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"NY Threatens Online Stores With Sales Tax Audit"
On fox news if ya want to read it. Wonderful just wonderful
My state is already asking me questions on our sales etc. I am wondering just when it will happen.
It sounds like to me that New York needs to cut their bloated budgets and concentrate on in-state tax enforcement rather than trying to bully Internet retailers or heap a bounty off giants like Amazon and Ebay.
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If you own a .com and you are a New York State resident, now New York considers you to have a Nexxus in the State even if you do not have a physical presence in the State besides your self and your computer.
Watch and wait.... Something will happen real quick as New York will try to make an example against a larger .com
It will be very interesting once things unfold in Federal court.
[edited by: MLHmptn at 10:26 pm (utc) on May 6, 2008]
If you are an independent sales rep living in New York and selling products or services for an organization outside of new york, sales tax has always been assessed. This new code is stating that an online affiliate relationship is close enough to the traditional sales rep relationship so that sales tax should be paid. Direct sales to end users are not affected.
Furthermore, if the affiliate generates less than $10K per year, you don't have to pay.
The tax lawyer from the DMA was pretty confident that this would be overturned in the courts. A lot of the verbage was excessively vague and overencompassing. The state is asking merchants to sign up under their own volition with the threat of audits, and most of the big merchants on the call sounded like they were going to do that. However, a surprising number also seemed to be holding out until they have a better feel for how the wind is blowing.
Amazon sells merchandise exclusively online but the state contends it meets the criteria for sales tax collection because of its "associates" program. Associates receive up to 10 percent in referral fees from Amazon by creating links on their blogs or websites that enable people to click through and purchase products.
Since there are Amazon associates in New York, the state contends they are considered sales representatives under the new law.
All affiliate marketers should keep an eye on this case.