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July 28th, 2008, 09:23 PM #1Your Tax Fighting Dollars At Work
Again, a thank you to all who contributed funds to the NY Affiliate cause.
We had a QUALITY day today, culminating with an excellent session with attorney Mark Klein of Hodgson Russ. I would encourage all merchants looking for advice/counsel on this matter to engage their firm, as it will be worth every penny if the loss of NY affiliates has affected your affiliate revenue stream.
To sum up briefly, with much more detail to follow:
1.) The June 30th TSB is the "law of the land" at the moment: NY Affiliates engaging in "safe practices: (including: email campaigns, PPC, et al NOT directly selling merchants, but rather their own sites)" are A-OK, and as such, allow merchants to SUCCESSFULLY REBUT the presumption of nexus providing the merchant takes the steps outlined in that memo, including getting the signed "promise" from affiliates, and terminating those that don't sign it, or in good faith, follow it.
2.) We will be reaching out to Mark again to compose a companion piece for merchants, outlining their responsibilities should they decide to work with NY affiliates (which, as above, is above board.) We need to work with Hodgson Russ on the price for their time to do so.
3.) Second tier commissions are also OK, supposing that any NY affiliates in any NY Affiliates second tier also adhere to the package we are putting forth (moreso, the June 30th TSB)
4.) At greatest risk, per this reading of the law, are loyalty sites that employ (via commission, cash back, etc) NY residents to encourage other NY residents to shop through their sites. (i.e. A NY Church asking NY parishoners to buy through it's affiliate links because of the commission that will be gained, etc)
5.) DTM PPC is not rebuttable... PPC to an affiliate site without mentioning the name of the merchant: rebuttable. Ditto for newsletters, email campaigns, etc.
6.) Incorporating in another state, or claiming dual residency, etc, is NOT rebuttable. Merchants pushing that as a solution are doing so at their own peril. Residency, as far as defining that in the case of affiliates, means that you have a place to hang a shingle here, or sleep here, or own any property here. Period. In other words, clever means of disguising your residency is a bad practice.
In the end, this is still an awful piece of legislation, that at it's core, affects not for profits more than it affects traditional affiliates. Merchants dumping traditional affiliates failed to fully understand the spirit of the law (granted, that spirit was far better spelled out on June 30th... about 45 days too late).
Next steps for your tax fighting dollars is building that companion piece to be sent to merchants that properly defines the law and the TSB's, as well as organizing an effort to have matching legislation to the June 24th Senate repeal drafted AND sponsored in the NY Assembly.
More on this in the coming days, as we assign duties, digest more the good news MOST of us recieved today, etc.
My personal thanks to Mellie, Brian Littleton, Haiko de Poel, and Andy Rodriguez for their time, trouble, and financial support of this effort. Additional thanks to Kim at 4Checks, and Deb at Team Loxly for their attendance, and willingness/desire to understand.
This, by no means, is over. The only "fail safe" is to have this clap trap legislation fully repealed. The Amazon/Overstock case is likely, per Mark Klein, to drag on for 5 years, unless it's repealed early.
We have much work to do, and at present, only a few of us to do it. Any and all help will be appreciated.
July 28th, 2008, 09:48 PM #2
I know you stated you will be expanding on this. But I'm specifically curious about the issue of newsletters / emails. Mentioning Merchant X offering free shipping in a newsletter is ok or not ok? I see the statement about ppc dtm not mentioning the merchant, but the newsletter landing on your landing page sounds like it may be ok.
Again, thank you for the detailed information you've already imparted and the time you've given to this issue.
July 28th, 2008, 09:54 PM #3
Ok: Please come to Knight01dotCOM for great sneaker deals.
Not ok: Please come to Knight01dotCome for great sneaker deals at PayLessdotCom.
Splitting hairs? You bet. But you should have heard the marshmellow discussion, on how mini marshmellows aren't taxable in NY since they are baking ingredients, but regular size were as candy. Since that was ridiculous, it was eventually changed to ALL marshmellows are non-taxable, which apparently started the "Great Peeps Debate" in easter season 1993.
Ruling? Peeps aren't taxable.
Further: Twix bars have a special tax mention in NY. Taxable if you buy them in the candy aisle, not taxable if you buy them in the cookie aisle.
If Loxly's or Mel's recording of this event sound ok, there's about 8 minutes where we discuss odd NY tax instances. And they're interesting, if you enjoy minutia.
July 28th, 2008, 10:00 PM #4Originally Posted by Kevin
July 28th, 2008, 10:06 PM #5
Side note: I think ANY dtm ppc efforts are walking a dangerous line. The key here is advertising YOUR site, not the merchant directly. NY has no issue with you advertising YOUR business. They take umbrage, however, if you are compensated on a pay for performance basis WITHOUT having a website in between that is yours. Or, if you're actively using door to door, telephone, or personal contact type means to advertise ANYTHING, except your business.
NY based Clubs and organizations specifically are singled out here, and MUST have a disclaimer on their websites that they don't utilize direct contact with New Yorkers in order to sell on behalf of a merchant. Traditional (non-loyalty, web only) affiliates do not have to post such a disclaimer, but I don't see the harm in doing so anyhow. (Up to you and your merchants to work that one out... Be prepared to see some interesting language in your affiliate agreements with merchants that TRULY get this legislation).
July 28th, 2008, 10:13 PM #6
Your work on these tax issues is admirable.
One thing: I don't understand what "dtm" means?~Rhia7 -- Remember the 7
July 28th, 2008, 10:19 PM #7
"Direct to merchant"
Meaning your Google ad goes "straight" to the merchant, often giving the appearance that the merchant may be paying for it themselves.
I have "straight" in quotes because in essence, the link goes "straight" to a tracking URL of some sort, THEN to the merchant, but in the eyes of the consumer, they clicked on an ad posted by the merchant, not by another website.
July 28th, 2008, 10:20 PM #8
July 28th, 2008, 10:28 PM #9
I should point out that I didn't have time to look through the list as to whom "publically" stated a donation to the fund as opposed to anonymously donating, so my thanks above were brief. You know who you are, and more importantly, we know who you are, so thank you.
July 29th, 2008, 12:21 AM #10
I enjoyed the minutia.
It was an informative session, absolutely, and Mark Klein was not only well educated/experienced on the issue/topic but a great speaker to boot. I appreciated that he took the time to understand our industry better in order to better field the questions that got tossed his way.
My thanks to Mellie and Kevin for putting this together as well, and to all others who helped make it possible. This industry is a lifeblood to so many of us and when such important issues come down the pipes that affect it, it's important we work together for positive change. I'm glad I came.
I'd still like to know though how international companies are affected (is there any difference in how the law applies to them?) as there was not enough time to cover everything - there's just too much - but I suppose that will have to be addressed at a later date/time.
Irrespective - all in all, a good meeting and dinner following at Buca di Beppo was great too (pope in a box!) - what a great recommendation that was!
July 29th, 2008, 05:46 AM #11
It was a great meeting and we all learned a lot. And while there is actually a solution available we still have to work on getting the work out. Then there's the long term solution of a repeal.
As Kevin mentioned we will be in touch with the lawyer again to have him draft the letter on our behalf to merchants and networks as well as a template of the agreement the merchant must have.
We will also be in direct contact with NYS Tax Department.
We will be keeping in touch with the Assembly and Senate (State level gov't).
Also for the NYS tax issue another step is the Summit. At that time we can get the word out to many at both the NYS tax session and direct at the booths.
July 29th, 2008, 05:54 AM #12
Glad to hear your meeting went well guys and gals. Sounds like the attny. was on the case. Very cool!
Now, for the most important thing: PICTURES?! LOLPeace,
Loving Everyone's Child Creates Magic
July 29th, 2008, 06:51 AM #13
Liz, we'll be sure to get the international aspect addressed. I'll be in touch with you to get the specific question(s). Thank you again for being at the meeting.
July 29th, 2008, 07:44 AM #14
Thank you's are due all around.
The attorney was very educated and well versed regarding NY tax law, as well as engaging and genuine in wanting to find a solution.
Kevin, this is a terrific meeting summary. I will be in touch to see how we can help further with the legal drafting process.
I will upload pictures later on tonight.
Thank you again, to everyone that attended!Kim Salvino, Client Services Director, Performance Horizon Group
Reach me at kim.salvino(at)performancehorizon.com or on (443) 617-4036
July 29th, 2008, 09:46 AM #15Originally Posted by Rexanne
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