While attending Share A Sale Think Tank, a few merchants and affiliates asked me to clarify the steps involved in reinstating NY Affiliates to their programs. These step by step procedure was created by our NY Tax attorney after our meeting on July 28. For the sake of simplicity, I am dividing the steps into separate posts.
These posts are only meant to be a guide. Please download all of the documents for additional details and explanations. Use all information to assist you. It is not meant to replace the advice of your own lawyer or accountant but to ease the process of implementing the solution.
Step one is to add some terms to your affiliate agreement. Every merchant with an affiliate program already has terms and conditions that affiliates agree to when they join. These terms need to be modified by adding a couple of simple sentences. These sentences say that NY affiliates will not do certain things. Copy the sample terms, insert your merchant name where indicated and add to your current terms. Have NY affiliates accept terms, either electronic signature or if preferred have affiliate print out the terms, sign and either fax or mail to you. Here are the sample terms:
Sample of Terms and Conditions to be Added to Affiliate TOS by Merchant
Prohibition against solicitation activities by New York State resident affiliates.
As a condition of its participation in the (Fill in Merchant Company Name) Affiliate Program, Affiliate agrees that its solicitation activities on behalf of (Fill in Merchant Company Name) within the State of New York shall be limited to providing a link on Affiliate’s website to the (Fill in Merchant Company Name’s) own website. Affiliate acknowledges that under current New York State law, further solicitation and promotional activities by Affiliate within New York State may subject the (Fill in Merchant Company Name) to liability for collecting New York State sales tax on all sales to New York customers. Therefore, as a condition of participation in the (Fill in Merchant Company Name) Affiliate Program, Affiliate is prohibited from engaging in any solicitation activities in New York State intended to refer potential customers to the (Fill in Merchant Company Name), including, but not limited to: distributing flyers, coupons newsletters and other printed materials, or electronic equivalents of such materials; engaging in verbal solicitation, including in-person referrals or initiating telephone calls; and sending emails intended to refer customers to the (Fill in Merchant Company Name).
What those sentences mean is that NY affiliates will not solicit business directly for a merchant. Some merchants and affiliates have asked what can NY affiliates do. Very simply put, NY Affiliates can advertise their own sites. Don’t mention the advertiser in any emails, newsletters or paid ads. There can be no direct to merchant ppc from NY affiliates. NY Affiliates can advertise their own sites. Once a visitor is on the affiliate’s site they can then link to the merchant as any other affiliate would. According to the Tax Department’s memorandums of May 8 and June 30, merely providing website link on an affiliate site to the merchant’s own website does not constitute solicitation.
Documents You Need to Print and Read – Print all four
Here is the link to the complete sample documents (simplified version) Sample Terms/Affiliate Agreement for NY Affiliates
Here is the link to the longer explanation drafted by our lawyer ( version for your lawyer, accountant, CEO…) Longer detailed version of Steps to Work with NY Affiliates
Here is the link to original official NYS tax memo – NY Tax Memo of May 8 2008
Here is the link to the official NYS tax memo of June 30 2008 that clarified what is and isn’t allowed NY Tax Memo June 30 2008
You can read more about our July 28 meeting here. July 28 Meeting of NY Affiliates
Next post will have Step 2.