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  1. #1
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    National Movement To Collect Online Sales Tax
    Related to this NY tax situation -

    "On Tuesday (today), Washington joins 18 other states that require some e-commerce businesses to collect sales tax. About 1,100 online retailers have volunteered to collect, and in return, Washington promises not to sue them for back taxes they might have owed. Three more states are on the way to adopting the law."

    "National Movement

    Scott Peterson, executive director of the Streamlined Sales Tax Governing Board, said that the consortium is recruiting mores states and seeking bill sponsors in Congress to create a national system for online sales tax collection and remittances. Remittance means sending the taxes collected to the jurisdiction of the buyer."

    http://seattlepi.nwsource.com/busine...ml?source=mypi

  2. #2
    Beachy Bill's Avatar
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    Quote Originally Posted by Trust
    ......Remittance means sending the taxes collected to the jurisdiction of the buyer.......
    That part fits the "Use Tax" portion of the Sales and Use Tax statutes that exist in 45 of our states. And, unfortunately, that is probably where all of this mess is eventually headed.
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  3. #3
    Life is Supposed to be Fun! Rexanne's Avatar
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    Quote Originally Posted by Trust

    "National Movement

    Scott Peterson, executive director of the Streamlined Sales Tax Governing Board, said that the consortium is recruiting mores states and seeking bill sponsors in Congress to create a national system for online sales tax collection and remittances. Remittance means sending the taxes collected to the jurisdiction of the buyer."

    http://seattlepi.nwsource.com/busine...ml?source=mypi


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  4. #4
    ABW Ambassador meadowmufn's Avatar
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    Oh
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  5. #5
    What's the word? Rhia7's Avatar
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    I had a feeling that the move to collect sales tax for online transactions wouldn't remain solely a New York issue.
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  6. #6
    Newbie Rolet's Avatar
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    This is not new..... This bill was introduced and passed years ago, yearly new amendments are added, your local elected officials have been influencing this legislation for years...

    For more up to date information please see the following links:
    http://www.pff.org/issues-pubs/artic...nardmilken.pdf
    http://tax.cchgroup.com/news/taxbrief_09-01.pdf
    http://www.ncsl.org/programs/fiscal/tctelcom.htm

  7. #7
    ABW Ambassador JudiMoore's Avatar
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    Am I missing something? If all online sales required sales tax, wouldn't that remove the need to remove affiliates according to their location? If all the programming issues required to collect and distribute tax according to the buyer's location can be worked out, then wouldn't it be back to business as usual except for the buyer?

  8. #8
    Troll Killer and best Snooper!
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    I believe you're right, Judi. I think it's better for the AM biz (affiliates/merchants/networks) to have one unified program that governs online sales tax than "50 flavors," one for each state. That would, among other things, prevent states like New York from making up any old random BS that they want to tack onto legislation.

    Some smaller merchants might be overwhelmed by the procedural stuff I suppose.

    I talked to my dad, a retired CPA, about the recent legislation in NY. He said that since he began working in accounting in the 1940s he can remember attempts by state legislatures to collect tax on catalog purchases from out-of-state companies. It always failed, he said, because it put an undue burden on the catalog companies to collect and disburse the funds. I wonder if that argument is relevant today?

  9. #9
    Advocate mellie's Avatar
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    Interesting. I would think that no one could use the undue burden excuse because of the technology that exists. Everything is much easier with computers. I can see it might be a pain to do quarterly but really not quite a burden.
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  10. #10
    ABW Ambassador sjangro's Avatar
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    Quote Originally Posted by jmoore61103
    Am I missing something? If all online sales required sales tax, wouldn't that remove the need to remove affiliates according to their location? If all the programming issues required to collect and distribute tax according to the buyer's location can be worked out, then wouldn't it be back to business as usual except for the buyer?
    It would certainly seem so, Judi. It would likely remove affiliate marketing from being a tax criteria that could be eliminated, moving it back into the "irrelevent to the issue" category where it belongs.

    A big "oh crap" here is that some people shop online to avoid their own state's big sales tax. Just like we in MA drive up to NH to buy jewelry, appliances, and electronics. (Shhhh.)

    I think by now ecommerce has so much adoption that in reality it won't matter much in the grand scheme.

  11. #11
    Antisocial Media Expert ProWebAddict's Avatar
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    Quote Originally Posted by mellie
    Interesting. I would think that no one could use the undue burden excuse because of the technology that exists. Everything is much easier with computers. I can see it might be a pain to do quarterly but really not quite a burden.
    If you were a small merchant or heavy ebay seller you might think differently. Especially considering that different regions of different states have different tax codes. So it's not just 50 different taxes.

    Couple that with sending in the payments 4 times per year; did you know that some states don't accept electronic payments for quarterly payments.

    So how many payments does that make per year? Yikes, I don't even want to think about the states with 25 different tax regulations.

    Besides if a computer can do ALL of that, don't you think that the software would be expensive? Especially if it becomes law then savvy software owners will probably jack up the price. It's not like you can pay $19.95 and have Turbo Tax handle everything.

    I hope these efforts fail big time.

  12. #12
    Analytics Dude Kevin's Avatar
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    I didn't go through all the docs Aunesty posted, but the one I've been reading the most about lately is the effort to make the internet tax, if you will, flat rate regardless of the state of the buyer... i.e. 4% sales tax for all.

    A little less burdensome, but of course causes all kinds of other issues, like "but my State doesn't collect sales tax!".
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  13. #13
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    Quote Originally Posted by sjangro
    It would certainly seem so, Judi. It would likely remove affiliate marketing from being a tax criteria that could be eliminated, moving it back into the "irrelevent to the issue" category where it belongs.

    A big "oh crap" here is that some people shop online to avoid their own state's big sales tax. Just like we in MA drive up to NH to buy jewelry, appliances, and electronics. (Shhhh.)

    I think by now ecommerce has so much adoption that in reality it won't matter much in the grand scheme.
    I'm with Judi and Scott here, in my thinking where this will go, what it means to us and how it'll impact our sales in the general, collective sense.

    The biggest issue is compliance and complexity in implementing these things. Many merchants want to advertise "no sales tax" for sure, but another very large headache they all want to avoid is compying with each state's requirements. Streamlining things is the way to go, if there's to be a sales tax online. Without streamlining, anyone with a shopping cart has HUGE headaches and it impacts the small and medium businesses online in a way that stifles online growth, and therefore, our economy and our profession.

    Streamline, I can tolerate it, as most likely can. Unstreamlined is a cluster fark.

  14. #14
    Affiliate Manager Alan Hamilton's Avatar
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    Quote Originally Posted by Donuts
    I'm with Judi and Scott here, in my thinking where this will go, what it means to us and how it'll impact our sales in the general, collective sense.

    The biggest issue is compliance and complexity in implementing these things. Many merchants want to advertise "no sales tax" for sure, but another very large headache they all want to avoid is compying with each state's requirements. Streamlining things is the way to go, if there's to be a sales tax online. Without streamlining, anyone with a shopping cart has HUGE headaches and it impacts the small and medium businesses online in a way that stifles online growth, and therefore, our economy and our profession.

    Streamline, I can tolerate it, as most likely can. Unstreamlined is a cluster fark.

    I tend to agree with this scenario with a couple add ons. To assume that "if" a national streamlined tax system was implemented, we would return to business as usual may overlook changes that merchants would likely implement to their affiliate programs. Whether individual states create a cluster stoink, or a national system is someday implemented, merchants will have to offset the costs associated with collection and submission.

    Historically, when costs increase, consumers and sales forces often feel the effects through lowered commissions and higher retail prices. This would be especially true on product lines in which slim margins drive sales. One way or another, we would all be affected, but from the collection and submission end, a national flat rate ($#!!@!#@!) would be more "convenient" if you can swallow "convenient" and "tax" in the same sentence.
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  15. #15
    ABW Ambassador meadowmufn's Avatar
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    Quote Originally Posted by mellie
    Interesting. I would think that no one could use the undue burden excuse because of the technology that exists. Everything is much easier with computers. I can see it might be a pain to do quarterly but really not quite a burden.
    It might be easIER, but by no means "easy" because there are more than 12,500 tax regions in North America. Bigger companies may be able to implement that, but I'm guessing it would cause major headaches and cost thousands of dollars for small businesses to implement.
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  16. #16
    Life is Supposed to be Fun! Rexanne's Avatar
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    TAXATION WITHOUT REPRESENTATION - it stinks - That's why a load of tea got dumped in the Boston harbor more than 200 years ago. Grrrrrrrrrr

    We need a legal opinion, as Haiko said. All this suposition and guessing is bound to make us all crazy.
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  17. #17
    ABW Ambassador JudiMoore's Avatar
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    is recruiting mores states and seeking bill sponsors in Congress
    Adding burdensome tax collection sticks, but the bottom line is that this is taxation with representation. We just don't like what the representatives are doing.

    Back in the era of the tea party it was the King who got to decide where his taxes got collected.

  18. #18
    Affiliate Manager Alan Hamilton's Avatar
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    Quote Originally Posted by jmoore61103
    Back in the era of the tea party it was the King who got to decide where his taxes got collected.

    True, and in addition to the king, dukes, lords, governors and landlords could also impose added taxes upon their charges. We could do the tea party gig again, but this time the tea would be of the "Texas" variety!!
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  19. #19
    Classic Rocker Mack's Avatar
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    Whatever they do I just wish they would hurry up and do it. The entire issue can be debated to death. I just hope the final result is something that is easy on the merchants and not another nightmare tax scenario to deal with.

  20. #20
    Life is Supposed to be Fun! Rexanne's Avatar
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    Quote Originally Posted by Alan Hamilton
    We could do the tea party gig again, but this time the tea would be of the "Texas" variety!!
    Oh let's do it! LOL
    Peace,

    Rexanne

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  21. #21
    Affiliate Manager Steve Root's Avatar
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    This is a tidal wave that won't be stopped. States all over the country are experiencing budget shortfalls and they're looking for ways to increase their "revenue streams", and raising taxes is how they do it. With online sales now in the multi-billions of dollars, this is an opportunity states just can't pass up. To have any chance of being a player at the table regarding this issue, affiliate marketers need to get organized and fast! Many times in politics he who whines loudest and longest wins. Most other industries have lobbyists to represent their interests in the governing process, now would be a good time for affiliate marketers to join the battle and get some hired help. But, before we can get to that step, those people who are "Leaders" in the affiliate space need to step-up and set an example for other to follow. Otherwise the battle's already lost.

  22. #22
    Affiliate Manager Alan Hamilton's Avatar
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    You may have missed the many posts regarding NY law and legal counsel and association lobbying that have been going up here for some time now. You may want to do some searching on threads here to get you up to date with where the members in this forum are on the issues. But you are certainly on the right track with your thoughts!
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  23. #23
    Outsourced Program Manager e-Gazer's Avatar
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    Quote Originally Posted by sjangro

    A big "oh crap" here is that some people shop online to avoid their own state's big sales tax. Just like we in MA drive up to NH to buy jewelry, appliances, and electronics. (Shhhh.)
    I agree this could result in some lost customers and/or conversions and sales, so that's something to keep our eyes on, but online shoppers don't only shop online for the tax break (though that's a plus). I mean, they're willing to pay shipping costs, that amount sometimes to more than the tax itself, if/when due. For example, 8% of $300 is only $24. Shipping can be that much or lots more, depending on the merchant, the product, and distance it has to travel. Even return shipping fees on refunds/exchanges haven't deterred the masses from shopping online entirely even if they hinder sales potential slightly.

    I think the pros of shopping online for those who enjoy it and/or find it beneficial will still outweigh the cons, personally in the long run. The comfort of shopping from home, etc. - finding unique products not found locally in B&M stores, etc. - and I'm sure merchants will come up with new promotions to compensate, like "save the tax" (where it amounts to a 10% discount or whatever your highest tax might be), etc. - B&M merchants locally have been doing that for years. They still charge the tax but advertise it as 'save the tax' or 'we pay the tax' and then just give you a discount that is equivalent. They could even develop dynamic promotions to identify tax % by location and apply the equivalent discount which would vary by customer/location. So I don't see that as a major pitfall, though it will require some added creativity. That's what marketers are for.

    I agree that going national across all states/regions/locations is, in the final analysis, probably not going to mean anything different for most affiliates - other than those NY-ers who have already been hugely affected by the mass dumping that's been going on by merchants scrambling to protect possible liabilities. But I think going national would be an improvement from what we're currently facing (unique legislation state to state - just unique enough to cause headaches for merchants).

    I also think that while we're all still a bit shell-shocked by trying to understand it all and figure out what to do that results in the closest thing to a win:win we can come up with (speaking for OPMs/AMs/Merchants/Networks here), that down the road, the outcome in the grand scheme of things may not be as bad as we think it will be, once the dust settles a bit.

    As I said to a NY affiliate friend of mine today, this industry is notorious for overcoming obstacles, challenges, etc. We're used to hurricanes like this - this is just a new type of hurricane. We're still all here despite it all - each time, we just put our heads together, come up with solutions, and keep on truckin'. That's what I LOVE about this biz!

    This industry is chock FULL of brilliant minds (mine excepted of course ) - I have no doubt this will be just another notch on the industry belt in due time marking another mass upheaval (overcome) in the history of affiliate marketing.

    I hope this doesn't mean the end of our industry - but I can't see how it does. Too many smart people with great ideas are what makes the affiliate world tick. They won't go down without a fight. And thank gawd for that.

  24. #24
    Life is Supposed to be Fun! Rexanne's Avatar
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    Quote Originally Posted by e-Gazer
    I think the pros of shopping online for those who enjoy it and/or find it beneficial will still outweigh the cons, personally in the long run.
    Thanks for the positive post, Liz.
    Peace,

    Rexanne

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  25. #25
    Outsourced Program Manager e-Gazer's Avatar
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    No prob - just wanted to share my thoughts!

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