ASE09 Session: Advertising Tax Impact (Trisha’s Take)

Posted on Aug 10, 2009 in Affiliate Marketing, Conferences & Networking |

As you noticed, Dominic already posted his notes on the session, but here’s mine!  Session Description: Discussion on the Advertising Tax by industry leaders that have played a key role in organizing industry advocates and educating legislators on the impact of state tax nexus legislation.  The panel consisted of:

I thought it was well done.  Unfortunately there weren’t nearly as many people there as should have been.  Hopefully they’ll read this and know that they need to get informed before their business is blindsided with these tax issues.

Bullet Point Review!

  • The use tax system really doesn’t work right now, hence why states are looking to tax online retailers.
  • All this involves Nexus.
  • If you make a commission on a sale, you’re affected.  Period.
  • There’s a lot of misinformation out there – we’re trying to inform reporters enough to make them care about what’s really happening.
  • There’s a different between an affiliate company and affiliates, which is somewhat difficult to properly explain to legislators.
  • This is putting thousands of individuals out of business.
  • We need to keep politics out of it – it’s not a Democrat or a Republican thing.
  • SSTP (streamline sales tax project) not going to save us.
  • It’s GOING to happen – don’t think you’re safe.
  • This year it’s been introduced in 9 states – stopped in 7 of 9 (not RI or NC)
  • Be sure to work with like minded people to get things done.
  • It helps to have an internal advocate who knows the system’s ins & outs (a lobbyist or lobbying organization).
  • The viral-ness worked well to defeat the bills.
  • The CA bill would have passed had we not shown up, so it makes a BIG difference to stand up and help and make your voice heard.
  • When talking to legislators, there are a few things to remember:
    • The term “affiliate” is very confusing, but they understand advertising and small business owner.
    • Don’t say you’re going to move out of state – if you do, you’re no longer their problem, so they don’t care.
    • Keep your analogies simple – don’t get too technical or use jargon they won’t understand (CPA, PPC, SEO, etc).
  • There are ways around it in New York
    • First you have to meet the minimum sales threshold, so if you don’t make that you’re not affected.
    • You can rebut the nexus.
  • They haven’t yet found a way to rebut the nexus in Rhode Island and it’s too early to tell for North Carolina.
  • Merchants can just charge tax to keep affiliates – but it is something they have to start working on NOW in the back end to avoid being blindsided.
  • Affiliates need to prepare your business for it and keep lines of communication open.
  • Solutions: retain a sales and use tax attorney and understand the law as best you can.
  • DO NOT: incorporate your business in another state, use a false address, follow advice of someone who’s unlicensed, follow advice of a lawyer for another party, or try to circumvent the law.  Working within the law is your best option.
  • Being shady brings a bad name to the industry – your rep and the industries rep is under scrutiny

There was no time for a Q&A session because of all the awesome information they jam packed into that session.  It was really great and I’m still just sad to see that more people weren’t there.

Please help by spreading the word about what’s being referred to as the Advertising Tax! And for your pleasure, here’s the presentation:

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