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  1. #1
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    Virginia Affiliate Tax Going Into Effect 9/1/13?
    I just received this message from The Tire Rack:
    "As you might already be aware, the state of Virginia passed sales/use tax legislation effective 09/01/13 that requires a retailer to collect Virginia sales tax if the retailer has affiliates operating within the state. Quite a few other states have already passed similar legislation which lead us to terminate our partnership with affiliates in those states. However, our legal team has reviewed the Virginia law and feels we may be able to continue our partnership with..."

    I didn't know Virginia had an affiliate tax?!

    This is the only thing I could find out about it:
    Virginia Enacts Affiliate Nexus Law | Sales Tax Institute

    Anyone know anything about this?

  2. #2
    ABW Ambassador isellstuff's Avatar
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    I've been following this because I'm seriously thinking of moving to Virginia. The Virginia legislation targets distribution centers, not affiliate marketers and is similar to a law passed in Texas. (Texas Enacts Affiliate Nexus Bill | Sales Tax Institute)

    The term affiliate is a "loaded" word that means different things to different people and the press gets it confused all the time. The Virgina and Texas laws target "physical residences" under direct control of a parent corporation that facilitate sales or distribution.

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  4. #3
    ABW Ambassador isellstuff's Avatar
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    By the way, someone at Commission Junction is maintaining a very good, chronological history of affiliate nexus legislative action in a PDF document. It's the best source I have found monitoring relevant (e.g. threatening) nexus activity.

    It is here:
    http://www.cj.com/sites/default/file...chrono-tax.pdf

    or hotlinked on the RHS here:
    Affiliate Nexus Tax | Commission Junction US

    I'm not sure what happened with PMA, but they don't appear to be maintaining their public list of "at risk" states any longer.

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  6. #4
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    Thanks for the info. I just moved here a couple months ago and I made sure there was no type of affiliate tax legislation when I was considering the move, which is why the e-mail from Tire Rack was so surprising. After replying to them with info about their mistake over the meaning of "affiliate" in this instance, their response was:
    "Our legal team has interpreted the law to include us as well. We will need to document signed in order to continue our partnership."

    It seems that they are just trying to play it safe, but I hope other merchants don't misinterpret the point of the law in VA as well.

    On a side note, if you are considering moving here, I would definitely recommend it, it's a great place to live, particularly in the northern Virginia area.

  7. #5
    ABW Ambassador isellstuff's Avatar
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    Thanks, we are looking at the are between Ashburn and Reston, primarily because of the schools. I was surprised to find they tax situation in Virginia is actually better than Texas for certain situations.

    Please post an update if more merchants send you notification of an unfavorable nexus interpretation.

  8. #6
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    We're in Fairfax city. I heard that some parts of Reston are better than others, I guess there are some bad parts there. There is a lot of stuff to do there though, like the Reston Town Center. I've also heard Loudon County and Ashburn, Sterling, etc. have great schools. The taxes in VA don't seem too bad right now, the sales tax is only like 6% which is nice. I was in TN before and there was no income tax, but the sales tax was 9%. Plus, the business taxes here seem lower, so it might come out about even I'm hoping?

    Anyway, I'll keep an update if we receive any more notices. But, the section they are referencing is Va. Code Ann. 58.1-612 if you are curious to read it.

  9. #7
    Member RebeccaMadiganPMA's Avatar
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    Sorry for the late reply, I'm just now with Internet access. Virginia did NOT pass what we call an 'affiliate nexus tax law', they passed something to do with 'affiliated corporations' or companies with some sort of shared ownership. There is very specific language having to do with marketing affiliates, and the Virginia law does not include that. BTW, this misinterpretation of the legal definition of 'affiliate' is how we got into this whole nexus tax mess to begin with.

    The PMA provides detailed legislative updates to its members, one of the more highly valued member benefits. We provide members with details on at-risk states, real-time updates on bills, at state and federal levels, our tactical plans and strategic insights on where we see things going. We also provide private consultations to member companies and their legal counsel. The PMA is considered one of the foremost experts and leaders in the area of internet sales tax.

    As such, we are followed very closely by our opponents, because our success rate at beating back these state nexus tax laws is over 80%. For those reasons, the information we provide publicly is on the light side.
    Rebecca Madigan
    Executive Director | Performance Marketing Association
    o: 805.445.9700 (PST)

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  11. #8
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    Thanks Rebecca. It does seem to be an isolated misunderstanding. I certainly appreciate everything your organization does for affiliates!

  12. #9
    OPM and Moderator Chuck Hamrick's Avatar
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    Rebecca, any chance you can reach out to The Tire Rack and get them to resend their decision? Are they a member of the PMA?

  13. #10
    Affiliate Manager keystrokes's Avatar
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    Thanks for the clarification Rebecca! And isellstuff - Northern VA is a great place to live. The schools are great and there is plenty to do. The only drawback can be traffic.
    Char Polanosky
    Affiliate Manager, All Inclusive Marketing
    char (at) allinclusivemarketing.com

  14. #11
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    More stores are scared by the potential implications of this Virginia change. One Stop Plus, Roaman's, King Size, Woman Within and all their related brands aren't accepting publishers from Virginia.

  15. #12
    ABW Ambassador isellstuff's Avatar
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    Thanks for the update jamuhn. Not clear on why they would be freaking out? Lack of knowledge on the situation I guess?

  16. #13
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    According to a rep at CJ, they think that some merchants are overly conservative and they don't believe it to be a widespread issue. I think the problem is the legislation mentions "affiliates", but not in the way we use the term. It refers to affiliated corporations. So, either a lack of knowledge or an abundance of caution.

  17. #14
    Affiliate Network Rep JCrooks - AffiliateWindow's Avatar
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    I follow this for Affiliate Window, and we always try to explain each state's legislation to the merchants so that they won't overreact to new developments. The laws in each state can vary so much, because in some cases the legislators were really only interested in targeting the big guys, like Amazon, and tried to work out direct deals instead. Colorado's law is very different than the ones in other states, and subsequent legal challenges and results sadly have sometimes reflected the political posture of each state as well.
    Jeannine Crooks - Always happy to share what I know! - Voted Best Network Rep 2013 & 2014
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