[affninja]

Hi Everyone!

Important Update from [MERCHANT]:

Unfortunately the Nexus Tax Law [link to PMA] has been evoked in relation to affiliates and therefore, forces out of state retailers to collect online taxes. Thus, [MERCHANT] will be removing affiliates in the states that have incorporated the Nexus Tax Law. We understand that this is disappointing, however we appreciate your support and are available to answer any questions you may have.

Should you have any questions please feel free to email us or contact your publisher representative at [OPM].

Emails like this make me smile. It was apparently sent out to everyone, makes no mention of states they're actually terminating, and tries to sound fancy using words like "thus," "therefore," and (incorrectly) "evoked."

[Herb ԿԬ]

apparently they haven't done their homework. it is possible to keep NY affiliates and perhaps some others if certain conditions are met.

[markwelch]

This is definitely a good example of "how not to do this."

Whatever the reason, when communicating with publishers about situations that might result in termination of the advertising relationship, merchants should be extremely specific. By being vague, this merchant is jeopardizing its relationships with publishers whom it never intended to terminate. While one effect of this mistake will be increased staff time to respond to concerned publishers' inquiries, the greater loss will be quiet abandonment by publishers who either fear that their efforts might be wasted (if termination might be coming) or who conclude that the merchant is "clueless" and thus not worth working with.

As noted, the merchant should be specific about which states have enacted advertising-nexus laws, and about how the merchant will handle its relationships with publishers in those states. If the merchant already collects sales tax for any of these states (or in states where legislation is pending), then its relationships with publishers in those particular states aren't in jeopardy, and the merchant should make this clear.

Publishers are worried about "immediate terminations without advance warning," so merchants can also benefit from clearly sharing their intent or plan -- for example, when Illinois enacted its advertising nexus-law this year, its effect was deferred and thus some merchants were able to provide reasonable notice (4 to 6 weeks). By giving reasonable notice to Illinois publishers, these merchants probably maintained stronger relationships with publishers in states where such legislation is pending (including California).

If the merchant isn't willing to invest the minimal time and effort required to monitor and maintain its own list of which states have enacted advertising-nexus legislation, then the merchant should consider just terminating the entire affiliate program (because such merchants are likely to be trapped by "gotcha" laws like New York's).

[JCrooks - buy.at]

The entire affiliate tax nexus situation is pretty complicated, and I've had to educate several merchants on the specifics by state. Some have accidentally dropped all affiliates because they misunderstood what the laws really meant!

It is so important for a merchant to do their homework before sending out communications like this. After all, if they don't take good care of their affiliates, their program can't flourish! There are enough posts both here in ABW and all over the web explaining this issue, there's plenty of help available to get this right.