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March 21st, 2009, 10:31 PM #1Tennessee - SB 1741 and HB 1947Continued Success,
The secret of success is constancy of purpose ~ Disraeli
March 22nd, 2009, 06:57 AM #2
The news in Tennessee is actually encouraging. The fiscal notes on this bill presented to the committee members indicate that the Department of Revenue does note believe that having only affiliates would create a nexus.
According to the Department of Revenue (DOR), out-of-state dealers with
commissioned representatives in this state, who merely solicits sales for
such dealers, and whereby customers pay dealers directly, does not
make such dealers responsible for sales tax unless they have some form
of traditional nexus in the state.
March 22nd, 2009, 03:51 PM #3
- Join Date
- January 18th, 2005
March 22nd, 2009, 09:54 PM #4
I have some connections here in TN and so do a lot of my friends.
I did not even know about this, but then again I have been a bit disconnected lately.
If there is anything we can do here in TN, let me know please!
March 22nd, 2009, 11:57 PM #5
The detailed bill link is here:
I'm writing to both bill sponsors and to my own representatives about how this bill will backfire, as the companies will likely drop their affilaite programs in Tennessee, which will only reduce the amount of income they will see spent and accessed as sales tax. Not smart at all.
Last edited by Teesed; March 23rd, 2009 at 12:00 AM. Reason: adding
March 23rd, 2009, 12:29 AM #6
I just sent the following to the bill sponsors and my representatives, along with James White, Executive Director for the Fiscal Review committee. Mr. White's email can be found on the Joint Staff page of the TN General Assembly website at http://www.capitol.tn.gov/joint/staff/index.html#fr
Dear Senators and Representatives,
I would like you to consider the following scenario with regard to the SB 1741 – HB 1947.
It is my opinion that the success of this bill will reduce revenues, not increase them. It will lower incomes for residents of the state of Tennessee and consequently, sales tax revenues for the state.
I am an affiliate for CafePress, a custom apparel manufacturer based in California without a traditional nexus in Tennessee.
If this bill passes and becomes law, what they will likely do is drop their affiliate program for Tennessee, just as they did in New York after a similar bill. I do nothing in the transaction between the customer and CafePress besides help them find a product - something they can do via any search engine, only my job is to do it better. Once the customer finds the product via one of my websites, they are directed to CafePress, who accepts payment from the customer, prints and ships the product, handles customer service issues and everything else having to do with the sale. I don't even see the customer name or any other part of the transaction other than that on a certain day, product "x" was sold and the sale price. That is not a traditional transaction and shouldn't imply a nexus.
The issue for CafePress is that the end customer doesn't understand why they would be charged sales tax with a sale via an affiliate and not charged sales tax for a sale that did not go through an affiliate. In fact, in one shopping cart, there could be items that are there via an affiliate and some without an affiliate link. Imagine the confusion to the customer when one item has sales tax and another does not. Therefore, they decided to DROP their New York affiliates and I expect they will do the same with Tennessee affiliates.
Why is this a problem? Because it means about $xx,xxx less annual income for me. Meaning $xx,xxx less income (minus federal taxes of course) for me to spend in the state of Tennessee. That's around $xxxx less revenue to the state of Tennessee from me alone. The same situation would be in place for the other residents of Tennessee who are affiliates for CafePress, Zazzle and any similar company using affiliates in Tennessee.
Please vote this bill down.
I will be glad to speak to anyone regarding this issue to help clarify it.
Last edited by Teesed; March 23rd, 2009 at 12:39 AM. Reason: edit to show final version
March 23rd, 2009, 02:42 AM #7
I've just been told I'm incorrect in the shopping cart sales tax example - which is entirely possible and likely probable. So, if you're going to write against this bill, focus on the second part - that as a resident of the state, you will very likely LOSE income because of this bill which will nullify or even reverse and potential increased revenues from these laws.
March 23rd, 2009, 12:24 PM #8
Incredibly stupid idea
- Join Date
- July 5th, 2005
What are they thinking. This has already been a disaster for NY. If they go through with this, all they are going to do is have me move my place of business to another state that does not promote this type of idiotic bill.
This bill will gain the state nothing and more than likely hurt state revenue through other outlets.
Dumb Dumb Dumb.
March 23rd, 2009, 12:31 PM #9Originally Posted by whatsyourdeal
March 23rd, 2009, 12:35 PM #10
I think this is the beginning of a landslide, you will probably see numerous states following the NY Idiots and then what, merchants will outsource to india and we left here in the states will be looking for *ob.
March 23rd, 2009, 01:04 PM #11Originally Posted by AffiliateHound
March 24th, 2009, 10:21 PM #12
Originally Posted by AffiliateHound
- Join Date
- July 5th, 2005
A good example of a similar policy was when Cuomo took over as NY Govenor. he taxed the film and TV business right out of the state. NJ on the other hand offered tax breaks and pulled in hundreds of millions in Film and TV revenue.
While this is not exactly the same, the effect will be the same. There will definitely be states that hold out. We could all be doing business in Delaware one day
Well, there or Vegas...
March 24th, 2009, 10:30 PM #13
This is just so ridiculous, especially when the promotion happens online. What's the difference between me uploading content to Teesed.com from Tennessee or from Kentucky? The person is making contact with the content in the ether...
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