Taxing Issues

Beginning on June 1 the state of New York will start charging taxes for online transactions to companies that have no physical presence in that state. There has been a lot of discussion about this issue, how it impacts affiliates and merchants, and whether or not these regulations might be adopted by other states.

All the parties impacted by the statute seem to be taking a different approach to the issue.

Amazon came out swinging earlier this month by filing suit against the State of New York. Amazon’s complaint argues that the statute is “overly broad and vague.” It is impossible, Amazon wrote, for it to determine which of its affiliates are actually in New York State. Amazon says that its affiliates are not agents, but simply sites on which it places advertising. The commissions it pays the sites are simply one method of paying for those ads, it argues.

Another big online merchant, OverStock.com, has taken a very different tact and instead dropped all its New York affiliates, which caused an uproar within the affiliate community.

Performance network Commission Junction earlier this week sent an email notifying its affiliates that CJ is actively “monitoring the law and will use reasonable efforts to protect ourselves and our publishers as we deem appropriate.” ShareASale is making a report available to merchants regarding their New York affiliate-referred transactions.

LinkShare is going to be participating in a conference call with the Direct Marketing Association to discuss the issue. The call, which takes place Thursday, May 22 at 11am (eastern), will include DMA Tax Counsel George Isaacson, who will provide an overview of the bill. Email government@the-dma.org to receive personalized dial in information. Let them know you are a member of the LinkShare Network.

No word from Performics yet on how they are dealing with the issue.