[MichaelColey]

I've had this wrong. This is actually much better news. According to the TSB Memo (http://www.nystax.gov/pdf/memos/sales/m08_3s.pdf), the $10,000 Threshold to be considered a nexus is the cumulative sales TO NEW YORK CUSTOMERS generated BY NEW YORK AFFILIATES (not all affiliate sales by NY affiliates).The cumulative gross receipts from sales by the seller to customers in New York State as a result of referrals to the seller by all of the seller’s resident representatives under the type of contract or agreement described above total more than $10,000 during the preceding four quarterly sales tax periods. (Sales tax quarterly periods end on the last day of February, May, August and November.)If you assume that 6% of affiliates and 6% of customers are in NY (and that the NY affiliates aren't specifically targeting NY customers), about 0.36% of affiliate sales should be from NY affiliates to NY customers. (NY is about 6% of the US population, so that's why I used that number.) That's means you need about $2.7 million in annual affiliate sales before you hit the $10,000 threshold. For the typical merchant with 10-20% of sales coming from affiliates, that's probably $10-$25 million in total annual sales. Of course it could be different if you have a concentration of NY affiliates or customers, but I think the reach is much less than I had previously expected.

[Rhea]

So -- am I getting this right -- the companies most likely to have to collect taxes under this law are mega-retailers like JC Penney, Home Depot and other big box stores. Which is good news for me because I don't work with big box stores.

What a bookkeeping nightmare this will be for merchants. Why does the phrase "undue burden" seem relevant?

[Kevin]

I was thinking the same thing Rhea. Further, does this mean that NY will no longer have the "Use Tax" field on our annual returns? Am I, as a consumer, responsible for knowing exactly where I have paid taxes, and where I haven't?

The short answer is that of course I'm responsible.

The long answer is that NY is making it very easy for me to overpay my taxes. Not sure that's right either.

[MichaelColey]

So -- am I getting this right -- the companies most likely to have to collect taxes under this law are mega-retailers like JC Penney, Home Depot and other big box stores.Those retailers probably already have a physical presence and probably already collect sales.

This would affect bigger online-only merchants, like Amazon, Overstock, etc. It would also affect mid-sized and some small ones. $10-$25 million in sales really isn't a lot. And really it just takes a single NY affiliate generating $10K in NY sales to hit the threshold. Customers signing up as affiliates to get a commission could also skew this.

[Kevin]

Michael's last post there is exactly why the NY legislature referred to it as the "amazon tax" when discussing it on the floor.

[elbowcreek]

Hmmm, so is this something we should expect from 49 other states?

[sunnypi]

Thanks for clarifying Michael, I've read over the document about 25 times and somehow didn't pick up on that part of it. Makes a bit more sense now.