Forum Moderators: phranque
California proposed AB 178 on Feb 2nd which will require any company doing business in California to collect sales tax. Companies doing business solely online are not exempt.
How will this new tax law, if it is passed, affect affiliate marketers?
Here is the official government link, I hope it's ok to post it as an official resource. [democrats.assembly.ca.gov...]
a quote from the article, the result of the NY tax law.
New York passed a similar law, and was sued by Amazon.com. The New York Supreme Court dismissed Amazon’s claim, based on an extensive body of legal decisions defining the nature of nexus and upheld New York’s right to levy the sales tax.
If Amazon was willing to sue, and other states are moving towards NY like laws, how will this change the online and affiliate marketing landscape ?
[edited by: JS_Harris at 6:55 am (utc) on Mar. 20, 2009]
There should be a reasonable use tax collected by the feds for all interstate transactions ( not just internet ). I think 4% or 5% would be a good start. It's less than the 7 to 10% that these states are going to want to collect but in the long run the states may make more money from sellers/business that are legit when they pay their federal taxes. The feds can then pay these states their share based on the location of the buyer.
Certain, large online retailers have to pay these taxes anyway because they have a coast-to-coast, brick and mortar, *presence*. Could they be lobbying for this change? It would certainly level the playing field.
Hopefully Amazon or a large group of *online* retailers will make some sort of proposal to congress before all this takes hold.
