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  1. #1
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    Exclamation New Jersey Advertising Nexus Legislation
    New Jersey Legislators have introduced 4 different Advertising Nexus bills in the past few weeks.

    The exact phrase in A2003/S1305, A2608, S905, and S1719 is:

    “A person who solicits business either by employees, independent contractors, agents or other representatives or by distribution of catalogs or other advertising matter and by reason thereof makes sales to persons within the State of tangible personal property, specified digital products or services, the use of which is taxed by this act.”

    This broad phrase is the same as the original New York State Advertising Nexus legislation.

    On Thursday, March 8, 2012 at 1pm the New Jersey Senate Budget and Appropriations Committee will hold hearings on S1305. The Assembly may also hear A2003 on March 12 (Committees are at the call of the Speaker). The Senate and Assembly may then vote on these bills on March 15. This legislation goes into effect immediately upon passage and will result in the usual mass terminations for New Jersey affiliates.

    The Assembly Democrats are specifically going after affiliates per this press release regarding A2608.

    Assembly Democratic Bill to Level Playing Field Between Online & Existing Retailers & Create New Jobs for New Jerseyans

    "The bill would also update state law regarding sales tax collection by Internet retailers that have affiliates located within the state. This would further level the playing field between online retailers and existing retailers."

    Recent Coverage:

    State Street: Ultimatum From Amazon Causing Stir In Trenton

    Amazon, NJ lawmakers scramble to strike tax deal

    If you're a New Jersey affiliate, please consider testifying on Thursday. Contact Senate Budget and Appropriations Chair Paul A. Sarlo's office at (201) 804-8118.

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  3. #2
    ABW Ambassador JoyUnltd's Avatar
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    I can't be there on Thursday but will contact his office. Any other NJ affs want to discuss this? Please PM me. Maybe we can set up a Skype conference.

    P.S. - I have a PT day job, so am not always available.
    Renée
    Pay no attention to that woman behind the curtain. -Wizardress of Oz

  4. #3
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    Send me an email --> contactus (@) ecoupons.com

  5. #4
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    I just called the New Jersey Legislative Services Number at 609 847 3835

    You do not need to register ahead of time to testify. Just fill out a Witness Slip when entering and bring 20 copies of material you would like to include with your testimony.

  6. #5
    Member RebeccaMadiganPMA's Avatar
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    Hi All,

    The bill in NJ is actually NOT an affiliate nexus tax. It is a bill designed to remove Amazon's sales tax exemption because they have warehouses in the state. The PMA SUPPORTS this bill because it doesn't impact affiliates at all.

    It's confusing because they're using a different legal definition of the word 'affiliate', which in this case means part of a controlled groups of companies or subsidiaries.

    We have lobbyists we work with in the state who have been keeping an eye on this. Word has it Amazon is close to doing a deal, likely with some implementation date in 2013 or 2014, so we all have time to get the federal solution passed as the better alternative. Most likely, part of the deal is to keep an affiliate nexus tax bill off the table. There's a slight risk it could come back but if they get Amazon, they'll be happy.

    Incidentally, the retail associations are happy with this as well, they don't want to hurt us.

    So please DO NOT OPPOSE - this is good for us, it gets the state to force Amazon to collect, and doesn't harm affiliates.
    Rebecca Madigan
    Executive Director | Performance Marketing Association
    o: 805.445.9700 (PST)

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  8. #6
    OPM and Moderator Chuck Hamrick's Avatar
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    Hi Rebecca,
    We have lobbyists we work with in the state who have been keeping an eye on this. Word has it Amazon is close to doing a deal, likely with some implementation date in 2013 or 2014, so we all have time to get the federal solution passed as the better alternative. Most likely, part of the deal is to keep an affiliate nexus tax bill off the table. There's a slight risk it could come back but if they get Amazon, they'll be happy.
    Any update on the federal solution?

  9. #7
    Member RebeccaMadiganPMA's Avatar
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    There are 2 federal bills we support: H.R. 3179 “The Marketplace Equity Act” (Womack/Speier) and S. 1832, “the Marketplace Fairness Act” (Enzi/Alexander and Durbin). We are in massive fundraising mode so we can launch our DC campaign. It takes hiring our own lobbyists and building new coalitions. We're making progress, and we think we have a good chance. As a matter of fact, even our 'frienemies', Walmart, Target and BestBuy (who oppose us at the state level but we're on the same side in supporting the federal bills) feel that affiliate marketers are key to getting these passed in 2012. We won't have long, it's an election year, but we're going to give it our all.

    Stay tuned!
    Rebecca Madigan
    Executive Director | Performance Marketing Association
    o: 805.445.9700 (PST)

  10. #8
    OPM/Moderator Hectic GHC's Avatar
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    Quote Originally Posted by RebeccaMadiganPMA View Post
    Hi All,

    The bill in NJ is actually NOT an affiliate nexus tax. It is a bill designed to remove Amazon's sales tax exemption because they have warehouses in the state. The PMA SUPPORTS this bill because it doesn't impact affiliates at all.

    It's confusing because they're using a different legal definition of the word 'affiliate', which in this case means part of a controlled groups of companies or subsidiaries.

    We have lobbyists we work with in the state who have been keeping an eye on this. Word has it Amazon is close to doing a deal, likely with some implementation date in 2013 or 2014, so we all have time to get the federal solution passed as the better alternative. Most likely, part of the deal is to keep an affiliate nexus tax bill off the table. There's a slight risk it could come back but if they get Amazon, they'll be happy.

    Incidentally, the retail associations are happy with this as well, they don't want to hurt us.

    So please DO NOT OPPOSE - this is good for us, it gets the state to force Amazon to collect, and doesn't harm affiliates.
    For once, Georgia is jealous of New Jersey.
    Greg Hoffman
    Affiliate Marketing Advocate of the Year 2016; Best OPM/Agency - 2014; Best OPM/Agency, Five Years in a Row - ABestWeb.
    Visit Greg Hoffman Consulting

  11. #9
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    S1305
    My apologies.

    S1305 introduces the following new sections to the existing statutes.

    I encourage New Jersey affiliates to interpret for themselves and/or with attorney/accountants if it affects them.

    S1305

    ==============================================

    (3) A person shall be deemed to be a seller if:

    (A) Both of the following conditions are met:

    (i) the person holds a substantial ownership interest in, or is owned in whole or in substantial part by, a person maintaining a place of business within this State, and

    (ii) the person sells the same or a similar line of products as a related person in this State and does so under the same or a similar business name, or the person uses the in-State facilities or the in-State employees of a related person in this State to advertise, promote or facilitate sales to customers;

    (B) The person holds a substantial ownership interest in, or is owned in whole or substantial part by, a business that maintains an office, distribution facility, sales or sample facility, warehouse or storage place or other similar place of business in this State that delivers tangible personal property or specified digital products sold by the person to customers;

    (C) The person derives receipts from the lease or rental of tangible personal property situated in this State; or

    (D) The person is engaged in the business of selling tangible personal property, specified digital products or services, the use of which is taxed by P.L.1966, c.30 (C.54:32B-1 et seq.), and either:

    (i) an affiliated person uses in this State a trademark, service mark or trade name that is the same as a trademark, service mark or trade name used by the person who is engaged in the business of selling tangible personal property, specified digital products or services, the use of which is taxed by P.L.1966, c.30 (C.54:32B-1 et seq.); or

    (ii) an affiliated person engages in activities in this State that inure to the benefit of the person who is engaged in the business of selling tangible personal property, specified digital products or services, the use of which is taxed by P.L.1966, c.30 (C.54:32B-1 et seq.), in that person’s development or maintenance of a market for its goods or services in this State, to the extent that those activities of the affiliated person are sufficient to allow this State to assert its jurisdiction to impose tax collection duties on that person who is engaged in the business of selling tangible personal property, specified digital products or services, the use of which is taxed by P.L.1966, c.30 (C.54:32B-1 et seq.), under the provisions of the Constitution and statutes of the United States. The provisions of this sub-subparagraph shall not be construed to narrow the scope of any other provision contained in this subsection. Notwithstanding the provisions of this sub-subparagraph, the activities in this State of an affiliated person in providing accounting services or legal services or in providing advice to a person who is engaged in the business of selling tangible personal property, specified digital products or services, the use of which is taxed by P.L.1966, c.30 (C.54:32B-1 et seq.), or in directing the activities of a seller, including, but not limited to, making decisions regarding strategic planning, marketing, inventory, staffing, distribution or cash management shall not result in the person being deemed to be a seller under this subsection.

    (4) A person who is part of a controlled group of corporations, and that controlled group of corporations has a component member that is a seller engaged in business in this State as described in paragraph (3) of this subsection, shall be presumed to be a seller engaged in business in this State. This presumption may be rebutted by evidence that during the period for which a return is required to be filed, or for such lesser interval as shall have been designated by the director, the component member that is a seller engaged in business in this State did not engage in any of the activities described in this subsection on behalf of the person who is part of a controlled group of corporations.

    (5) A person who makes sales of tangible personal property, directly or through a subsidiary or other related entity, to purchasers in this State by mail, telephone, the Internet or any other media, and who has a contractual relationship with an entity to provide and perform delivery, installation, assembly, or maintenance services for that person’s purchasers within the State shall be deemed to be a seller.

    (6) In addition, when in the opinion of the director it is necessary for the efficient administration of this subsection to regard a salesperson, representative, independent contractor, solicitor, trucker, peddler or canvasser operating in this State as an agent of the dealer, distributor, supervisor, employer or person under whom the agent operates or from whom the agent obtains the tangible personal property sold by the agent, regardless of whether the agent is making sales on the agent’s behalf or on behalf of such dealer, distributor, supervisor, employer, or person, the director may so regard the agent and may regard the dealer, distributor, supervisor, employer, or person as a seller for purposes of this subsection.

    (fff) “Maintaining a place of business within this State” includes having, maintaining, occupying, or using, permanently or temporarily, in this State, directly or by a subsidiary or other related entity, an office, distribution facility, sales or sample facility, warehouse or storage place or other similar place of business. A person is “maintaining a place of business within this State” if the person has agents operating in this State under that person’s authority or under the authority of a subsidiary of that person, regardless of whether the place of business or the agent is in this State permanently or temporarily, or regardless of whether the person or the subsidiary is authorized to do business in this State.




    (ggg) “Substantial ownership interest” means an interest in an entity that is not less than 10 percent of the equity ownership interest of that entity.

    (hhh) “Ownership” means both direct ownership and indirect ownership through a parent, subsidiary, or affiliate.

    (iii) “Controlled group of corporations” means “controlled group of corporations” as defined by subsection (a) of section 1563 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.1563. (jjj) “Component member” means “component member” as defined by subsection (b) of section 1563 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.1563.

    (kkk) “Affiliated person” means a person who has the relationship of a “related person” as defined by section 2 of P.L.1993, c.170 (C.54:10A-5.5) to a person who is engaged in the business of selling tangible personal property, specified digital products or services, the use of which is taxed by P.L.1966, c.30 (C.54:32B-1 et seq.).

    (cf: P.L.2011, c.49, s.1)



    STATEMENT



    This bill revises the sales and use tax to specify certain persons who are deemed to be sellers and to clarify the tax collection responsibilities of certain other persons and agents who make taxable sales of goods and services to purchasers in this State.

    The bill provides that the following persons will be deemed to be sellers for purposes of the sales and use tax:

    -- Persons who hold a substantial ownership interest in, or are owned in whole or in substantial part by, a person maintaining a place of business within this State and who sell the same or a similar line of products as the related person in this State under the same or a similar business name;

    -- Persons who hold a substantial ownership interest in, or are owned in whole or in substantial part by, a person maintaining a place of business within this State, and who use the in-State facilities or the in-State employees of a related person in this State to advertise, promote, or facilitate sales to customers;

    --Persons who hold a substantial ownership interest in, or are owned in whole or substantial part by, a business that maintains an office, distribution facility, sales or sample facility, warehouse or storage place or other similar place of business in this State that delivers tangible personal property or specified digital products sold by the person to customers;

    -- Persons who derive receipts from the lease or rental of tangible personal property situated within this State;

    -- Persons who are engaged in the business of selling tangible personal property, specified digital products, or services, the use of which is subject to tax in this State, and who use a trademark, service mark, or trade name that is the same as the trademark, service mark, or trade name used by an affiliated person in this State; and

    -- Persons who are engaged in the business of selling tangible personal property, specified digital products, or services, the use of which is subject to tax in this State, and who derive a benefit from the activities of an affiliated person in this State, in the person’s development or maintenance of a market for its goods or services in this State, to the extent that the activities of the affiliated person are sufficient to satisfy the tax jurisdiction requirements of the United States Constitution.

    The bill provides that a person who is part of a controlled group of corporations, and that controlled group of corporations has a component member that is a seller engaged in business in this State, will be presumed to be a seller engaged in business in this State. The bill specifies that this presumption may be rebutted by certain evidence.

    The bill provides that a person who is engaged in the business of selling tangible personal property, directly or through a subsidiary or other related entity, to purchasers in this State by mail, telephone, the Internet or any other media, and who has a contractual relationship with an entity to provide and perform delivery, installation, assembly, or maintenance services for that person’s purchasers within the State will be deemed to be a seller.

    The bill provides that the Director of the Division of Taxation in the Department of the Treasury may, when necessary, regard a salesperson, representative, independent contractor, solicitor, trucker, peddler or canvasser operating in this State as an agent of the dealer, distributor, supervisor, employer or person under whom the agent operates or from whom the agent obtains the tangible personal property sold by the agent, regardless of whether the agent is making sales on the agent’s behalf or on behalf of such dealer, distributor, supervisor, employer, or person, and that the director may so regard the agent and may regard the dealer, distributor, supervisor, employer, or person as a seller for purposes of the sales and use tax.

  12. #10
    OPM and Moderator Chuck Hamrick's Avatar
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    New Jersey Hates Affiliates
    Got a kick out of this article and thought worth sharing:

    New Jersey had decided to become part of a long line of States that will try to pass a law that will tax affiliates. It seems that State Senators Paul A. Sarlo (R) and Raymond J. Lesniak (D) have been watching Jersey Shore to get some of their economic ideas. The have introduced Senate Bill 1305 that will institute a new tax on those who are making a living as affiliates in the Garden State.

    The idea behind these affiliate taxes is to impose a tax on online stores in a State, if the retailer has any affiliates in that State. The idea is that an affiliate suddenly becomes a representative of the company and establishes a physical presence in that State. The claim by those making the laws is that it helps the small “brick and motor” companies in those states. However, as I’ve written before, Walmart is behind the Affiliate Taxes

    The fact is that for the few states that have passed these laws, the same things happens: companies “fire” all their affiliates in those States, and retailers start to refuse to work with an internet marketing companies on a cost-per-performance out of fear they will have to pay more taxes. Despite overwhelming support from Constitutional scholars that any internet-tax is unconstitutional, politicians who want big donations from Political Action Committees supported by Wal-Mart, introduce these laws even though most are doomed to fail.

    Affiliate Taxes do one thing: Drive businesses out of a state, and cause online retailers to stop doing business in that State. There is absolutely no proof whatsoever that in any State that has passed these laws, that any significant taxes have been collected. That’s because all the retailers just cancel any affiliate contracts in those states effective immediately, and the State has nothing to collect.

    On the other hand, if NJ would heavily taxes tanning lotion and hair extensions, the State would probably make millions.

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