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  1. #1
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    North Carolina tax agency's interpretation of Advertising-Nexus Tax Law?
    I can't seem to find any information about how North Carolina's Department of Revenue may interpret the new Advertising-Nexus Tax Law. I searched and searched through the North Carolina web site, but the NC tax agency's web site appears to be extremely out-of-date (the sales-and-use-tax "what's new" section was last updated in November 2008).

    I decided to look for North Carolina's interpretation, after finding the Rhode Island tax agency's notice containing its preliminary interpretation of Rhode Island's Advertising-Nexus Tax Law. The states' laws are nearly identical (to each other and to the New York law enacted last year), but New York and Rhode Island apparently interpret the law very differently (New York interpreting the law extremely narrowly, focusing only on specific "soliciation activivities" by publishers; Rhode Island looking solely at the way compensation is computed for advertising placements).

  2. #2
    Tax Paying Member
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    November 14th, 2005
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    Chapel Hill, NC
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    Quote Originally Posted by markwelch
    the NC tax agency's web site appears to be extremely out-of-date (the sales-and-use-tax "what's new" section was last updated in November 2008).
    NC has been so mismanaged that they don't have money to keep the computer system uptodate.

    I decided to look for North Carolina's interpretation
    I think that the NC legislature just jumped on the sales tax band wagon and really have little or no understand of what affiliate marketing is all about.

    The states' laws are nearly identical (to each other and to the New York law enacted last year), but New York and Rhode Island apparently interpret the law very differently (New York interpreting the law extremely narrowly, focusing only on specific "soliciation activivities" by publishers; Rhode Island looking solely at the way compensation is computed for advertising placements).
    Isn't this a fatal action for the states in the long run. Seems like this is reason for the supreme court to nullify cross border sales tax.
    You must climb this mountain. There is no elevator. ---- Don't stick your finger in the liquid nitrogen.
    Carolina China

  3. #3
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    January 18th, 2005
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    Using "New York Solution" in North Carolina?
    I just received a "Change to Program Agreement" notice from US Auto Parts (automatically sent to all of its ShareASale affiliates), which appears to adopt the "New York solution" in response to the Advertising-Nexus tax law in North Carolina.

    > "13.8. Publishers based in the states of North Carolina and New York must only use affiliate links provided by Auto Parts Warehouse. Publishers from the aforementioned states may not send emails and email newsletters as well as flyers, brochures, printed newsletters nor make telephone calls that solicit business on Auto Parts Warehouse's behalf to any residents in the state of New York (for Publishers residing in the state of New York) and the state of North Carolina (for Publishers residing in the state of North Carolina). Violation of this clause will result in termination from the Auto Parts Warehouse Affiliate Program and the withholding of all commissions earned in the period." <
    Unfortunately, I don't think US Auto Parts should be listed yet under the thread listing merchants who will definitely continue to accept publishers in North Carolina, because the "New York solution" might not work there.

    Rhode Island, which was the second state to adopt the "Advertising-Nexus" tax law, has interpreted the law very differently than New York (as discussed briefly above and in more detail in the Rhode Island Affiliates sub-forum).

    When I wrote the earlier posts in this discussion thread, I mistakenly believed that North Carolina had already enacted the "Advertising-Nexus" tax language. However, the state has apparently not yet enacted the budget bill which still seems to include that language.

    Obviously, North Carolina's Department of Revenue cannot offer its interpretation of a law which has not yet been enacted (even though it claims to be retroactive to July 1). This language may still be modified or (hopefully) removed from the final bill.

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