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  1. #1
    Advocate mellie's Avatar
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    Oklahoma Affiliate Tax
    Earlier this evening I updated on Affiliate Advocacy about the developments in Oklahoma. Oklahoma Governor Brad Henry released his budget earlier this week and according to the budget, Internet sales tax ( as well as phone and mail order) is part of the budget deficit solution.

    This is still very early in the process, right now it is just in the Governor's budget. Legislators are still drafting bills to enact his budget so I will be keeping a close eye on it.

    What ever state you live in you should prepare.

    Executive Budget http://www.ok.gov/OSF/documents/bud11.pdf
    Melanie
    President - Affiliate Advocacy 2008 ShareaSale Performance Industry Advocate Award, 2009 Affiliate Summit Pinnacle Award - Affiliate Advocate
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  2. #2
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    "Collection of Sales Tax on Remote Sales
    Currently, out-of-state businesses without a presence in Oklahoma are not collecting sales tax on Internet, telephone or mail order sales made to Oklahoma, effectively providing them with an advantage over Oklahoma-based operations that do collect the sales tax. This compliance initiative allows the Oklahoma Tax Commission to pursue sales tax collections from the out-of-state companies in question. The Governorís budget includes an increase of $95 million to the General Revenue Fund in FY-2011 collection of taxes currently due the state on these sales by out-of-state entities."

    The above may be fine. If all merchants are to collect taxes on items shipped to Oklahoma (regardless they are mail order or have affiliates in the state or not), it may not be damaging to the affiliates!.

    No merchant need to terminate an affiliate due to the above UNLESS they decide not to do business with any Oklahoma resident. Even if a merchant decides to terminate all shipments to Oklahoma, they do not need to terminate any affiliate from that state!.

    I think ALL states should start charging taxes on MAIL ORDER or INTERNET (remote) orders. So, this whole issue of merchants terminating affiliates due to NEXUS, goes away completely!

  3. #3
    ABW Ambassador mailman's Avatar
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    Would this apply to mail order and internet sales from Canada? If so how do they expect to collect these taxes?

  4. #4
    Affiliate Manager Alan Hamilton's Avatar
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    Mailman, no U.S. state has the authority to impose or enforce a sales tax collection obligation on out of country businesses, so rest easy. Heck, maybe Oklahoma and NY affiliate marketers will move to Canada!
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  5. #5
    ABW Ambassador mailman's Avatar
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    I guess the point of origin comes into play. If the parcel is shipped by an merchant from Oklahoma to NY then the Merchant must collect the tax. However in Canada some of our PROVINCES(States) have two taxes already.
    A GST of 7%,plus I believe 5% PST tax. Any further tax will kill online sales.
    Merchants will have to bite these taxes if they wish to be competitive.
    WE NEED A BAILOUT!

  6. #6
    Affiliate Manager Alan Hamilton's Avatar
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    Canada is NOT affected Mail, so it is a moot point. An internet sales tax law in OK, USA has no jurisdiction or authority in Canada or any other country. It would be unenforceable. The Internet tax laws being passed by some states are addressing USA states only, so no worries in Canada, unless one of your legislative bureaucrats get a hair up the butt and try to do the same thing there, but I highly doubt that as you already have a national sales tax on top of your provincial rate.
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  7. #7
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    Quote Originally Posted by mailman
    Would this apply to mail order and internet sales from Canada? If so how do they expect to collect these taxes?
    If your business does not have a physical presence in the US anywhere, there is not much to worry about the OK, USA remote tax.

    This remote tax also should not affect AFFILIATES in a negative way at all. It will be bad for merchants who wants to ship remotely to OK, USA residents. So, the merchants must decide whether to ship to OK or not!. This is also bad for EBAY SELLERS. All US based eBay sellers may need to put a notice that they do not ship to OK, USA residents unless they plan to collect OK taxes and deal with that.

  8. #8
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Based on current law, no state has the right to impose a sales tax on sales made by out-of-state businesses without even the pretext of a nexus to the state (the pretext in NY and the other states that have imposed the "Amazon" tax is that of in-state affiliates creating the nexus).

    This Oklahoma proposal is clearly unconstitutional on its face.

    Edited to add: Of course, Ok can enforce a use tax on purchases made by Ok residents from out-of-state merchants, but the state can only collect that tax from the residents (an impossible task), they cannot impose the tax collection burden on out-of-state businesses with no presence in Oklahoma.
    Last edited by Phil Kaufman aka AffiliateHound; February 6th, 2010 at 03:30 PM. Reason: More added
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  9. #9
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    Quote Originally Posted by AffiliateHound

    This Oklahoma proposal is clearly unconstitutional on its face.
    I thought so too. But gave the benefit of doubt that a Governor's budget would not include such unconstitutional stuff. Maybe they will fabricate some kind of nexus for all remote sales (including mail orders).

  10. #10
    ABW Ambassador delsol's Avatar
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    Quote Originally Posted by AffiliateHound
    This Oklahoma proposal is clearly unconstitutional on its face.
    Does not mean it will not be voted on nor pass.
    This is still very early in the process
    This is how it all started in Colorado (also with a democrat Governor and one of his staffer coming up with this idea).

    Get a copy of the budget proposal and start pointing it out to your representatives now.

    The situation looks a lot better for Oklahoma.
    Your house is very red 62 red versus 39 blue, this is VERY GOOD for you.

    Your senate is red 26 versus 22, this is good.

    I recommend you start educating your representatives now (rep + senator), but you should be safe with the house and senate of Oklahoma...

    If this actually becomes a bill you should pull together and start a count of the votes (to see if it is party lines). You can actually ask rep. or senator how they will vote and keep track.

  11. #11
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    FWIW they've been making noise about the remote tax stuff for years, hopefully the current power split ("red" legislature, and "blue" governor) will continue to work to our favor.

  12. #12
    Affiliate Manager Bradley.Senkovich's Avatar
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    It seems that Oklahoma Passed the bill. Albiet a different version. One that requires more out of retailers < - > customers relationships.

    http://www.performancemarketingassoc...d-as-modified/

    I guess its time to inform management about it... They are already frustrated about CO...

    Please support PMA and Affiliate Voice in thier endeavors.

  13. #13
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    The situation looks a lot better for Oklahoma.
    Your house is very red 62 red versus 39 blue, this is VERY GOOD for you.

    Your senate is red 26 versus 22, this is good.
    It seems that Oklahoma Passed the bill. Albiet a different version. One that requires more out of retailers < - > customers relationships.
    Appears that color doesn't matter as long as the citizens can bleed.
    Last edited by Witzer; July 14th, 2010 at 11:41 AM.
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  14. #14
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    I don't see anything in the bill that tries to redefine what constitues a "nexus". Rather, it seems aimed at trying to get merchants who do have a nexus to get those taxes collected, and to get other merchants to inform visitors from Oklahoma that they're still on the hook for use taxes. It also has some language aimed at "online auction sites".

    Am I missing something, or does this have any implication for affiliates, given that the focus of the bill seems to be elsewhere?

    Text of bill: http://performancemarketingassociati...ge-HB2359-.pdf
    Last edited by TI Master; October 11th, 2010 at 04:54 PM.

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