Affiliate Tax Issues

[helpingmoms]

More big developments in the affiliate tax issues. Today Amazon dropped all Colorado affiliates because of recent legislation that did not even mention affiliates! Here's a recent post that I did in case you haven't been following what is going on across the various states:

Help Fight the Advertising Tax

The issue is on the table in one way or another in California, Illinois, Georgia, and Maryland. Iowa, Nevada, Colorado, and Vermont also dealt with it this year.

Have any of you been involved in any of the letter writing campaigns or meetings? Are you in states that are currently battling it?

[greenmama07]

I just found out CT is considering the law again. I can't believe this. Just when I start to get the ball rolling and now I don't know if I should even bother. Will all affiliate programs eventually stop. I keep hearing that once one state passes it others will follow.

I still don't even understand the Law. Is if for the company that offers affiliate programs? As an affiliate I wouldn't be directly selling anything or taking payment so I can't see how I would have to pay sales tax. I understand paying income tax b/c you don't "officially" work for the company you affiliate for.

This is crazy and confusing!

[melovemoney]

I don't understand that law either...at all. I think an accountant would be the best person to ask about this, I have no idea.

[helpingmoms]

Originally Posted by greenmama07

I just found out CT is considering the law again. I can't believe this. Just when I start to get the ball rolling and now I don't know if I should even bother. Will all affiliate programs eventually stop. I keep hearing that once one state passes it others will follow.

I still don't even understand the Law. Is if for the company that offers affiliate programs? As an affiliate I wouldn't be directly selling anything or taking payment so I can't see how I would have to pay sales tax. I understand paying income tax b/c you don't "officially" work for the company you affiliate for.

This is crazy and confusing!

You don't actually have to pay anything. It only impacts the merchants and determines whether or not they have to collect sales tax on purchases in your state. Some merchants refuse to collect the sales tax (either because it is difficult administratively or would increase what the customers are paying and hurt their sales). As a result, they would rather drop all affiliates in that state and continue making sales.

This will NOT affect all affiliate programs. Chances are good that if you are promoting merchants who already have a brick and mortar in your state (Best Buy, Sears, Target, etc), it will not impact you at all. If you are promoting out of state merchants or Amazon, it will impact you the most.

Every affiliate marketer should be signing up on the PMA website to be sure that you are informed about what is going on in your state because it is changing on a weekly basis. I'm not even in a state that is impacted but I keep watching because you never know when you might have to jump into it.

[LilBlackDress]

Thanks for this post. I understand Maryland had a meeting on this tax issue but can't find the results. Any ideas?

[helpingmoms]

Originally Posted by LilBlackDress

Thanks for this post. I understand Maryland had a meeting on this tax issue but can't find the results. Any ideas?

Yes! They did have a hearing on Wednesday, but it has not gone to a vote yet. The vote is scheduled to come in the next week. Here is where I go for updates:

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