matters worse - TEXAS is also considering implementing a similar tax on affiliate sales - the post can be viewed here

The discussion concerning thoughts surrounding the NY affiliate or Amazon tax as it is being called via major news publications continued heartily at the most highly populated affiliate forum AbestWeb.com, the posts can be viewed here. Today in AbestWeb.com the most popular affiliate forum in the known world, NY affiliates are posting emails and alerts they are receiving from Overtock.com concerning the affiliates being dismissed from the Overstock.com affiliate program based on the fact that they reside in NY. Read the post here.

It is times like these when services such as www.EarthClassMail.com and out of state web hosting companies become very popular for New York affiliates. What will be interesting is watching the New York tax system attempt to identify and track affiliate sales from, uh, affiliates who reside in New York…. So whose responsibility will it be to determine and prove affiliate residency? The affiliate network? The merchant? New York State tax agency?