May 16th, 2008, 11:30 AM
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Network Rep & ABW Veteran
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Join Date: January 18th, 2005
Posts: 3,063
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*NEW* "New York Affiliate Revenue" Report in Merchant Interface
Hey all, I know there has been lots of talk about the new law going into effect in NY concerning affiliates, sales tax, and such...
ShareASale has always believed that affiliates deserve a right to privacy in this industry - as well as a balanced position on transparency that allows merchants to know the things that they need to know without the things that they don't. It has, at times, been a hazy line - but along the lines of contact information, we have never felt that merchants had a right to this information unless the affiliate consented to giving out private contact information such as phone numbers, addresses, etc...
Regarding this law, it is important for us to provide the answer to the question that is at the crux of the law. As a merchant, the question is ... "In the past year (or other time frame) what was my total gross sales generated from affiliates residing in the state of NY."
As such, our first response to this will be to provide this report which will allow merchants to know where they stand regarding the law.
Our plan at this time, is to treat any case where a merchant wishes to terminate NY affiliates with great care and caution. If a merchant requests to do this, there is little we can do to stop them - but ShareASale will be performing the task so that merchants aren't accessing information which traditionally is considered private within the network.
There is a chance that this plan will not work. My hope is that we can warn merchants that terminating NY is a bad plan - and one that needs rethinking. If our plan doesn't work - and we end up needing to provide more information to merchants, we may end up having to do so... I say this as a heads up to affiliates because while we don't like to give out info, we also don't want to put merchants in a place that makes it difficult to adhere to the laws of their state or others.
We can't offer legal advice to to merchants and/or affiliates regarding these laws. But I can offer my extreme dissatisfaction with the State of NY for their short term thinking and complete disregard for their citizens. I am personally confident that this will all be reversed and I am hopefull that for those affiliates in NY - it comes sooner rather than later.
__________________
Thanks,
Brian Littleton
President/CEO - ShareASale.com, Inc.
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May 16th, 2008, 11:37 AM
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Analytics Dude
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Join Date: January 18th, 2005
Location: Rochester, NY
Posts: 5,270
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Thank you, Brian.
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May 16th, 2008, 11:38 AM
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Online Marketing Consultant
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Join Date: October 16th, 2006
Location: Washington D.C.
Posts: 2,198
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Brian,
Thank you for being the first network out of the gate and letting us know how networks may or may not react to this new law.
As always, you are first on the scene and to go public which is why so many of us respect you, your company and why you have earned our trust and gratitude.
Thank you.
Adam
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May 16th, 2008, 11:57 AM
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Network Rep & ABW Veteran
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Join Date: January 18th, 2005
Posts: 3,063
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By the way... I find this part to be extra interesting.
From the law itself....
Quote:
"In addition, an agreement to place an advertisement does not give rise to the presumption
described above. For this purpose, placing an advertisement does not include the placement of a
link on a Web site that, directly or indirectly, links to the Web site of a seller, where the
consideration for placing the link on the Web site is based on the volume of completed sales
generated by the link."
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Essentially... that means that "affiliate marketers" are affected by this law due to the way that we measure performance. "Ad networks" are not because they pay their folks a different way.
Makes me wonder if we can use the EPC as a model - and modify payments so that we are using a CPM/EPC/Hybrid thing to make it an "Ad" model, and not a "performance" model.
If it were an "Ad network" that were paid via traditional CPM rates for example... we all would be totally unaffected as writted right there in the law. 
My guess is that this is playing a key part in the constitutional counter-argument from Amazon as the "singling out" is written right there in black and white.
They'll need more pens in NY in order to make exceptions for every other type of vendor in the world.
__________________
Thanks,
Brian Littleton
President/CEO - ShareASale.com, Inc.
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May 16th, 2008, 12:04 PM
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Member
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Join Date: March 25th, 2008
Posts: 104
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Brian, thank you for replying so quickly to this issue. As a NY affiliate I appreciate your stand on this but also understand that you may have to give information to merchants.
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May 16th, 2008, 12:16 PM
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Lite On The Do, Heavy On The Nuts
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Join Date: January 18th, 2005
Location: Orlando, FL
Posts: 6,976
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Extra interesting indeed!!!! That clause basically says... if it's an ad, no worry - BUT you can't call it an ad if its rewards are based on sales volume...
Affs are paid on volume, so they've worded this to make our activity taxable...
Google's PPA ads also do EXACTLY that.
They're trying to say the CPM ads aren't like having a sales person there representing you, but CPA ads and PPA ads (and therefore affiliate marketing partners) are...
The activity that the website owner / advertiser conducts, in the state of NY, is not materially different in either of these two cases, CPM or PPA/CPA.
In fact, with measurements of ROI as fine as we have online, all online ads are also conducted similarly by the person at the keyboard running them - knowing whether they pay (or are paid) on either a CPM or CPA basis - that the performance aspect of our industry means EVERYTHING is based on sales volume. And that fact, the we are performance based, does not in itself make us resident contracted nexus representatives.
Ridiculous!
I hope the court tosses this out quickly and that they ALSO penalize NY for impacting commerce by passing frivilous and capricious tax laws.
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May 16th, 2008, 12:19 PM
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The slot machine that IS paid!
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Join Date: January 18th, 2005
Location: Las Vegas
Posts: 5,045
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Wow!
An OPM asked me yesterday how to find out which affiliates in SAS are in NY, and I was wondering what you were gonna do - since SAS's privacy policy is so strong.
What a great solution! A great work-around.
Once again, I'm in awe of the Chicago Network.
__________________
http://www.youtube.com/user/BillyKayProductions
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May 16th, 2008, 12:30 PM
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Outsourced Program Manager
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Join Date: January 18th, 2005
Location: Ohio
Posts: 4,604
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Quote:
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Originally Posted by Brian - ShareASale
By the way... I find this part to be extra interesting.
From the law itself....
Essentially... that means that "affiliate marketers" are affected by this law due to the way that we measure performance. "Ad networks" are not because they pay their folks a different way.
Makes me wonder if we can use the EPC as a model - and modify payments so that we are using a CPM/EPC/Hybrid thing to make it an "Ad" model, and not a "performance" model.
If it were an "Ad network" that were paid via traditional CPM rates for example... we all would be totally unaffected as writted right there in the law.
My guess is that this is playing a key part in the constitutional counter-argument from Amazon as the "singling out" is written right there in black and white.
They'll need more pens in NY in order to make exceptions for every other type of vendor in the world. |
I've been thinking about that too and wondered, if it came to it, that if we paid NY affiliates based on a CPM basis if that would exempt having to charge sales tax. The trick would be how to accurately figure out just what that CPM would be. Perhaps based on past performance? So if a particular affiliate earned $100 on average for 1,000 clicks, if we changed their compensation from a % on sales to $100 per 1,000 clicks, could we avoid the NY tax law? Of course, this would mean paying attention to each affiliate's earnings and adjust accordingly.
Thanks Brian for stepping up and addressing this. |
May 16th, 2008, 12:33 PM
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Moderator - http and a telephoto
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Join Date: January 18th, 2005
Location: NYC
Posts: 15,402
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I was actually coming online to post a question about this issue. Since the merchants that are part of networks don't have location information, and that information is protected by privacy policies of the networks, would that make merchants that are part of networks unable to comply, or make them in some way exempt? And are the networks going to end up with nexus in NYS as well because the affiliates that are part of the networks are located in NYS?
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May 16th, 2008, 01:06 PM
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Analytics Dude
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Join Date: January 18th, 2005
Location: Rochester, NY
Posts: 5,270
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Quote:
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And are the networks going to end up with nexus in NYS as well because the affiliates that are part of the networks are located in NYS?
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The networks don't sell anything taxable, technically. Although I suppose an argument could be made that I work more for SAS than say, 4checks, based on the way the contracts are set up.
I'm still very interested to see the other networks, especially Linkshare, respond to this. And I'm glad SAS went first. |
May 16th, 2008, 01:42 PM
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Everything For Your Pet
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Join Date: January 17th, 2005
Location: Long Island, New York
Posts: 1,559
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Quote:
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Originally Posted by loxly
I was actually coming online to post a question about this issue. Since the merchants that are part of networks don't have location information, and that information is protected by privacy policies of the networks, would that make merchants that are part of networks unable to comply, or make them in some way exempt?
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Sure that will work for about two minutes, if a network is served with a subpoena to produce N&A of their NY affiliates and declines they will be sharing a cell with Buba.
Quote:
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Originally Posted by Donuts
I hope the court tosses this out quickly and that they ALSO penalize NY for impacting commerce by passing frivolous and capricious tax laws.
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I don't think a NY Court will do that to the NY State Tax Commission.
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May 16th, 2008, 02:05 PM
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Outsourced Program Manager
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Join Date: November 12th, 2007
Location: Outside of Seattle
Posts: 487
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Thanks Brian for being pro active concerning your position with this - as usual we appreciate your willingness to be a leader in taking on these critical issues and appreciate your words.. Thanks!
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May 16th, 2008, 03:11 PM
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Affiliate Manager
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Join Date: December 30th, 2006
Location: Mansfield, Texas
Posts: 1,510
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Interesting.
Is the affiliiate from New York if they are physically in New York, registered in New York or have their servers based in New York.
If you input code for a company headquartered in Dallas but live in New York is the company also liable for sales tax?
I believe there are many questions and definitions that need to be answered.
__________________
I would rather live my life as if there is a God and die
to find out there isn't, than live my life as if there
isn't and die to find out there is.
Easy Fundraising Ideas
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May 16th, 2008, 03:36 PM
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Network Rep & ABW Veteran
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Join Date: January 18th, 2005
Posts: 3,063
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As a Merchant on ShareASale - there is now a report under the heading of "New York Affiliate Revenue" which will provide you with the data that you need to make decisions.
__________________
Thanks,
Brian Littleton
President/CEO - ShareASale.com, Inc.
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May 16th, 2008, 04:15 PM
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Outsourced Program Manager
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Join Date: February 13th, 2007
Location: Surprise, AZ
Posts: 322
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Brian,
This is a great tool. Thank you. This again shows how you and SAS work for both the merchant and affiliate partners. We appreciate your quick work and effort to get something like this setup. It's interesting to see the totals that do come from NY affiliate sites.
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May 16th, 2008, 05:39 PM
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Outsourced Program Manager
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Join Date: November 12th, 2007
Location: Outside of Seattle
Posts: 487
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Bravo Brian - Seriously Bravo!!!!
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May 16th, 2008, 06:00 PM
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ABW Ambassador
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Join Date: September 26th, 2007
Location: New York
Posts: 652
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I thought about it as well. How to deal with this without disclosing private affiliate information and still getting some sort of answer for the merchants. This solution that SAS came up with is extremely smart, fair, and helpful. We appreciate all the time and thought put into this. Thanks!
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May 16th, 2008, 07:03 PM
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AM Navigator
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Join Date: May 10th, 2005
Location: NoVA
Posts: 12,313
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Thank you, Brian. 
Geno |
May 16th, 2008, 07:58 PM
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Outsourced Program Manager
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Join Date: November 8th, 2005
Posts: 1,016
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Brilliant handling of a tricky situation Brian!
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May 16th, 2008, 08:02 PM
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Member
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Join Date: March 25th, 2008
Posts: 104
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As an affiliate (NY) I appreciate Brian getting this info to the merchants so quickly but I gotta say I would be very interested in that number myself. Hopefully it's large enough for the merchants to look at this issue from all angles. Again I have to thank Brian for being so proactive on this issue.
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May 16th, 2008, 08:34 PM
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Outsourced Program Manager
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Join Date: January 18th, 2005
Location: Ohio
Posts: 4,604
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Awesome, thank you!
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May 17th, 2008, 08:43 AM
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Join Date: January 18th, 2005
Location: Mansfield, TX
Posts: 12,202
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Brian, for default timeframes, you might want to look at the way the NY law in worded. It's based on the previous four quarters, and their quarters aren't on a calendar basis.
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May 17th, 2008, 11:49 AM
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Network Rep & ABW Veteran
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Join Date: January 18th, 2005
Posts: 3,063
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Michael,
Yes the way I read it was that it was based off of NY financial quarters... which end in February, May, August, and November. So... the previous four completed quarters as I see it (obviously I could be wrong in my interpretation of the law) were from 3/1/2007 to 2/29/2008 ... Do you read differently?
__________________
Thanks,
Brian Littleton
President/CEO - ShareASale.com, Inc.
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May 17th, 2008, 04:55 PM
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Everything For Your Pet
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Join Date: January 17th, 2005
Location: Long Island, New York
Posts: 1,559
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That's correct but the tax isn't payable until the 20th of the following month.
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May 17th, 2008, 06:05 PM
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Lite On The Do, Heavy On The Nuts
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Join Date: January 18th, 2005
Location: Orlando, FL
Posts: 6,976
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Quote:
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Originally Posted by Donuts
Google's PPA ads also do EXACTLY that.
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Seriously, Google AdWord's PPA program means they're going to have to follow SAS's lead and provide info to adwords advertisers concerning which ones are in NY as well... what a mess. |
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