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May 13th, 2010, 11:39 PM #1
Don't Know What To Do. Best Way To Start?
- Join Date
- May 10th, 2010
- San Jose, CA
I am new here and frankly, don't know what to make of all these tax affiliate laws. I see all this talk about these new tax laws for affiliates, merchants dropping their affiliates and so on. I am just about to jump into the world of affiliate marketing but don't know what to make of it.
Is it worth it? Is the current administration putting even more laws on small business owners to grow government" and stunt small business growth? IS this a local government issue? What do all these new affiliate tax laws mean? Are merchants like Amazon dropping their affiliates if they live in certain states?
My business is incorporated in Delaware and I live in Massachusetts. What do I need to know? What rules and regulations do I refer to so I know what the laws are?
Why are they taxing affiliates (amazon) if we would already pay taxes (business taxes) on what we earn anyway? Seems like double taxation to me.
Best to all.
May 14th, 2010, 12:31 AM #2
Your information regarding the current state of tax laws as they effect affiliate marketing is totally incorrect.
First, understand that as it stands now, it is purely a state-by-state issue. It is totally incorrect to say "Is the current administration putting even more laws on small business owners to grow government and stunt small business growth?" when no Federal laws are involved in the issue and when, in fact, Federal taxes on individuals and businesses are at their lowest level since the Truman administration, and when in fact 2009 income taxes were lower for 95% of US taxpayers (individual and business) than for 2008.
Next, understand that these new tax laws DO NOT tax affiliates. What they do, except for recent exceptions, is create an artificial nexus between out-of-state merchants and in-state customers by assuming or creating a fiction that affiliates are de facto sales agents or employees of the out-of-state merchants. By doing this, the states are saying that merchants who sell to customers in their state must collect state sales taxes on such sales. In no way are affiliates themselves taxed or are affiliates required to collect taxes. More recent state tax laws, such as laws in Colorado, have gone further, attempting to ignore the requirement of a nexus as required by the US Supreme Court case of Quill Corp. v. North Dakota, 504 U.S. 298 (1992), and impose a blanket requirement that, in effect, all online merchants must collect Colorado state sales taxes on all online sales to Colorado residents (or inform each customer that they have a duty to pay such taxes directly to the state and give the state a list of all such customers).
There has been a lot of talk about a Federal Internet Sales Tax which could possibly impose a uniform nationwide tax, but that is a very complicated issue, and there has been nothing concrete done, except for talk and speculation.
There is yet to be an appellate review of any of these state laws, but the first lawsuit filed in New York (the Amazon case) has been briefed and argued, and a decision is expected any time.
There is a wealth of information here in the Affiliate Tax Law Forum. Spend some time reading up on all of this.
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