IMPORTANT UPDATE: 5/31 Overstock Files Suit Against New York!

Complete Coverage of the New York Affiliate Tax Issues Here

Oh dear, I was afraid this was going to happen. Due to the New York tax law that requires merchants with New York affiliates to collect sales tax on all NY purchases, companies are taking the easiest way out and just throwing affiliates under the bus to try to avoid the sale revenue that will be lost by having to add sales tax to online purchases. I’ve been blogging about this issue and Amazon is suing the state of New York over it. See link for background info. Adam just started a post about it at the 5 Star forum.

Affiliates are under attack – New York ones first out –
“Overstock.com has decided to fire all their affiliates based in New York. The letter below, dated May 13, 2008, just went out to their Affiliates. This is simple math for Overstock.com – New York is probably a good chunk of their business and why risk hurting sales in New York by having to charge sales tax to people who live in New York City. Overstock has decided to throw their long standing Affiliates under the bus as opposed to standing by them.”

Here is a copy of the letter Overstock sent affiliates. They say they hope this is temporary. According to the way the law is written however, this may not exempt them from paying the taxes, since I assume they do have previous New York affiliate sales which undoubtedly exceeds $10,000.

Digg this story and spread the word!

IMPORTANT NEW DEVELOPMENTS! Hot off the press:
Warning – California May Copy NY’s Amazon Affiliate Tax Law

MORE on the Overstock story:

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

NY’s ‘Amazon Tax’ Takes First Casualty: Overstock Affiliates – TechCrunch

More news coming soon – Check back later today!