It appears that the Amazon and Overstock lawsuits against the NYS Internet Tax have been dismissed. This means the Internet tax still stands and those companies with a physical presence will need to collect the sales tax. The reason that the case was ruled in the favor of NYS is that the law clearly states that merely having affiliates does not create a physical presence. The law is the basis for the two step solution so this ruling has no effect on the current situation. Everything can continue as it has been over the last few months.
The ruling should also convince merchants who removed NY Affiliates that they can safely do business with us. Affiliates do not equal physical presence.
The implications of the ruling will probably have greater implications for other states. Other states have been watching the battle in NY very closely. With the dire fiscal situations in many states I think it is only a matter of time before they take action. As Federal budget cuts hit this year many states will begin to enforce the tax laws that already exist. If merchants are not willing to take the extra steps needed in order to continue working with all affiliates then we will have several thousands of other affiliates from many states removed from programs.
Merchants who removed NY Affiliates in a “wait and see” approach must now decide do they continue on the path of avoidance and non-action or do they make educated decisions. Will you now reinstate NY Affiliates?
Networks need to realize that they must take swifter action to help educate their merchants. Help your merchants, help your affiliates and in the process help your own network.
Affiliates need to realize that the decisions made regarding NY affiliates will likely be the same for them. Educate yourself on your state’s stance. Educate yourself on the actions of your merchants and your networks.
Education is the key. No one can ever be criticized for making informed and educated decisions.