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  1. #1
    ABW Ambassador Georgie Peri's Avatar
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    Exclamation Virginia Affiliates: PMA Affiliate Tax Alert!
    Greetings all,

    Maybe it will be time to open up a Virginia Sub folder!

    I found the following in my linkshare sidebar news section

    "Virginia Affiliates: PMA Affiliate Tax Alert!
    The PMA has received word that an advertising tax will be proposed in Virginia. If this tax passes, they predict over 100 advertisers will terminate their affiliate programs with Virginia publishers..."
    OpA! Giasou Ti kanies!

  2. #2
    Mama in Charge Anne's Avatar
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    Nice.....

  3. #3
    Mama in Charge Anne's Avatar
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    SENATE BILL NO. 660
    Offered January 21, 2010
    A BILL to amend and reenact ? 58.1-612 of the Code of Virginia, relating to sufficient activity within the Commonwealth to require a dealer to register for retail sales and use tax purposes.
    ----------
    Patron-- Hanger
    ----------
    Referred to Committee on Finance
    ----------
    Be it enacted by the General Assembly of Virginia:

    1. That ? 58.1-612 of the Code of Virginia is amended and reenacted as follows:

    ? 58.1-612. Tax collectible from dealers; "dealer" defined; jurisdiction.

    A. The tax levied by ?? 58.1-603 and 58.1-604 shall be collectible from all persons who are dealers, as hereinafter defined, and who have sufficient contact with the Commonwealth to qualify under subsections B and C hereof.

    B. The term "dealer," as used in this chapter, shall include every person who:

    1. Manufactures or produces tangible personal property for sale at retail, for use, consumption, or distribution, or for storage to be used or consumed in this Commonwealth;

    2. Imports or causes to be imported into this Commonwealth tangible personal property from any state or foreign country, for sale at retail, for use, consumption, or distribution, or for storage to be used or consumed in this Commonwealth;

    3. Sells at retail, or who offers for sale at retail, or who has in his possession for sale at retail, or for use, consumption, or distribution, or for storage to be used or consumed in this Commonwealth, tangible personal property;

    4. Has sold at retail, used, consumed, distributed, or stored for use or consumption in this Commonwealth, tangible personal property and who cannot prove that the tax levied by this chapter has been paid on the sale at retail, the use, consumption, distribution, or storage of such tangible personal property;

    5. Leases or rents tangible personal property for a consideration, permitting the use or possession of such property without transferring title thereto;

    6. Is the lessee or rentee of tangible personal property and who pays to the owner of such property a consideration for the use or possession of such property without acquiring title thereto;

    7. As a representative, agent, or solicitor, of an out-of-state principal, solicits, receives and accepts orders from persons in this Commonwealth for future delivery and whose principal refuses to register as a dealer under ? 58.1-613; or

    8. Becomes liable to and owes this Commonwealth any amount of tax imposed by this chapter, whether he holds, or is required to hold, a certificate of registration under ? 58.1-613.

    C. A dealer shall be deemed to have sufficient activity within the Commonwealth to require registration under ? 58.1-613 if he:

    1. Maintains or has within this Commonwealth, directly or through an agent or subsidiary, an office, warehouse, or place of business of any nature;

    2. Solicits or transacts business in this Commonwealth by employees, independent contractors, agents, or other representatives.

    A dealer is presumed to be soliciting or transacting business by an independent contractor, agent, or other representative if the dealer enters into an agreement with a resident of the Commonwealth under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link on an Internet site or otherwise, to the dealer if the cumulative gross receipts from sales by the dealer to purchasers in the Commonwealth who are referred to the dealer by all residents with this type of agreement with the dealer are in excess of $10,000 during the preceding four quarterly periods. This presumption may be rebutted by proof that the resident with whom the dealer has an agreement did not engage in any solicitation in the Commonwealth on behalf of the dealer that would satisfy the nexus requirement of the United States Constitution during the four quarterly periods in question;

    3. Advertises in newspapers or other periodicals printed and published within this Commonwealth, on billboards or posters located in this Commonwealth, or through materials distributed in this Commonwealth by means other than the United States mail;

    4. Makes regular deliveries of tangible personal property within this Commonwealth by means other than common carrier. A person shall be deemed to be making regular deliveries hereunder if vehicles other than those operated by a common carrier enter this Commonwealth more than twelve times during a calendar year to deliver goods sold by him;

    5. Solicits business in this Commonwealth on a continuous, regular, seasonal, or systematic basis by means of advertising that is broadcast or relayed from a transmitter within this Commonwealth or distributed from a location within this Commonwealth;

    6. Solicits business in this Commonwealth by mail, if the solicitations are continuous, regular, seasonal, or systematic and if the dealer benefits from any banking, financing, debt collection, or marketing activities occurring in this Commonwealth or benefits from the location in this Commonwealth of authorized installation, servicing, or repair facilities;

    7. Is owned or controlled by the same interests which own or control a business located within this Commonwealth;

    8. Has a franchisee or licensee operating under the same trade name in this Commonwealth if the franchisee or licensee is required to obtain a certificate of registration under ? 58.1-613; or

    9. Owns tangible personal property that is rented or leased to a consumer in this Commonwealth, or offers tangible personal property, on approval, to consumers in this Commonwealth.

    D. Notwithstanding any other provision of this section, the following shall not be considered to determine whether a person who has contracted with a commercial printer for printing in the Commonwealth is a "dealer" and whether such person has sufficient contact with the Commonwealth to be required to register under ? 58.1-613:

    1. The ownership or leasing by that person of tangible or intangible property located at the Virginia premises of the commercial printer which is used solely in connection with the printing contract with the person;

    2. The sale by that person of property of any kind printed at and shipped or distributed from the Virginia premises of the commercial printer;

    3. Activities in connection with the printing contract with the person performed by or on behalf of that person at the Virginia premises of the commercial printer; and

    4. Activities in connection with the printing contract with the person performed by the commercial printer within Virginia for or on behalf of that person.

    E. In addition to the jurisdictional standards contained in subsection C of this section, nothing contained herein (other than subsection D) shall limit any authority which this Commonwealth may enjoy under the provisions of federal law or an opinion of the United States Supreme Court to require the collection of sales and use taxes by any dealer who regularly or systematically solicits sales within this Commonwealth. Furthermore, nothing contained in subsection C shall require any broadcaster, printer, outdoor advertising firm, advertising distributor, or publisher which broadcasts, publishes, or displays or distributes paid commercial advertising in this Commonwealth which is intended to be disseminated primarily to consumers located in this Commonwealth to report or impose any liability to pay any tax imposed under this chapter solely because such broadcaster, printer, outdoor advertising firm, advertising distributor, or publisher accepted such advertising contracts from out-of-state advertisers or sellers.

  4. #4
    Mama in Charge Anne's Avatar
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    The above is the existing law with ONE addition which has been proposed. The new proposal is here:

    2. Solicits or transacts business in this Commonwealth by employees, independent contractors, agents, or other representatives.

    A dealer is presumed to be soliciting or transacting business by an independent contractor, agent, or other representative if the dealer enters into an agreement with a resident of the Commonwealth under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link on an Internet site or otherwise, to the dealer if the cumulative gross receipts from sales by the dealer to purchasers in the Commonwealth who are referred to the dealer by all residents with this type of agreement with the dealer are in excess of $10,000 during the preceding four quarterly periods. This presumption may be rebutted by proof that the resident with whom the dealer has an agreement did not engage in any solicitation in the Commonwealth on behalf of the dealer that would satisfy the nexus requirement of the United States Constitution during the four quarterly periods in question;

  5. #5
    http and a telephoto
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    Following the NYS model
    Deborah Carney
    TeamLoxly.com BookGoodies.com ABCsPlus.com

  6. #6
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    If I understood right, this law relates only to tangible product affiliates, so if you're promoting some digital downloads, this law doesn't affect you, even if you're in Virginia. Confirm me if I'm right.

  7. #7
    http and a telephoto
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    Quote Originally Posted by Teemu
    If I understood right, this law relates only to tangible product affiliates, so if you're promoting some digital downloads, this law doesn't affect you, even if you're in Virginia. Confirm me if I'm right.
    If the product is subject to sales tax in that state it is governed by this law. You would have to check the Virginia sale tax laws to find out.
    Deborah Carney
    TeamLoxly.com BookGoodies.com ABCsPlus.com

  8. #8
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    Quote Originally Posted by loxly
    If the product is subject to sales tax in that state it is governed by this law. You would have to check the Virginia sale tax laws to find out.
    Thanks, I will check. One question, what is an effective date of this bill? When it is going to come in force?

  9. #9
    Online Marketing Consultant
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    Quote Originally Posted by Teemu
    Thanks, I will check. One question, what is an effective date of this bill? When it is going to come in force?
    Teemu. There is still a chance to fight this bill I think. I am trying to organize a meeting and action plan, but not many people are being responsive. We are planning another Mid Atlantic Affiliate Meetup and this will be a topic for that since MD and DC may also be at risk again.

    email me at adamr (at) adamriemer (dot) me if you would like to get involved.

    Please also check out Melanie and AffiliateAdvocacy.com to find out more info. You may also want to check out the PMA.
    Adam Riemer Marketing, LLC. Online Marketing Blog and Affiliate Management Company
    Do you need help with your Marketing or Sales funneling, write me at adamr (at) adamriemer (dot) me

  10. #10
    Online Marketing Consultant
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    So the only people that actually offered to help or do anything are Melanie and one other person. The funny thing is that none of us actually live in VA. You would think that with CO and other States recently having issues, VA Affiliates and Merchants would be more proactive.

    If you live in VA and want to try to fight this, you need to start organizing now!
    Adam Riemer Marketing, LLC. Online Marketing Blog and Affiliate Management Company
    Do you need help with your Marketing or Sales funneling, write me at adamr (at) adamriemer (dot) me

  11. #11
    Mama in Charge Anne's Avatar
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    Many of us are writing letters but not following this thread very closely, sorry.. the vote on the bill is apparently tomorrow, I just found out like.. today. lol. ugh!

  12. #12
    Advocate mellie's Avatar
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    Let me know if I can do anything to help.
    Melanie
    President - Affiliate Advocacy 2008 ShareaSale Performance Industry Advocate Award, 2009 Affiliate Summit Pinnacle Award - Affiliate Advocate
    Affiliate Advocacy
    NYAffiliateVoice Seery Writing

  13. #13
    Full Member iolaire's Avatar
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    I completely missed this thread - sorry, just sent my comments in today. I'm in VA, I don't have a lot of time during the week due to a day job, but if I can help I'm at iolaire ... usa...net

  14. #14
    Affiliate Marketing Consultant Linda - 5starAffiliatePrograms's Avatar
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    For any of you trying to organize efforts, I think Adam Veiner from IMwave is trying to get people together too. Just retweeted this earlier today.

    @adamviener Any Affiliate Marketers in the Southern Part of Virginia out there? If so please email me ASAP!

    Hope that helps and good luck!

  15. #15
    Mama in Charge Anne's Avatar
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    I think there is no time, the vote is tomorrow morning at 9 am... ( Wednesday Feb 10, 9 am) I have written all senators.. if we were not in the middle of horrid snow I would drive to Richmond to speak. From what I understood the bill was to be voted on next month but they moved it tomorrow like a ship in the night, no warning. I wrote a nice letter, hopefully someone will read it.. I sent to each senator.

    Here is a list of Senators..
    http://sov.state.va.us/SenatorDB.nsf/$$Viewtemplate%2Bfor%2BWEmailList?OpenForm

    if you live in va and can send letters now, hopefully at least a few will see before tomorrow morning at 9 am when they vote...

  16. #16
    Mama in Charge Anne's Avatar
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    PS this thread should be on top until tomorrow morning at 8:30 am or so... the vote takes place at 9... I can't believe they moved this up, we had less than two weeks to organize anything.

  17. #17
    Full Member iolaire's Avatar
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    Quote Originally Posted by Anne
    Here is a list of Senators..
    http://sov.state.va.us/SenatorDB.nsf/$$Viewtemplate%2Bfor%2BWemailList?OpenForm
    Thanks that was a good list, I re-sent the email to everyone BCC'd with an explanation of why I felt it was important for them to see my comments even though I'm in district 30.

  18. #18
    ABW Ambassador ladidah's Avatar
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    Is the gov't going to be closed tomorrow due to the snowstorm?

    edit: too bad, I think it's still on.
    http://sfc.virginia.gov/
    Last edited by ladidah; February 9th, 2010 at 10:31 PM.

  19. #19
    Mama in Charge Anne's Avatar
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    It has been passed:
    Virginia Senate panel OKs move to tax online shopping
    Posted to: General Assembly News Retail and Consumer Virginia Login or register to post comments

    By Julian Walker
    The Virginian-Pilot
    © February 10, 2010
    RICHMOND

    A Virginia Senate panel clicked 'send' on legislation that would require Internet retailers to collect sales tax on in-state transactions by affiliated online merchants.

    The so-called "Amazon bill" from Sen. Emmett Hanger Jr., R-Augusta, would clarify language in the state tax code to make it clear that certain online businesses cannot avoid paying Virginia's sales and use tax.

    Several merchants told the Senate Finance Committee today that large Internet retailers like Amazon.com have a competitive advantage because they don't charge Virginia's 5 percent sales tax to online shoppers. Closing that legal loophole, which costs Virginia millions annually in tax revenue, would "level the playing field for the many bricks-and-mortar businesses" that form the backbone of the state's economy, Sarah Pishko of Norfolk's Prince Books told the committee.

    Another merchant, Danny Givens of Givens Books & Little Dickens in Lynchburg, said some savvy consumers use Internet product and price listings to try to haggle with him over the cost of his wares, effectively "turning my business into a flea market."

    A fiscal analysis attached to Hanger's bill projects the change could net Virginia an estimated $17 million in revenues.

    But lobbyist Myles Louria claimed Virginia wouldn't realize those benefits because large online outfits such as Amazon.com and Overstock.com would end their relationships with state-based affiliate vendors rather than pay the sales tax. That's what happened in North Carolina and Rhode Island when those states adopted similar laws, he said.

    Hanger's bill advanced out of committee on a 14-1 vote.

    Sen. Chuck Colgan, D-Prince William, has submitted a budget amendment that seeks to accomplish a similar goal.


    Nice.

  20. #20
    Mama in Charge Anne's Avatar
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    bumping to ride somewhat even with other thread...

  21. #21
    Full Member iolaire's Avatar
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    Is there a reason why we don't link to the story? I personally emailed the reporter, however it seems to me that it would make sense to drive a lot of traffic to the story? And comments relating to why it is a bad idea?

  22. #22

  23. #23
    ABW Ambassador delsol's Avatar
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    Quote Originally Posted by Teemu
    If I understood right, this law relates only to tangible product affiliates, so if you're promoting some digital downloads, this law doesn't affect you, even if you're in Virginia. Confirm me if I'm right.
    It might not. But you should join the fight because what really matter is "how the merchants react". Sometimes it's just too risky for a merchant to take accept the potential legal/litigation risks....it is sometimes easier to simply drop affiliates and avoid the potential headache...
    good luck!

  24. #24
    Newbie claycath's Avatar
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    I just heard about this bill when I got a letter from Overstock telling me that they might have to end our affiliate relationship. This so totally sucks! When are these stupid politicians going to realize that it only hurts the state by cutting affiliates' income, they no longer get the income tax. They never see the "increased revenue" they expect.

  25. #25
    Online Marketing Consultant
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    Clay,

    There is still time to organize and take action. Email me your information and I'll send you invites to a couple resources. You can find my email in my signature.

    Best,

    Adam
    Adam Riemer Marketing, LLC. Online Marketing Blog and Affiliate Management Company
    Do you need help with your Marketing or Sales funneling, write me at adamr (at) adamriemer (dot) me

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