Overstock.com Drops New York Affiliates

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1. 
   On May 14 @ 11:59 am TrishaLyn said

   Wow that's pretty jacked.

   reply to this comment
2. 
   On May 14 @ 12:01 pm Shawn Collins said

   Not to mention bad timing – I wish the news came out before we did Affiliate Thing today, so we could have done some live commentary about it.

   reply to this comment
3. 
   On May 14 @ 12:03 pm TrishaLyn said

   Ha! I was thinking the same thing. It makes me wonder who's next – buy.com? ebay? Hmm…

   reply to this comment
4. 
   On May 14 @ 12:33 pm peter bordes said

   This is very bad. The states are always following each other. My best guess is that this is the start of a trend that is going to have a significant ripple effect..

   reply to this comment
5. 
   On May 14 @ 12:46 pm Ken said

   Nothing better than a loss-loss situation. No sales tax AND lower income tax paid by former affiliates in New York. It doesn't get better than this.

   reply to this comment
6. 
   On May 14 @ 12:51 pm kevin said

   I just touched on this on my blog, but it's interesting to note that a nexus, via the Quill decision) is defined:

   Nexus occurs from a sufficient physical presence, which can be an office or warehouse, but physical presence can also derive from soliciting a state’s consumers via sales representatives located in the state. However, it can’t be just any sales rep, according to another Supreme Court case — in-state representatives must be “significantly associated with the taxpayer’s ability to establish and maintain a market in the state”

   Based on that, we can assume that Overstock technically would have been safe… but how are we to determine which programs we are really providing that service for, and which we aren't?

   reply to this comment
7. 
   On May 14 @ 1:59 pm Shawn Collins said

   I think Amazon will ultimately be successful in their challenge, but there will be collateral damage.

   Will affiliates want to rejoin affiliate programs that booted them?

   reply to this comment
8. 
   On May 14 @ 3:07 pm Kevin Webster said

   I think that's going to depend on the merchant, and what they were worth to them. Sure, lots of chest thumpers will say no, but a revenue stream is a revenue stream.

   I was surprised by Overstock today. I'd be further surprised that if this gets straightened out, affiliates who were making money with them wouldn't come back.

   Now if it was a 2 person toe nail clippers company that booted everyone, that might be different. Unless I was selling a LOT of toe nail clippers.

   reply to this comment
9. 
   On May 14 @ 8:40 pm Vlad Zablotskyy said

   I truly hope New Jersey is not going to follow with this crap.

   reply to this comment
10. 
    On May 14 @ 8:44 pm Shawn Collins said

    I think it all depends on the result of Amazon challenging it – if Amazon is successful, I think the concept loses all traction in other states.

    reply to this comment
11. 
    On May 14 @ 9:01 pm Vlad Zablotskyy said

    Let's hope so. I am just a little confused to how any affiliate can be responsible for the sales tax. But I guess a law made by confused politicians suppose to confuse us.

    reply to this comment
12. 
    On May 15 @ 5:14 am Kevin Webster said

    It's not so much that the affiliate is responsible for the tax, but rather just that our very presence, meaning living in New York, creates a “physical presence” for Overstock in this case. Therefore, since they have a “location” in New York, they must tax New York residents.

    Turns out Overstock also terminated relations with a Comparison shopping engine located in New York, as well as a printing company that they were paying for performance on coupon distribution. This new legal language extends well outside affiliate marketing.

    reply to this comment
13. 
    On May 15 @ 8:47 am Vlad Zablotskyy said

    Ok now I get it. What about affiliates registering their business in other
    states? Screw the politicians. I mean it should not be that difficult for
    some one from Manhattan to register their affiliate business in Hoboken?

    reply to this comment
14. 
    On May 15 @ 8:54 am Kevin Webster said

    Should be simple enough. May cause income tax issues on some levels. I think the bigger question is… Of the 45 states that have sales tax, who will be next? We'll all end up “registered” in 5 states.

    reply to this comment
15. 
    On May 15 @ 9:07 am jamesdorans said

    Others merchants already done this like 2 weeks ago when it happened to me.

    2 of them told me they would reinstate if the tax is defeated. I know that the 2 merchants are not as big as Overstock but still. Which is good but still for me, I have to redo my site.

    reply to this comment
16. 
    On May 15 @ 9:12 am jamesdorans said

    Here was one of my termination which came before Overstocks. This was my biggest merchant.

    From: LiveAquaria.com <affiliate@liveaquaria.com>
    To: xxxxxx@xxxx.com
    Sent: Tuesday, May 6, 2008 6:05:12 PM
    Subject: Notification of Removal from Program

    Dear James Dorans:

    Due to the new online tax law in New York State we have decided to remove all New York state affiliates until this issue is clarified. We regret having to do this and hope that after further clarification or the law being struck down, that we will revisit this issue and hopefully be able to resume the productive business relationships we have enjoyed with you.

    We appreciate your understanding in this matter and look forward to working with you again in the future.

    Regards,
    The LiveAquaria Affiliate Team

    reply to this comment
17. 
    On May 15 @ 9:14 am Shawn Collins said

    Has anybody seen a tally of all affiliate programs that have pulled out of NY?

    reply to this comment
18. 
    On May 15 @ 10:58 am jamesdorans said

    Well NJ loves taxes to.

    reply to this comment
19. 
    On May 15 @ 11:03 am Shawn Collins said

    For sure – NJ loves money out of my wallet constantly.

    We're NY's cousin of corruption, wasteful spending and excessive taxes.

    reply to this comment
20. 
    On May 15 @ 11:08 am jamesdorans said

    So true

    reply to this comment
21. 
    On May 15 @ 11:08 am jamesdorans said

    What 5 States are those?

    reply to this comment
22. 
    On May 15 @ 11:12 am Kevin Webster said

    Out of curiosity, has anyone been tossed from a program that wasn't an independent or on Linkshare? (feel free to read into this question…. it's loaded)

    reply to this comment
23. 
    On May 15 @ 11:12 am Kevin Webster said

    I'm only aware of 3.

    reply to this comment
24. 
    On May 15 @ 12:33 pm jenn said

    New Hampshire, Alaska, Delaware, Montana and Oregon.

    reply to this comment
25. 
    On May 15 @ 12:36 pm jamesdorans said

    Thanks

    reply to this comment
26. 
    On May 15 @ 12:37 pm jamesdorans said

    I had 4 cancel on me.

    Well 2 are the same company Dr Smith and Foster and LiveAquaria
    Albris
    Overstock

    reply to this comment
27. 
    On May 15 @ 12:43 pm jamesdorans said

    Hey I was actually axed because of this and I would rejoin them in a heart beat since I really like dealing with them and think they are great or I would have never started promoting them in the first place.

    reply to this comment
28. 
    On May 15 @ 1:34 pm Shawn Collins said

    I wonder if the indictment of the Missouri woman in the MySpace cyberbullying case could matter here?

    Even though she was in MO, the case is taking place in Los Angeles, since MySpace servers are in CA, and it was determined that is where the bullying took place.

    So, if Overstock has their servers in UT or anywhere but NY, couldn't a similar argument be made – the transaction is never in NY.

    Or what if the affiliate's site is hosted in another state?

    I am in NJ and my site is at RackSpace in San Antonio.

    reply to this comment
29. 
    On May 15 @ 2:04 pm Etty said

    In a time when our economy is already taking the hit from high gas, prices, food prices, a depressed real estate market and rising rate of unemployment we get a hit with yet another reason to lose faith in our politicians. Way to go Patterson you've just alienated the small business guys and gals trying to make an honest living! And there are lot's of them…..

    reply to this comment
30. 
    On May 15 @ 4:58 pm MediaTrust said

    Shaun we see this as a growing issue that needs to be addressed.
    http://www.relevantlyspeaking.com/2008/05/15/wa...

    we have started an email to get our community pro actively working together around this issue. we have set up affiliatepetition@gmail.com to create a central gathering point to begin a working community effort

    please lets all get involved!

    reply to this comment
31. 
    On May 15 @ 5:54 pm Shawn Collins said

    There is talk about forming an industry association – see http://www.revenews.com/brookschaaf/a-new-indus... – I think all parties should comine to work together on this.

    reply to this comment
32. 
    On May 15 @ 10:26 pm Kevin Webster said

    It was pointed out in a thread at ABW earlier, but I'll state that it's curious to me that Linkshare merchants have been the ones removing affiliates… While it could be stated that we each (as affiliates) have business relationships with our partners, is that necessarily true if that “agreement” was digitally signed through a network?

    Especially if that network isn't based in New York…… such as Linkshare is….

    reply to this comment
33. 
    On May 16 @ 6:04 am MediaTrust said

    Thank you for the link Shaun. This is an issue that can become a problem for the industry if we as an industry don’t address it. Please spread the word as we work with the IAB to assemble information about the impact this has on affiliate marketing. I will send updates thru Twitter http://twitter.com/mediatrust , http://www.RelevantlySpeaking.com and the affiliatepetition@gmail.com

    It is very important that we collaborate as a community around this. The industry is fragmented and most affiliates are to small individually to have a voice. As we say at MediaTrust ” we are stronger as a collective then as individuals”. We all need to create a community voice and nip this or address it in a meaningful way. I believe leveraging the social media can help spread the word.

    reply to this comment
34. 
    On May 20 @ 6:40 am dampier said

    Overstock has done the right thing for end customers, which should be FAR more important than affiliates during this rocky period for Internet etailers and their affiliates. As a NY based website operator that has affiliate programs in place, I am not at all upset by Overstock's move and, in fact, consider it a win-win. As the lawsuit plays out, those retailers that demonstrate a commitment to their customers, even at the temporary expense of affiliates, will generate a lot of goodwill and keep sales even. Amazon is losing my business on 6/1 (as well as a lot of other NY customers who will find better deals elsewhere), so that's revenue Amazon affiliates will never realize anyway, and if I as a customer get used to buying from an alternate supplier, why ever patronize Amazon again?

    Guess what, customers should be more important than affiliates.

    And manning the barricades against this case in NY is critical, because at least a dozen states are admittedly watching to see how this plays out, so they can impose their own similar laws. Everyone will have to sacrifice something to fight this. NY residents are bugging their elected officials about this as well.

    reply to this comment
35. 
    On May 20 @ 6:48 am Shawn Collins said

    > at the temporary expense of affiliates

    While the dumping of affiliates in NY by Overstock might be a temporary measure in the eyes of Overstock, I wouldn't be surprised if affiliates didn't trample each other if/when they are given the chance to rejoin.

    Just several days to take down links, in some cases where they are extensively integrated into sites via the data feed, is not going to breed goodwill with affiliates.

    And make no mistake, affiliates are customers, too.

    reply to this comment
36. 
    On May 20 @ 7:52 am hatman1 said

    Isn't New York great. They can't get the Indians to pay tax so why not go after the internet?

    reply to this comment
37. 
    On May 20 @ 8:33 am jamesdorans said

    My programs where all under Linkshare. What is now pissing me off why is Linkshare sitting on there @%! and Amazon is doing the fighting. Linkshare is a NY company that is suppose to have a flourishing network of affiliates.

    reply to this comment
38. 
    On May 20 @ 8:36 am jamesdorans said

    Good point Shawn.

    I am actually getting a PO Box in PA and use that for my affiliate business.

    reply to this comment
39. 
    On May 21 @ 9:22 am gutenburg said

    I don't think law was made for affiliates (though it may apply) but to those selling on Amazon or Overstock. I doubt Amazon or Ebay will kick out NY affiliates or even those sellers based in NY. The best way to avoid this is to start a corporation in Delaware or Rhode Island (I think those are the best states) and run your affiliate business through that.

    reply to this comment
40. 
    On May 21 @ 9:25 am gutenburg said

    I agree! We have the worst taxes than almost any other state. It is stupid that the Indians don't have to pay taxes but we have to pay exorbitant taxes on everything. And the Indians make easy money doing something that is illegal for any other citizen to do.

    reply to this comment
41. 
    On May 21 @ 9:27 am gutenburg said

    Good idea! My thoughts exactly!

    reply to this comment
42. 
    On May 21 @ 9:29 am gutenburg said

    I think that NJ will follow if Amazon does not win the lawsuit. In fact I would expect most states to do the same if Amazon doesn't win, which I think they will. Amazon and Ebay can't have a whole state where no one can sell so they have to win.

    reply to this comment
43. 
    On May 21 @ 9:31 am jamesdorans said

    Well in technicality Native American reservations are not subject to NY or US laws.

    reply to this comment
44. 
    On May 21 @ 9:37 am asrguy said

    Hey come up to Canada. I'm sure we can get our local economic development council to help you with the business registration

    reply to this comment
45. 
    On May 21 @ 9:38 am IntrepidTraveler said

    Don't put all the blame on Patterson. This is a New York tradition. New York used rapacious tax ploys throughout George Pataki's term. He liked to rail against “job killing taxes” while the finance people used every dirty trick they could think of to squeeze small businesses out of a few more pennies.

    I finally moved out of New York because of those Republican job-killing taxes. At the least the Dems aren't hypocrites like Pataki. They love to tax and they do.

    reply to this comment
46. 
    On July 27 @ 1:32 am barrynathan said

    This entire case has really been fascinating to me. Thank you for your great coverage. But you have failed to mention the most recent developments. I read on Seeking Alpha for instance that New York State has voted to repeal this horrible new law. You should include this information. You can read the article here:

    http://seekingalpha.com/article/86766-amazon-ov...

    reply to this comment
47. 
    On July 27 @ 6:56 am Shawn Collins said

    Thanks – I aven't failed to mention the repeal updates. See…

    http://blog.affiliatetip.com/archives/status-of...
    http://blog.affiliatetip.com/archives/vote-to-r...

    reply to this comment
48. 
    On December 16 @ 6:36 am sbs said

    am just a little confused to how any affiliate can be responsible for the sales tax.

    reply to this comment
49. 
    On March 20 @ 10:00 pm Affiliate Marketing Blog said

    Wow, that’s really messed up.

    So, I wonder if California will be facing the same issue soon? I’m actually from Cali, but moved to Texas temporarily to spend more time with family. Was looking into buying a house, but now I hear Cali will be doing the same damn thing as NY?

    This is lame.

    reply to this comment
50. 
    On April 10 @ 8:07 am Joe said

    New Yorker’s are getting over taxed on everything. I hope the next election will bring change.

    reply to this comment
51. 
    On June 22 @ 11:31 am Jason said

    Thanks for sharing. Does anyone know if New Jersey will be following suit?

    reply to this comment
52. 
    On June 22 @ 12:38 pm Shawn Collins said

    @Jason:
    I’ve been monitoring it in NJ and haven’t seen any sign of it so far.

    reply to this comment
53. 
    On July 11 @ 12:36 am Charles Goldie said

    Your Message@Shawn Collins:
    I don’t think so, Amazon is shutting down in California or that is what is going around right now I hope not.

    reply to this comment
54. 
    On July 11 @ 2:19 am Shawn Collins said

    @Charles Goldie:
    This post is from May 2008 – far before there was a discussion of an advertising tax in California.

    See http://blog.affiliatetip.com/archives/governor-schwarzenegger-terminates-advertising-tax-in-california/ for the latest in CA.

    reply to this comment

1. 
   On May 14 @ 3:13 pm NY’s ‘Amazon Tax’ Takes First Casualty: Overstock Affiliates posted

   [...] You can read more details at Shawn Collins’ Affiliate Marketing Blog. [...]

2. 
   On May 14 @ 3:41 pm Overstock Fires New York Affiliates Over New Tax Law - 5 Star Affiliate Marketing Blogs posted

   [...] Shawn blogged it after I did. Here’s what he had to say: Overstock.com Drops New York Affiliates [...]

3. 
   On May 14 @ 3:45 pm 72 Kilowatts Affiliate Marketing » Who does the new New York Tax Law really effect? posted

   [...] Shawn Collins, Overstock Drops NY Affiliates [...]

4. 
   On May 14 @ 3:48 pm Affiliates in New York - sorry to hear the news on sales tax! | Vastplanet Internet Marketing Blog posted

   [...] reading a post on Shawn Collins affiliate marketing blog about how Overstock.com dropped affiliates based in New York. According to Shawn’s [...]

5. 
   On May 14 @ 4:29 pm Warning - California May Copy NY’s Amazon Affiliate Tax Law - 5 Star Affiliate Marketing Blogs posted

   [...] Overstock.com Drops New York Affiliates [...]

6. 
   On May 14 @ 7:29 pm TechCrunch Japanese アーカイブ » Amazon税の最初の被害者はOverstockのアフィリエイト posted

   [...] Shawn Collins’ Affiliate Marketing Blogで詳細記事を読むことができる。 [...]

7. 
   On May 14 @ 8:35 pm New York Shakes the Web: Overstock Tosses Affiliates | C2 Choices posted

   [...] Affiliate Marketing Blog first reported that Overstock.com was cutting off New York companies involved in their Affiliate [...]

8. 
   On May 14 @ 11:03 pm When Will New York Introduce A Google Tax? | Andy Beard - Niche Marketing posted

   [...] is a story that both Linda at 5 Star Affiliate Programs and Shawn's Affiliate Blog have been covering in [...]

9. 
   On May 15 @ 12:22 am Affiliate Thing Podcast - May 14, 2008 : GeekCast.fm posted

   [...] Overstock.com Drops New York Affiliates [...]

10. 
    On May 15 @ 8:01 am Affiliate Thing Podcast - May 14, 2008 | Affiliate Marketing Blog by Shawn Collins posted

    [...] Overstock.com Drops New York Affiliates [...]

11. 
    On May 15 @ 11:04 am Thoughts on New York Affiliates Situation : CostPerNews posted

    [...] Shawn Collins covered it first and best at AffiliateTip Blog: Today the Small Business Blog reports that Overstock.com has issued a notice to all New York state affiliates that they are being dropped from the Overstock Affiliate Program, effective May 20, 2008. [...]

12. 
    On May 15 @ 7:10 pm WARNING : The Affiliate State Tax Trend is NOT our Friend | Relevantly Speaking posted

    [...] as the news traveled across the social networks. I was Twittering with @affiliateTips Shaun Collins (who first picked up the story) that this is the beginning of a problematic trend. States act like herds of animals looking for tax [...]

13. 
    On May 16 @ 9:46 am Affiliate Marketing Industry - Time to start, Steps to fix NY Affiliate Sales Tax | Vastplanet Internet Marketing Blog posted

    [...] it makes me upset that more has not been done to stop this issue. Sam Harrelson of Cost Per News, Shawn Collins of Affiliate Tip, Heather Paulsom and Todd Crawford on Revenews, CNET, NY Times all have made excellent comments on [...]

14. 
    On May 16 @ 11:30 am TrishaLyn - Cribbed Content for May 16th posted

    [...] Overstock.com followed suit and dropped their New York affiliates.  It’s an epidemic!  There’s some whispers that California might be the next state to jump on the bandwagon, but I’m crossing my fingers that it doesn’t happen. [...]

15. 
    On May 18 @ 11:42 pm ShareASale Aids Decision on New York Affiliate Expulsion | Affiliate Marketing Blog by Shawn Collins posted

    [...] his affiliate network will work with merchants to make decisions on how to react to the upcoming Amazon tax in New [...]

16. 
    On May 19 @ 12:59 pm Stupid New York Tax Law Gets Affiliates Axed posted

    [...] affiliates that they’ve been dumped effective June 1st, 2008. One New York-based affiliate on Shawn Collin’s blog commented that he’d already been dropped by 4 Linkshare [...]

17. 
    On May 20 @ 10:39 am New York State Does It Again | Hydrogen Blog 11 posted

    [...] notified it’s 3400 affiliates they are gone as of June 1st 2008. New York-based affiliate  Shawn Collin’s blogcommented that he’d already been dropped by 4 Link-share [...]

18. 
    On May 20 @ 2:13 pm Commission Junction on the New York Affiliate Tax | Affiliate Marketing Blog by Shawn Collins posted

    [...] I reported last week, Overstock dropped their New York affiliates to avoid their customers having to pay the [...]

19. 
    On June 17 @ 12:50 am | Relevantly Speaking posted

    [...] up as the news traveled across the social web. I was Twittering with @affiliateTips Shaun Collins (who first picked up the story) that this was the beginning of a problematic trend. States wanting tax dollars act like herds of [...]

20. 
    On June 17 @ 10:58 am The Affiliate State Tax is Not Our Friend | Relevantly Speaking posted

    [...] up as the news traveled across the social web. I was Twittering with @affiliateTips Shaun Collins (who first picked up the story) that this was the beginning of a problematic trend. States wanting tax dollars act like herds of [...]

21. 
    On June 24 @ 6:51 am North Carolina, 7% of Zero is Still Zero « Affiliate Marketing Blog posted

    [...] So Amazon will pull out. What about Overstock.com that the article also mentions? Based on the New York precedent, the answer is also [...]

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