The ABW solution for the Tax issues!

I love the idea of a hybrid EPC/PPC model to combat the NYS tax law. Gregs post was fantastic, and should be looked at closely by all. Would this be just for NY resident clicks? Or for all clicks that an NY affiliate leads to a merchant?

Mellie - It is my understanding that even if a merchant doesn't pay you a CPA commission on sales you lead from NY residents, it will count against the nexus regardless. Am I right in my thinking?

I look forward to being proactive in trying to figure this out.

Brent

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Brent Elias
Affiliate Manager
Belias@CSNStores.com
AIM: CSN Stores
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CSNStores.com Home Page | CSN Stores Affiliate Program Sign Up | Luggage.com Home Page | Luggage.com Affiliate Program Sign Up
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"GOD grant that men of principle shall be our principle men" - Thomas Jefferson

This is where CSN got hung up. The "gray" area of this law was to shady. Being presented with a solution outside of this "gray" area is imperative to this working. There are already ways of working around the law, however nobody knows how they will be interpretted by NYS in 6 months. That is a lot of risk for a merchant that brings in 20+ million a year from NYS residents alone.

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Brent Elias
Affiliate Manager
Belias@CSNStores.com
AIM: CSN Stores
_____________________________________________
CSNStores.com Home Page | CSN Stores Affiliate Program Sign Up | Luggage.com Home Page | Luggage.com Affiliate Program Sign Up
_____________________________________________

"GOD grant that men of principle shall be our principle men" - Thomas Jefferson

Not sure Brent, the more I read and the more I think, the less I know for sure lol.

My current thought is that NY affiliate sales to NY residents can't be compensated on a per anything basis (either cpa or cpc) I have to read the definitions of nexus again. But it's been along day and my head is spinning, maybe tomorrow it'll be clearer.

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Melanie
President - Affiliate Advocacy 2008 ShareaSale Performance Industry Advocate Award, 2009 Affiliate Summit Pinnacle Award - Affiliate Advocate
Affiliate Advocacy
NYAffiliateVoice Seery Writing

The reading of the law I favor (which by no means makes it absolute) indicates that a nexus is only presumed if affiliates engage in off line activities that directly promote a merchant, or e mail campaigns/ PPC campaigns that directly promote a merchant.

Short of that, a NY affiliate is not engaging in any activity that directly effects ANY merchants ability to do commerce in NY (as evidenced in thee Tyson Pipe case).

None of this has yet to be proven or disproved, so there you have it.

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Kevin Webster
twitter: Kevin72
Freshwater Kayak Fishing
The Eclectic Grocer

I think this is the first time I've quoted myself. I meant to say that I think to avoid what many see as the grey area of what is or isn't a nexus NY affs can't be compensated at all if there is also commission compensation for other sales. That being said giving up commission on NY sales still doen't bother me as much as losing everything so I really hope this is doable.

I think that the current understanding by most merchants and similar to Kevin's is accurate - NY afffiliates can't market merchants direct to NY residents (no email, direct ppc, newsletters mentioning merchants, no flyers, phone calls....). By a merchant saying they won't pay a NY affiliate on NY sales you pretty much guarentee we won't be targeting NYer's

My accountants & their lawyers concur and have told me they think that if I keep my business online and don't target NYer's I am not a nexus for a merchant. I can only promote my site and not merchants. I couldn't tell my sister to shop at CSN and give her my link but I could say go to my website and if she found you there good for her.

It sure will be nice to sit down in Albany with the lawyer and hopefully get some clarity so we can work out a solution.

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Melanie
President - Affiliate Advocacy 2008 ShareaSale Performance Industry Advocate Award, 2009 Affiliate Summit Pinnacle Award - Affiliate Advocate
Affiliate Advocacy
NYAffiliateVoice Seery Writing

Be very careful making the CPC amount performance based. I think it's a very thin line and NY will likely consider any CPC that varies based on performance to be essentially the same as commissioning.

I think it's much cleaner and clearer if the sales by NY affiliates shipped to NY customers are non-commissionable.

I concur with the others who suggest that a legal professional should be consulted on this. In addition, someone might want to get NY to give an opinion. If you check out their web site, they allow companies to request opinions.

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Michael Coley ABestWeb.com Admin and Amazing-Bargains.com Founder

Merchant Training 101:NEW! NY Tax Solution | Get The Most Out of ABW | Merchant Best Practices Forum | Affiliate Friendly Policies | A Practical Guide to Affiliate Marketing book | Couponing Tips | How Adware Works | My Opinion of CPA Networks

I am also willing to kick in some money toward a NY tax lawyer and/or accountant to assess the legality of Haiko's proposal.

I'm psyched! Let's get something going!!!

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I know that big heart of yours is in the right place MC. That fact stated, requesting an opinion from the state that passed the law to achieve their own special interest will not return an "objective" reply that will be of any benefit to what Affs and merchants are trying to accomplish.

The state opinion will always support what the state feels is in the best interest of propagating their own philosophy and intent. Past that, if you offer rebuttal or question the existence of a nexus under "x" scenarios, they will respond that you should consult an attorney. Been there a few times...

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I don't twitter.....

Haiko, I'm good for $250. If funds are needed and you are collecting them at some time, just please email me and I can paypal it to you, zero strings, zero questions, no receipt - just consider your own $1k swelling by 25%.

I don't live in NY, but I see this as impacting me in the future, other states will surely follow. Now is the time to nip this.

WOW, thanks Donuts!!!

I'm not doing the collecting and don't know who is but once I do I'll send them to ya.

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Continued Success,

Haiko
The secret of success is constancy of purpose ~ Disraeli

Haiko, I'll certainly chip in another $100 to help "swell" your commitment if/when funds are needed. Same deal as Donuts' offer - no strings, PayPal or personal check, no receipt, no "conditions."

I (too) do not live in New York and will, in fact, be incorporating in Delaware by year end. However, this NY issue will have industry wide ramifications. I do believe that states with Sales and Use Tax laws will eventually recoup (some of) the brick & mortar taxes lost to Internet sales. But we, as an industry, need to know how and when they will do it - Black and White - no gray areas for (mis)interpretation) by the greedy and/or the shady.

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Bill Swartwout, Founder, Beaches and Towns Network, Inc.
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Count CMC in as well. We'll pledge at least $250. If you need more let me know. I think your idea is worth the investment.

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Greg Rice Affiliate Program Management
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Haiko, I'll do $100 also for the same reasons as Donuts and Beachy. If we all sit by and watch this happen to NY, then shame on us and who's going to be there when our "retirement" plan gets pulled out from under us. Thanks for stepping up to the plate and letting us hand you a bat or two.

Jim

Amazing ... TY Greg and Jim ... this is how we solve problems!!!

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Continued Success,

Haiko
The secret of success is constancy of purpose ~ Disraeli

Hey, don't I get a thank you, too?

Sheesh.

I'll pony up at least $100. Anything more than that I have to clear with hubby.

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Rhea ... a hug a thank you and a high five!!!

Together we will solve this issue!

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Continued Success,

Haiko
The secret of success is constancy of purpose ~ Disraeli

That's better!

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Retro Fridge Magnets Snarky T-Shirts Sports Fan T-Shirts Foodie T-Shirts Animal Lover T-Shirts

Gang, if the purpose of the attorney is to get an opinion and / or way that NY affiliates and their out of state merchants can resume under exclusion from the NY law, I'll also donate to help out. I would like to keep any donation amounts confidential however.

If the purpose of the attorney is to contest the law, it will take a ton of money, potentially hundreds of thousands of dollars (or more) to see it through. I assume from what I've read here that the intent is to engage an attorney to render an opinion and guidance as to under what circumstances the nexus does not apply in "x,y,z" scenarios. But if there are any thoughts about challenging the law in court, you are looking at an entirely different expense level that we can all better support by donating to the big companies that have already filed to challenge.

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I don't twitter.....

There are already two such suits pending and any additional case would only be consolidated with the pending cases. There is no rhyme or reason for another such case to be filed.

As to a consultation, much care must be taken in choosing such an attorney with whom to consult. To consult just a "NY tax attorney" could be a waste of time and resources. There needs to be found a NY tax attorney who is already familiar with both 1) the concept of affiliate marketing and 2) the specific issues with the new law. Otherwise, the attorney would be paid to spend hours researching basic information that he could already be familiar with. Also, even with research, he may still not grasp the concepts of affiliate marketing. This is a an area not well litigated and about which he would need to look outside traditional legal resources. Look at the DSW case, where the attorneys filing the case have totally mischaracterized what CJ actually does and their part in affiliate marketing.

It might be wise to consider consulting with one of the firms currently representing Amazon or Overstock, who appear well versed on all of the key issues.

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aarf
"It's inexcusable for scientists to torture animals; let them make their experiments on journalists and politicians." -Henrik Ibsen
I never linked my political blog, but here is my new sports blog theHoundDawgSportsBlog NFL Predictions posted 9/8/09
"I wouldn't touch the metric system with a 3.048 meter pole." - Woody Paige

As to the filing of a separate lawsuit on behalf of affiliates, it may well be that affiliates would not have legal standing to file such a suit, as affiliates do not collect sales tax, and it may well be that unless a party would directly come under the purview of the law by being required to collect sales tax, they could not sue.

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aarf
"It's inexcusable for scientists to torture animals; let them make their experiments on journalists and politicians." -Henrik Ibsen
I never linked my political blog, but here is my new sports blog theHoundDawgSportsBlog NFL Predictions posted 9/8/09
"I wouldn't touch the metric system with a 3.048 meter pole." - Woody Paige

I agree on all points Hound. I also underscore the importance of digging deep to find a firm that has a true working knowledge of the new law, as well as experience in internet marketing relationships. There are very few, very few attorneys who have hands on knowledge with both. Because someone is an attorney does not qualify them to be an expert in this special field, so be diligent in the selection for sure.

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I don't twitter.....

I'm pleased with how this thread has progressed. We must support our NY breathren and sisteren. Our self-interests are at stake here. Plus, sweethearts like Mellie, a good heart trying to make a living ethicallly, and the many like her, do not deserve this kind of treatment from her home state. We must do more to protect our own. H, thanks for starting the money line here, steps like that are SO easy to follow. I'm in line, behind you. Mellie, hand in there, your friends are ready to fight with you. I don't know if we can make a difference, but I do know that we will try.

I'll match donuts in dollars and conditions.

LMK where to send it.

I have access to a Buffalo based attorney familiar with the Amazon tax. Drop me a line, H.

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Kevin Webster
twitter: Kevin72
Freshwater Kayak Fishing
The Eclectic Grocer

I've confirmed that Performics merchants can offer CPC for some affiliates and CPA for others based on a segregated list of affiliates who live/operate in XX state (ie. NY)

Legal opinions for such actions should be sought by each individual merchant.

Thank you Performics for your consideration, review and input!

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Continued Success,

Haiko
The secret of success is constancy of purpose ~ Disraeli