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  1. #1
    Member ishank's Avatar
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    What is Nexus Tax ?
    Can somebody please explain to me, what is Nexus Tax ? Is it good or bad for online business? Where can I find more about this topic ?

  2. #2
    notary sojac Herb ԿԬ's Avatar
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    Here in the U.S. many states feel they are entitled to collect sales tax on purchases made from within those states by local people. But the merchants might not also be or have a presence in those states.

    Big mess. The U.S. Supreme Court may address it eventually.

  3. #3
    Affiliate Network Rep JCrooks - AffiliateWindow's Avatar
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    In order for a state to collect tax from a merchant, the merchant must have a presence or "nexus" in that state. Since many online merchants didn't have any physical presence in most states, some idiot lawmaker decided to use affiliates living in that state to establish nexus and force tax collection.

    The end result in virtually every state where this legislation has passed is that many merchants stop working with their affiliates in that state to eliminate the requirement to collect sales tax. The affiliates lose their "jobs", the merchant just sells to the consumers via websites created by affiliates living outside that state, and the state doesn't collect anything like they thought they would. (In Colorado, the state collected $20,000, not the $5 million they planned on).

    We will know next month whether this issue will be heard by the US Supreme Court to see if this tax is even consitutional. The Performance Marketing Association has been very active in opposing this tax on the state level.
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  5. #4
    OPM and Moderator Chuck Hamrick's Avatar
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    We have an extensive Tax forum and state sub forums, take some time to educate yourself there.

  6. #5
    Member ishank's Avatar
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    JCrooks,

    Yes, this law sounds stupid to me. It's taking the liberty of affiliates and merchants. I hope that Performance Marketing Association would win the case in court.

  7. #6
    Affiliate Network Rep JCrooks - AffiliateWindow's Avatar
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    It does use affiliates as pawns in a larger game. But you know politicians and tax revenue - that's universal.

    The PMA won in Illinois, lost in Colorado. We'll have to see what happens next.
    Jeannine Crooks - Always happy to share what I know! - Voted Best Network Rep 2013 & 2014
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