[Rhia7]

Swimsuitsforall.com sent me this e-mail:

I hope this email finds you well. As you may already know, the tax law of the state of New York was amended to require online retailers to collect sales tax for purchases to customers residing in the state of New York when these retailers have an existing relationship with an affiliate that resides in the State of New York. In order to abide by this new law, we are required to know the legal address of all the affiliates for our advertisers. We request that you navigate to http://publishers.bluecherrygroup.com and enter the appropriate information.

We are monitoring the developments of this law daily and we will not take any action until it is completely necessary. We do request for all of the NY based publishers to incorporate in NJ and reapply for all the affiliate programs. We will ensure that your exclusive marketing materials will be forwarded to your new publisher ID.

Please let me know if you have any questions or concerns.

[I bolded the above]
I have no intention of incorporating myself in NJ.

[Bill]

Can't understand why they would suggest incorporating in New Jersey - because that is one of the "other" 44 states with a Sales and Use Tax similar to that of New York. If New York "gets away with" enforcing the tax code, as they are interpreting it, then I am quite sure the other 44 will soon thereafter jump on the bandwagon.

[Rhia7]

I have no desire to incorporate myself at all :emoticon:

[HecticDMC]

I can't believe they have the gall to suggest that. If they want to keep their NY affiliates and not collect the tax, they should be fighting the law, not telling affiliates to make a major business decision and incorporate (which would NOT be advisable for a significant number of affiliates). Telling people they should incorporate, in any state, is extremely irresponsible.

[Rexanne]

If they want to keep their NY affiliates and not collect the tax, they should be fighting the law

Bingo - somone else besides Amazon has to help fight this battle. I'd love to see some proactivity from merchants at this point

[gamweb61]

Can't understand why they would suggest incorporating in New Jersey - because that is one of the "other" 44 states with a Sales and Use Tax similar to that of New York. If New York "gets away with" enforcing the tax code, as they are interpreting it, then I am quite sure the other 44 will soon thereafter jump on the bandwagon.
Delaware is the best state to incorporate in. Lots of companie use Delaware as their corporate address.

[Bill]

Delaware is the best state to incorporate in. Lots of companie use Delaware as their corporate address.That will be my choice - because I actually am in a situation where I need to incorporate by early next year. Coincidentally we will be relocating to southern Delaware in the fall. We recently contracted to have a new home built in a nice development less than 10 minutes from the beach.

This "move" is not reactionary to the NY tax mess. We had put down a deposit two weeks before the mess was made known. Sometimes ya just gets lucky. :D

On another note...We request that you navigate to http://publishers.bluecherrygroup.com and enter the appropriate information. It is a bit disconcerting that "they" also provided a form asking for a good bit of personal information - and have it on an insecure page. Actually, I find that hard to understand (being polite here). :(

[AffiliateHound]

My guess is that because Swimsuitsforall.com is located in NJ (http://www.swimsuitsforall.com/contact.asp), and since they thus would already collect sales tax for sales to NJ residents/delivery, they want affiliates in NJ so if other states pass similar legislation, they will still only have to collect sales tax on NJ sales.

[Rhia7]

My guess ... they want affiliates in NJ so if other states pass similar legislation, they will still only have to collect sales tax on NJ sales.

Doesn't customer location affect the taxation [not just affiliate location]?

[AffiliateHound]

Doesn't customer location affect the taxation [not just affiliate location]?Both come into play. They way the NY law is written, NY-based affiliates provide the nexus ("connection") requiring an otherwise "foreign" merchant to be subject to NY state sales taxes. If the merchant has such affiliates, and meets the threshold of $10,000 in NY sales, then they must collect the sales tax on all NY sales. If, for example, affiliates flock to Delaware, and then Delaware passes a similar law, these affiliates would then provide the nexus subjecting the foreign merchant to collect Delaware sales taxes on Delaware sales.

[Rhia7]

They way the NY law is written, NY-based affiliates provide the nexus ("connection") requiring an otherwise "foreign" merchant to be subject to NY state sales taxes. If the merchant has such affiliates, and meets the threshold of $10,000 in NY sales, then they must collect the sales tax on all NY sales.

"Affiliate N" happens to live/work from New York.
"Company C" uses a mixed group of affiliates including a number/proportion from NY such as "Affiliate N" in its business thus establishing the nexus as defined above.
What if "Company C" generates $9,500 in NY State sales [under the 10K threshold]? Some companies are "whacking out" New York based affiliates so quickly it seems as if the elimination based upon where the affiliate lives/works is being done prematurely. It seems as if the $10K has been forecast but that the sales have not yet been met or exceeded.

What if "Company C" creates products that are popular in New Mexico?
What if "Affiliate N" affiliates for "Company C" but the majority of sales are or could be outside of NY? What if a group of NY affiliates make less than $10K of sales to NY but do exceptionally well in other states that have not specified a convoluted taxation system?
As an affiliate and webmaster I know that my web visitors come from all over the United States and also mainly from the UK and Australia.
I may live in NY but there's lots of diversity in my visitor base.

NY affiliates seem to be quick targets for elimination by some companies utilizing affiliate marketing.
These companies will still run into problems if the companies have NY customers even if all the NY affiliates have been eliminated.

[Bill]

.......If, for example, affiliates flock to Delaware, and then Delaware passes a similar law, these affiliates would then provide the nexus subjecting the foreign merchant to collect Delaware sales taxes on Delaware sales.Ah....but there is no Delaware Sales Tax, nor a Sales and Use Tax. Only 45 of our 50 states have the Sales and Use Tax statutes.

Of course that's not saying they won't eventually institute such taxes. :(

However, Delaware (for instance) must do pretty well fiscally/financially. They have an income tax that is lower than what we currently have in Maryland and, when we retire, the first 25K of our retirement income will be exempt from that tax. Property taxes in Delaware are also very low. The condo we are selling (in Maryland) is taxed $3600 per year, but the house we are having built in Delaware, at the same value, will be taxed at only $800.

[Kevin]

Company C generating $9500 in NY sales is irrelevant, per the law. Unless Aff N and his/her NY friends generated them.

Make sure you read the entire legislation.

Your scenario is partially unconstitutional, and outside the scope of the NY regs.

[Rhia7]

Company C generating $9500 in NY sales is irrelevant...

I acknowledged that would be "under the 10K threshold;" my point is on the forecast of sales. Companies are eliminating affiliates based on forecasts.


Some companies are "whacking out" New York based affiliates so quickly it seems as if the elimination based upon where the affiliate lives/works is being done prematurely. It seems as if the $10K has been forecast but that the sales have not yet been met or exceeded.

[AffiliateHound]

"Affiliate N" happens to live/work from New York.
"Company C" uses a mixed group of affiliates including a number/proportion from NY such as "Affiliate N" in its business thus establishing the nexus as defined above.
What if "Company C" generates $9,500 in NY State sales [under the 10K threshold]? Some companies are "whacking out" New York based affiliates so quickly it seems as if the elimination based upon where the affiliate lives/works is being done prematurely. It seems as if the $10 has been forecast but that the sales have not yet been met or exceeded.

What if "Company C" creates products that are popular in New Mexico?
What if "Affiliate N" affiliates for "Company C" but the majority of sales are or could be outside of NY? What if a group of NY affiliates make less than $10 of sales to NY but do exceptionally well in other states that have not specified a convoluted taxation system?
As an affiliate and webmaster I know that my web visitors come from all over the United States and also mainly from the UK and Australia.
I may live in NY but there's lots of diversity in my visitor baseLinkshare used to have a report that showed sales by area of the country. I found it interesting that most of my LS sales came from far-off parts of the country. Similarly, I have an in-house program that has very limited reporting info, but they do show the city where each sale comes from. Most are not from CA.

NY affiliates seem to be quick targets for elimination by some companies utilizing affiliate marketing.
These companies will still run into problems if the companies have NY customers even if all the NY affiliates have been eliminated.I'm sure that so many merchants have taken this quick action because of the June 1 registration deadline. If a merchant exceeded the $10,000 over the last 4 quarters and they have NY affliates on June 1, they must register or be subject to back taxes, penalties and interest. The merchants axing NY affliates so quickly probably met the $10,000 threshold and do not want to have any NY-based affiliates on June 1.

[ProWebAddict]

On another note... It is a bit disconcerting that "they" also provided a form asking for a good bit of personal information - and have it on an insecure page. Actually, I find that hard to understand (being polite here). :(

I was going to post about that but I decided to delete the email and go on about my day. I'm not in NY but I'm still not giving them any info. If they want to know my address they'll have to go through share-a-sale.

[Kevin]

Company C generating $1,000,000 in NY sales is irrelevant. It has to come from NY pay for performance relationships to count.

EDIT: $10k of it has to come from NY... etc... to count.