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April 5th, 2011, 10:52 AM #1Is this provision in any other State's bill?
I downloaded the most recent version of the SB738 so I could find the effective date, etc. and I saw this:
The effective date is 90 days from the date of the bill BUT in regards to determining the relationship of a resident of the state with links on a web site (or the other triggers) - the 12 months preceding the date of the bill will be used to determine.
I understand what they are saying - that my participation in the program(s) for the previous 12 months are as much a trigger as 4 months from now. What's that mean in terms of strategy? Is this in any other state's bill? Is this something new they are trying to get around the whole "We'll terminate and then see how much you get?" response from the merchants?
What does this do to our talking points?
April 5th, 2011, 10:53 AM #2
April 5th, 2011, 11:06 AM #3
Looks like they are trying to ditch the "we'll just fire our affiliates on the day the law passes and skip out on the obligation" approach.
That means they are learning - if only we could get them to learn that they are ruining people's livelihoods with a law that will generate no revenue and is unconstitutional - we'd really have something.
April 5th, 2011, 11:59 AM #4
- Join Date
- January 18th, 2005
- The Swamp
My take is the same as Wade's, trying to make the merchant still liable even if they terminate the affiliate. That absolutely SUCKS.
OTOH, I'm not sure what kind of legal ground they will be attempting to put a 12 month retroactive clause in establishing nexus in there. It just seems crazy.
I don't recall offhand any other previous legislation having something like that in there (but I could be wrong).
April 5th, 2011, 12:50 PM #5
The other thing that is riling me right now and the "they're learning" phrase is what brought it to mind. Yesterday I listened to the Texas discussion and as they introduced the bill for discussion and described it, they acknowledged the concerns of "affiliates" by saying that if we get all 50 states to get on board, those affiliates won't have anyplace to hide. They can go from state to state, but it won't do any good. I'm not quoting exactly; I actually couldn't believe what I was hearing. I want so badly to believe that they meant to say "merchant", but it didn't feel like it.
Scott and Brook were there, along with several others and they might be able to speak to this point. I'm curious as to how they perceived it.
April 5th, 2011, 03:22 PM #6
how freaking frustrating... affiliates are pawns in this - completely.
All affiliates are trying to do here is earn some money so that they can consume things and pay taxes - that is what makes the economy go right ?
Clearly the government can't allow that.
April 6th, 2011, 08:20 AM #7
they acknowledged the concerns of "affiliates" by saying that if we get all 50 states to get on board, those affiliates won't have anyplace to hide. They can go from state to state, but it won't do any good. I'm not quoting exactly; I actually couldn't believe what I was hearing. I want so badly to believe that they meant to say "merchant", but it didn't feel like it.
- Join Date
- January 18th, 2005
- The Swamp
That's rather deplorable if affiliates is what they meant. Businesses locate on tax issues all the time. States recruit businesses by offering tax incentives all the time.
More importantly, their claims are weak. First off, not all states even have sales/use tax, so it couldn't happen in all 50 states on a state by state basis.
Secondly, nationally is EXACTLY what they should be doing. This is a national issue, not a state level issue. Instead of using affiliates to attempt to establish an unconstitutional nexus, they should be working on the issue at the national level. It's already out there. By all means, please do get all 50 states on board at the national level, that's what should happen.
April 6th, 2011, 08:42 AM #8
Unfortunately, there's quite a bit of constitutional wiggle room around the issue of ex post facto (retroactive) laws, which doesn't automatically apply to civil law. Seems this may be a new test for yet another application of it.Renée
Pay no attention to that woman behind the curtain. -Wizardress of Oz
April 6th, 2011, 11:01 AM #9Confused Terminology
(3) "Facilitator" means a person that directly aids or assists 2 sellers in making remote sales, including without limitation a person that 3 operates a website marketplace through which the seller makes sales."
From my understanding this would be an affiliate, in the bill referred to as a Facilitator.
Now they have gone on to define what they refer to as an Affiliated person
(1) "Affiliated person" means: 30
(A) A person that is a member of the same controlled group 31 of corporations as the seller; or 32
(B) Another entity that, notwithstanding its form of 33 organization, bears the same ownership relationship to the seller as a 34 corporation that is a member of the same controlled group of corporations;
Note the use of Controlled group of corporations
See this link for the official definition of this term: United States Code: Title 26,1563. Definitions and special rules | LII / Legal Information Institute
From my understanding this means that in order to be a part of a controlled group of corporations you would need to have the ability to own stocks or currently own stocks within the corporation, which as an affiliate and how the payment methods work, this is not the case.
They have also attempted to deeper define an affiliated person, which I would call in their language and Affiliate.
(3) Affiliated person maintains an office, distribution 15 facility, warehouse or storage place, or similar place of business to 16 facilitate the delivery of property or services sold by the seller to the 17 seller's business;
Their definition here shows that a affiliated person is one who aids the Seller in moving or holding tangible (physical) stock within the state.
After dissecting all this I am even more confused that before, but I do understand that this is a weak attempt and due to the lack of proper terms of usage is far to obscure to focus on a specific industry.
By wsisson in forum Affiliate Tax LawsReplies: 5Last Post: July 3rd, 2014, 02:01 PM
By Chuck Hamrick in forum Illinois Affiliate TaxReplies: 11Last Post: April 30th, 2011, 10:39 PM