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October 8th, 2008, 07:36 PM #1Federal Bill to Exclude Affiliates from Nexus
I received an encouraging email from our lawyers office. There is bill in the US senate that would exclude affiliates from the definition of nexus. The bill is sponsored by Jim Bunning, Senator from Kentucky. Of course this is the very early stages as it was referred to committee but having a sponsor increases the likelihood of passing. I blogged about it in a little more detail but feel it's important to quote some of it here.
The bill was read twice, as required, and was referred to the Committee on Commerce, Science and Transportation. The bill number is S. 3670
Now is the time that all affiliates should contact their Senators. This is not just a New York issue. It needs to be addressed by all states. If this law does not pass the gates will be open to all states to enact similar laws.
I am getting ready for my trip to San Diego for Share A Sale Think Tank but I am still following up with this. It is critical for all affiliates to take action.
Your Affiliate Voice needs to be heard.
Now is really the time for your Affiliate Voice to be heard.
October 8th, 2008, 07:53 PM #2
Hopefully that turns out to be great news Mellie. By chance, do you know if anything in the bill prohibits states from enacting their own legislation outside the federal version? In many many bills over the years, a piece of federal legislation normally includes language like: "this shall not be contrued as to interfere with, override, take precedent over or void a states right to enact legislation that may go beyond the scope of this act etc etc."
Let's hope for the best as this would be a major step forward. Thanks for sharing this.
October 8th, 2008, 07:54 PM #3
Former star pitcher Jim Bunning was a Congressman for 12 years and has been a US Senator for 10, and this is the first thing he has ever done that I can agree with.
Here's hoping that it gets to the Senate floor and passes, and also gets through the House. The final step may prove to be the toughest - an internet-savvy chief executive who understands something about affiliate marketing and will sign the bill into law.
October 8th, 2008, 08:35 PM #4
I am trying to post a quick answer but am finding that difficult. I will answer in greater detail tomorrow.
The short answer is - This law seeks to define physical presence within a state and to exclude affiliates from creating a physical presence within a state. This law would further clarify that affiliate marketing does not create a nexus. Defining presence on a federal level is what ALL affiliates and merchants need. If there is no physical presence, no taxes need to be collected by merchant.
It also reiterates NY's TSB's and our stand that as long as affiliates are the only connection there is no nexus.
October 8th, 2008, 08:41 PM #5
Copy of the introduced bill -> http://www.govtrack.us/congress/bill...bill=s110-3670
IN GENERAL — No taxing authority of a State shall have power to require the collection and remittance of a State tax by any person resulting from the electronic commerce of such person unless such person has a physical presence in the State during the taxable period with respect to which the tax is imposed.Continued Success,
The secret of success is constancy of purpose ~ Disraeli
October 8th, 2008, 09:06 PM #6
This is the paragraph that gave/gives hope:
(2) DE MINIMIS PHYSICAL PRESENCE- For purposes of this section, the term ‘physical presence’ shall not include--
(A) entering into an agreement to share revenue generated by an electronic commerce presence owned or maintained by a person who is physically present in a State;
October 8th, 2008, 09:10 PM #7Originally Posted by Alan HamiltonOriginally Posted by Haiko de Poel, Jr.Originally Posted by mellie
October 8th, 2008, 09:23 PM #8(B) Using the services of an agent (excluding an employee) to establish or maintain the electronic commerce in the State, if such agent does not perform the same services in the State for any other person during such taxable year.
The repeated use of the term "person" seems to nag at me, hopefully it will be more clearly defined when/if it comes out of committee as "merchant" or "entity" to avoid issues.Someday starts today
October 8th, 2008, 09:33 PM #9
Sigh. There are now several interpretations of this bill. I have sent emails requesting verification, not sure if I will hear back tomorrow or not. I will be traveling on Fri for Think Tank but if I get any updates I will post as soon as I can on Fri or Twitter someone to post for me.
The important thing to remember is that since there is now Federal legislation pending EVERY affiliate and merchant should take action to have their opinion heard. Now is not the time to take a wait and see approach. No harm will come from contacting your Senator, but harm may come from not doing so.
October 8th, 2008, 09:51 PM #10
October 8th, 2008, 09:57 PM #11
Good stuff gang - please everybody, take a moment to actually contact your senators and demand they enact such legislation. I promise that I will contact mine and hope everyone will do the same. Thanks Mellie. Thanks for your opinion also Aff Hound.
October 8th, 2008, 10:34 PM #12
Mel, you and Kevin and the NY gang certainly made great strides in killing this mess of a bill. Great job!
Sounds to me as if NYS got their greedy little a$$ handed back to them as they should have.Peace,
Loving Everyone's Child Creates Magic
October 9th, 2008, 09:49 AM #13
Mellie, you totally kick ass.
Hell has no wrath like a woman scorned.
I am starkly reminded of why we need people exactly like you to be heard in this industry.
October 9th, 2008, 06:06 PM #14
By NiftyGaloot in forum Minnesota Affiliate TaxReplies: 2Last Post: May 23rd, 2013, 05:53 PM
By pmassociation in forum Missouri Affiliate TaxReplies: 6Last Post: September 10th, 2011, 07:16 PM
By markwelch in forum California Affiliate TaxReplies: 5Last Post: March 20th, 2009, 02:51 PM