Affiliate Nexus Tax

Over the past three years, there has been an increase in proposed and passed legislation around internet retail tax in the United States. A result of this has been affiliate tax which has left countless affiliates losing their source of income in the states where the legislation has been passed.

Over the past three years, there has been an increase in proposed and passed legislation around internet retail tax in the United States. A result of this has been affiliate tax which has left countless affiliates losing their source of income in the states where the legislation has been passed. Amazon has closed its affiliate programme doors to affiliates in Illinois after the governor signed a law requiring online businesses to collect sales tax for goods sold in states where they have a "business presence." Online retailers typically do not collect sales tax from customers in states where they do not have a business presence, but the interpretation of presence is getting broader as states seek new revenue. Unfortunately, state governments that face budget deficits predictably turn to affiliate tax as a solution to their problems, despite the fact that the reality is, a step like this harms businesses and doesn't guarantee additional income into their state's budget at all.

The affiliate / advertising tax laws have now been passed in 5 states around the country (New York, Rhode Island, North Carolina, Illinois, and Arkansas), and more states (e.g.: California, Connecticut, South Carolina) are seriously considering similar legislation now.

If the law passes in California, many believe that the future of affiliate marketing in the United States could be doomed. In some instances, retailers like Overstock.com are already passing the money they would have spent on their affiliate programme back to their customers - giving customers a credit worth $30.