June is here, which means the “Amazon Tax” law, as it’s been dubbed, is now in effect. Merchants with affiliates residing in New York state will now have to charge tax on orders of customers in New York. In short, the state of NY has decided that affiliates constitute nexus, i.e. a term used to describe whether a business has sufficient presence or activity in a state or other taxing jurisdiction to become subject to the tax(es) of the state or jurisdiction. So now in NY state online retailers with affiliates residing in that state have to charge tax, regardless of where their corporate headquarters actually are. Some good links that explain this better than I ever could are to TechCrunch’s May 14th post and Scott Jangro’s May 22nd podcast.
So many of the larger online merchants with a large number of affiliates in NY have made the decision to drop their affiliates who reside in NY. The great folks over at ABestWeb.com Affiliate Forums have kept a running list of the merchants who’ve dissed their NY affiliates. So if you’re from NY, be aware that these merchants may not approve your application if you apply in the near future.
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I only wonder how long it will take NJ to follow in the steps of NY legislators.
I'm not too familiar with NJ's history of following suit to what NY does law wise, but from everything I've read it seems that the larger states (like my home of CA) are more likely to follow suit first.
Wonder how long it will take them to figure out they're loosing income tax from affiliates in exchange for the tax from merchants?
True,
I wonder if any supper affiliates are sizing up an island to move to.