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  1. #1
    Join Date
    January 18th, 2005
    Should Merchants terminate TODAY?
    I hope that the affiliate networks are affirmatively warning their merchants about the impact of the "immediate effect" clauses of the Hawaii and North Carolina laws, so that the merchants can consider whether to issue termination notices to web publishers today (before the apparent effective date of July 1).

    As discussed in another thread, if a merchant ships orders meeting the dollar threshhold ($10,000 or $2,000, depending on the state, to in-state residents referred by in-state affiliates), it may be "too late" to avoid the laws' impact by terminating web publishers in the state.

    Of course, most merchants with lower sales volume will have some time to consider this; and the majority of all merchants with affiliate programs probably don't meet the threshhold in a full year anyway, and thus wouldn't be affected.

    But large and medium merchants should be considering this issue RIGHT NOW, not only for Hawaii and North Carolina, but also for the other states which may secretly enact the "Amazon Tax" language into budget bills, only to be discovered a few days, weeks, or months later.

    Merchants should discuss with their attorneys whether it might be effective to send out "conditional termination notices," advising all web publishers (in all states) that their advertising relationship will end on the effective date of any "Amazon Tax" legislation enacted in any state where they "reside."

    Of course, it's important to keep in mind that "terminating" is not the only option, and might be the worst available choice. Alternatives include: (1) Collecting sales taxes for more states; and (2) Deliberately disobeying the unconstitutional laws (and budgeting for any potential costs, including legal fees).

  2. #2
    Join Date
    January 18th, 2005
    One other alternative, for a merchant confronted with enactment of an "Amazon Tax" in a state where the merchant is unwilling to collect sales tax, would be to examine whether the law's impact might be legall avoided through changes in policies and implementation of "administrative procedures."

    In New York, several merchants have adopted this well-documented procedure. It's impossible to know in advance whether similar procedures will be effective in any other states, since we don't know how the tax-enforcement agencies in those states may interpret these laws.

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