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May 24th, 2008, 08:27 AM #1An Example of the Depth of the Legislation
Wanted to post this up, then take a few days off from actively thinking about it, because I'm whooped and it's starting to show. It's primarily, IMHO, an example of why we need to look at this legislation, and everything we see written about it, with wider lenses than we might normally.
We all know I'm a New York affiliate. As such, I had the potential for creating a nexus in New York for any merchant that sells through links on my website. Added into that, are the other avenues for reaching the arbitrary $10,000 in sales over 4 tax quarters to New York residents.
What are these other avenues, however?
1.) Other affiliates, as we define it. That's you guys.
2.) More (and a true story):
There's a merchant that I have an affiliate relationship whose products are sold online only in New York, from his location in the mid-west. It's a small niche, and I highly doubt he was many NY affiliates.
So I reached out to him and said" Hey! Let me rep your xxxxxx into xxxxxx shops around here."
The thinking there would be that I'm a pay for performance rep for this (and potentially other) products. I'm 1099d, and just paid commissions.
I'm new to this kind of relationship, so it COULD be that technically that was considered a nexus previously. What it DEFINITELY means (the way I read this) is that if I sell $10k worth of xxxxx, the merchant now has to collect sales tax for all online purchases made from his site by New York residents.
I also feel, as a decent citizen and businessman, that I have to turn around and point this out to the merchant, potentially costing me the relationship. (I'm still reading more about "factory reps" and how they play into this legislation. I, too, have been focusing more on the traditional affiliate implications so far).
Someone PLEASE correct me if I'm wrong... I have a lot of money hanging out there these days.
So it goes well beyond what we normally discuss at these boards, with each piece potentially affecting every other piece. Like I said, I'm still fully getting my head around what it means for this second kind of relationship, but to me, the TSB is even more damning in this case.
May 24th, 2008, 10:30 AM #2
From my (limited) understanding, this kind of relationship would constitute a nexus, even before this new law (and even without the $10k threshold and without you being a NY resident). Physical solicitation inside the state by a commissioned sales rep is a nexus.
May 24th, 2008, 11:34 AM #3
May 24th, 2008, 02:27 PM #4Originally Posted by MichaelColey
if you are an independent rep (i.e. the offline relationship) and are 1099'd, it may be your responsibility to register with NY, acquire a sales and use tax license, and collect and submit the taxes for your direct sales.
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