I received a couple of queries as to the likelihood of a repeal of the tax. Although I hinted at it in my posts Repeal has Little Appeal and Our Efforts Working for Repeal I will share my thoughts here.
Prior to our meeting in Albany, I was very pessimistic that the law could be repealed. My first reason for thinking this is I believed that the Senate merely passed the bill for public image reasons. The other reason was and is the current financial conditions here in New York. New York is facing very tough financial times, right now an estimated 26 billion dollar deficit. The state needs the money.
My personal opinion is that the likelihood of a repeal, by way of the current bill, is slim. Even though it has passed the Senate it must pass the Assembly. The Assembly will only vote if the Ways and Means Committee pushes the bill forward, it can sit in committee for a while. Once the Assembly votes, if passed, it will then go to the Governor. I believe that we will have a huge battle there. My opinion is that he would veto the bill.
Having said that, I still believe that we need to work this avenue and push for repeal. The reason is to keep attention on the issue and get it out into the public eye. We must do this in order to support the Amazon/Overstock lawsuit and to influence future legislation.
As I briefly mentioned in my post on pushing for repeal, we have to make sure everyone is aware of profound effect this law has had on individuals and non profit groups. Lets take the non profit groups first. Right now Boy Scouts, religious groups, veteran groups and all other non profit groups need to rely more on fundraisers. These groups are seeing federal and state funding slashed and are struggling to make up the deficits. These groups are now suffering as a direct result of the Internet tax. Even with the solution of the affiliate agreement, these groups will still have other hurdles to jump. Just as I believed that the Senate passed the bill for their image, the Assembly can be swayed to do the same. No one wants to be known as hurting non profit groups.
The second reason I believe we need to pursue this avenue is that we must share with the politicians the impact this is having on thousands of small business owners ie the thousands of affiliates who are seeing their businesses destroyed by the loss of income. We need to remind them that lower income means less income tax revenue for the state; lower income also means less disposable income. If our elected politicians know how widespread the impact is then we have leverage.
The last reason I think we need to persue this is that we can lay the groundwork for improved legislation. The current law and the current bill both clearly indicate that we need to educate the politicians so that they may draft legislation that meets both the needs of the affiliate marketing industry, the needs of the residents and the needs of our government.
Other states are keeping a close eye on all of this. The Amazon/Overstock lawsuit will take years to resolve. It is estimated that it will be at least five years before anything is final in that case.
To summarize, while I personally believe that repeal of the affiliate tax will not happen with the current bill, I do believe we must continue our efforts to push for repeal. The end result will be that there is improved legislation that will benefit everyone – the affiliates, the merchants and the people of not just New York State but every state.