The bottom line, as of today, is that the Amazon suit is not scheduled to be heard for some time. The current plan is to begin implementing the tax plan on schedule. To date, no other merchant we can find has filed a lawsuit or attempted to obtain a temporary restraining order regarding this matter pending Amazon being heard in the courts. They have the most to lose in this and they have honestly not ponied up the necessary resources to resist this, preferring a wait for Amazon and see approach, which is frankly not acceptable.

The state legislature feels this issue is not yet drawing enough protest for them to get directly involved. In fact, outside of Amazon, they have really not heard from any merchants or affiliates in any formal way. They are mostly hearing from consumers.

With all of this in mind, and the fact that to date most of the affiliate lobbying that we’ve noticed is currently directed at retaining affiliate programs at the expense of NY consumers, we are forming our own group solely representing the interests of New York state consumers.

The goal of the group will be to advocate the immediate suspension of affiliate programs for New York-based websites unless/until there is success in any of these actions:

1) A successful TRO that prohibits NY from imposing sales tax on interstate merchants that currently do not do so for NY state residents.

2) A successful outcome of the lawsuit.

It was our consensus that most of the discussions we have noted thus far from affiliates currently are focused on retaining affiliate programs, even if it results in sales tax imposition on New York residents. While we all agree the sales tax rule change is a bad thing, the means to the ends are currently incompatible between affiliates and consumers. You have your priorities, we have to have ours.

We also determined that with no evidence of any truly organized effort by a merchant or affiliate trade group to attempt to file for a TRO, or join legal action, merchants are not taking this situation sufficiently seriously, and it is imperative to educate consumers within New York about exactly why this tax is being imposed, and that in virtually every case, the merchant can make changes to their business model to avoid having to impose such taxes.

Some merchants have taken the issue more seriously after customers dismiss their early claims that their hands our tied by letting them know we are perfectly aware of their affiliate programs and why they are important to this matter. We have decided to provide them with step-by-step instructions on how to temporarily suspend any affiliate programs for New York-based websites pending either a TRO or a positive outcome to the Amazon lawsuit.

The legal template being offered to merchants comes from those drafting the termination notifications for Overstock and other companies.

We will be spending the next several days compiling a list of the major online retailers and attempting to determine the paths they are choosing to take. Those intending to impose state taxes will hear from us. Clearly, the competitive situation between those companies imposing tax with an affiliate program and those who will not because of the lack of one is a compelling argument for consumers to make who shop on bottom line price, and many are doing so independently.

What frankly drives us at this point is the calendar. It will be easier for us to protest any attempts by merchants to simply cave in to the state before they do so instead of after. Merchants must hear from consumers because they must be willing to counter the natural inclination that some merchants might have to simply continue to profit from affiliate programs, even at the expense of consumers in this state, and inevitably those in others should this new tax formula spread.

(Linda moved this comment from Phillip that was in the wrong blog post to keep all NY tax info together. Copied from this blog post )