Warning – New Affiliate Sales Tax Problems – Minn, Conn, Hawaii

Thursday, March 5th, 2009 at 10:53am by Linda Buquet

We knew once NY passed the law others would follow. I recently blogged: Warning – California “Affiliate” Online Sales Tax Proposed. (I have some big news coming about CA so stay tuned.)

Now Minnesota, Connecticut and Hawaii all have proposed, pending or enacted bills to change nexus to include online retailers that have affiliates in the state. Kellie from Affiliate Fairplay just broke this news on Twitter and is asking people to help spread the word. Here is the twitter discussion.

Kellie tweeted: “This is no longer a state issue but a CRITICAL industry issue!”

Jangro said: “how many states must pass an “Amazon Tax” before merchants stop firing affiliates and face facts that all states will get theirs?

I couldn’t agree more with both of you!

I just got wind of this so need to do a little more research and re-read all the bills again. Here are links to all of the bills.

Minnesota Bill
Connecticut Bill
Hawaii Bill

UPDATE 3/9 – Add Tennessee to the list! See Internet Retailer:
More states follow New York’s efforts to tax web sales from affiliates

UPDATE 3/12 Melanie posted this with some actionable links about what you can do to prepare for this. Many States Adding Internet Tax

There is a MAJOR effort underway to try stop the CA bill with associations and organizations much bigger than our little industry. Will give you more info as soon as I can release it.

New here? Subscribe to RSS feed or follow me on Twitter. Thanks for visiting!

#1 Regina Richards wrote on Thursday, March 5th, 2009:

I have to come out and say it: this is a rather frightening and disturbing change that’s taking place. I hope that, as an industry, we’re able to start making some positive headway soon.

#2 wizdomheard wrote on Thursday, March 5th, 2009:

The Laws constantly change here in the USA therefore we just have to stay informed. Thanks to People like you Linda.

#3 Rob, BtG wrote on Thursday, March 5th, 2009:

agreed, this is a serious problem that will negatively impact nearly all bloggers and ecommerce sites. in addition to supporting industry groups against the “Amazon Tax”, bloggers need to alert others, and contact their senator and congressperson to fight this.

#4 Linda Buquet wrote on Thursday, March 5th, 2009:

Thanks Regina, wizdomheard and Rob for weighing in. Anything you can do to help spread the word is appreciated.

#5 Justin Hitt wrote on Thursday, March 5th, 2009:

These bills go a little further to include independent agents (like sales representatives, commissioned or otherwise.) Any ideas on cooperating with Sales and Marketing trade associations to lobby against this type of measure.

It’s also not clear if a “sales and use” license would be required in every stay where you may pick up a customer, or every district that may require such licensing. Looks like they are also trying to wrap up mail-order into this too.

I know the states need money, but there must be a better way rather than burdening a company with 1,200 different taxing jurisdictions where customers may or may not reside.

The Direct Marketing Association has talked with a Senate Committee on the issue, relating it to “taxation without representation.” I’m spreading the word.

Sincerely,

Justin

#6 maranda wrote on Thursday, March 5th, 2009:

You’ve done a great job getting the word out about this, Linda. It’s a good thing you pointed to Melanie Seery’s blog on this matter. If there’s any advice for affiliates in those states affected to listen to, it’s hers. She has a pretty thorough post on the subject of how to prepare if these proposed bills are passed: http://nyaffiliatevoice.com/2009/03/how-california-affiliates-can-prepare .

#7 Linda Buquet wrote on Thursday, March 5th, 2009:

Thanks so much Maranda for linking to Melanie’s blog post.
Great information!

#8 URGENT Minnesota Affiliates - Sales Tax Senate Hearing Thursday - 5 Star Affiliate Blogs wrote on Thursday, March 5th, 2009:

[...] blogged a warning on March 6th that Minnesota, Connecticut, Tennessee and Hawaii all have pending Sales tax [...]

#9 Urgent: California Affiliates - Group Letter Opposing AB 178 - 5 Star Affiliate Blogs wrote on Thursday, March 5th, 2009:

[...] issue. If this bill passes in California, a firestorm of bills are sure to follow in other states. (Other states already have pending [...]