New York Affiliate Tax Recap
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I just wanted to provide a quick recap for the ongoing saga in the state of New York regarding the affiliate tax, which kicks in June 1, 2008.
Back in November 2007, then Governor Spitzer tried instituting the plan to tax all online transactions for companies that had no physical presence in New York.
The premise was that if a company has affiliates in the state that these affiliates constitute a physical presence for the company.
At the time, there was a public outcry, and he quickly backed off the plan, which was intended to kick in for Christmas 2007 sales online.
The bad idea came back around in February 2008 when Eliot Spitzer championed it, again.
Around that time, Governor Spitzer became embroiled in scandal and I had hoped the affiliate tax was going to get derailed as he was forced from office.
But the new governor, David Paterson, was just as gung-ho as Spitzer to push this tax scheme on the people of New York in March 2008.
Come April 2008, Stephen Dubner reported in the New York Times that the New York State budget has this new affiliate tax worked into it with an expectation that New York would get $50 million out of the tax.
And then, at the start of May 2008, Amazon filed a complaint in State Supreme Court in Manhattan objecting to the new law.
This brings us up to this past week when I reported on May 14 that Overstock sent notices to their affiliates in New York that they would no longer be in the affiliate program as of May 20.
Since then, affiliate marketing forums and blogs have been active with outrage on the issue. Some folks got the ball rolling to form an industry trade association to try and combat this and future attacks on affiliate marketing.
The affiliate networks have also gotten involved with ShareASale providing data on New York affiliates to their merchants, Commission Junction educating their affiliates and merchants on the issue, and LinkShare working with the DMA to host a call today to clarify the law.
Also this week, Jim Kukral, Lisa Picarille, Sam Harrelson, and I discussed the situation in detail on GeekCast.
I’ll be covering the future developments of the New York affiliate tax here.
- Posted in Affiliate Managers, Affiliate News
22 Comments
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On May 22 @ 11:50 am posted[...] New York Affiliate Tax Recap [...]
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On May 24 @ 9:22 pm posted
[...] New York Affiliate Tax Recap [...]
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On May 28 @ 4:34 pm posted
[...] New York Affiliate Tax Recap Shawn Collins provides a quick recap of the ongoing saga in the state of New York regarding what has become known as the “affiliate tax.” Packed with links to recent events, relevant legal actions, responses from networks and merchants, and the industry’s leading opinion makers. Read the full article here. [...]
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On June 4 @ 5:26 pm posted
[...] New York Affiliate Tax Recap Shawn Collins provides a quick recap of the ongoing saga in the state of New York regarding what has become known as the “affiliate tax.” Packed with links to recent events, relevant legal actions, responses from networks and merchants, and the industry’s leading opinion makers. Read the full article here. [...]
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On July 3 @ 11:32 am posted
[...] who also have dropped their NY affiliates at abestweb.com and watch a video of Shawn Collins at Affiliate tip on how this whole mess started. Marketing Sherpa also has an article about whether or not the [...]
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On January 1 @ 9:01 am posted
[...] The New York Affiliate Tax sent a number of affiliate marketers from New York off into other lines of work, while others stood and fought the good fight. [...]
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On January 2 @ 1:02 am posted
[...] of affiliates!), and hundreds of New York affiliates booted out from affiliate programs [recap from Shawn Collins and at CNET News]. Shortly thereafter California and Texas started thinking in the same direction [...]
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On February 4 @ 11:09 am posted
[...] New York Affiliate Tax Recap [...]
Be sure to be on the call in a half hour
reply to this commentI have a long scheduled meeting that can't be moved.
But I am sure there will be lots of coverage.
reply to this commentLOL. I just watched your video on this. You have a knack for finding the best pictures of my beloved governors.
reply to this commentHi Shawn. In my opinion, companies like Overstock and others will play hell getting a lot of their affiliates back, if and when the New York law is abolished.
At least Clickbank has decided to take the affiliate's side in this issue.
reply to this commenthttp://www.clickbank.com/blog/2008/05/19/our-re...
That's just crazy.
Shawn, what can we do as affiliates around the country to come together and oppose this scary precedent?
Thanks,
Jonathan
reply to this commentThere is talk about forming an industry association to try and work against this sort of thing in the future.
Amazon is suing New York state.
Short of legal means, I am not sure there is much affiliate marketers can do at this point, aside from spreading the word and trying to get more of an outcry about it.
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David Mills
Wow, this state tends to always find ways to take more of my money… and now they are going to limit of having me kicked out of major income generating affiliate programs because of my location… Already received notice from a few.
Yeah… I love NY alright.
reply to this commentThis is basically going to end up being a direct attack against affiliates in New York, most companies are going to run the numbers and realize dropping the NY affiliates is cheaper then charging everyone sales tax…
I'm not a tax lawyer or an NY affiliate but, it sounds like all NY affiliates need to do is incorporate out of state I'd assume.
reply to this commentDoes the USA not have a federal sales tax that applies to everyone ?
Its more likely that those least able to defend themselves, namely the affiliates, will bear the brunt of effects of the new tax.
reply to this commentThere is not a Federal sales tax in the U.S.
reply to this commentDoes the USA not have a federal sales tax that applies to everyone ?
Its more likely that those least able to defend themselves, namely the affiliates, will bear the brunt of effects of the new tax.
reply to this commentThere is not a Federal sales tax in the U.S.
reply to this commentThat would suck to get kicked out of a profitable niche because your state made a law like this I hope they don't do something like this in California
reply to this comment