Here is more in the online taxation and affiliate issue. Originally we noted that states such as Colorado passed laws at an attempt to obtain sales tax on sales that were considered to have been originated through an affiliate in their state. Originally it was Amazon that took the first step and you can read the original article here entitled Law Dictates Behavior where Amazon’s response was to simply terminate all affiliates in Colorado from their affiliate program. Now the domino’s fall.
First it was Amazon, and today I see a smaller online retailer with an affiliate program that you may or may have heard of. Regardless I will remove their name and show you the email text here:
Due to the recent tax laws regarding nexus involving online affiliate publishers in the state of Colorado (legislation known as HB 10-1193) we will no longer be able to accept new publishers from Colorado into our affiliate program.
Additionally, we will be immediately terminating our relationship with any publishers that were already joined. We sincerely apologize for the abrupt interruption in the program if this affected your account directly. This, unfortunately, affects our ability to continue business with loyal publishers and we understand that we are losing valuable relationships due to these new laws.
Your publisher account will be closed as of May 18, 2010, and we will no longer pay advertising fees for sales referrals after that date. All sales made prior to May 18, 2010 will be credited to you and paid out in accordance with our regular schedule on June 10, 2010. Please accept our apologies and we appreciate your understanding. Hopefully in the future, these laws will be reversed in order to keep the networks diversified and growing.
Not sure why I got it as I am not a Colorado based affiliate. However there you have it. The wheels have been set in motion and those that have sites relying on affiliate revenue within certain states may have to move. Of course that begs another question about the business with the affiliate relationship and where they are incorporated, or where their entity is considered to reside, verse where the employees or owners reside. Could it be as simple as just re-incorporating in another state and obtaining a post office box? I don’t know for sure but I feel for those that may have to either shut down their business or move their business and families to another state.