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Update on Hawaii HB1405

Hawaii is moving forward with HB 1405. The hearing on Hawaii’s version of the affiliate tax, HB1405, was held yesterday. After hearing the testimony the Committee recommended passage of the bill.  The Senate Committee vote was 3 for passage, 1 against and 1 excused.

There is a time table for action on any bill; the process will probably take another couple of weeks. I believe that the next steps are the 2nd and 3rd reading followed by the House vote, then on to the Governor. I will continue to update you on the progress of this bill.

All affiliates should continue to prepare, no matter what state they live in. Do not count on the bills not passing. A false sense of security could destroy your income. Remember that the tax is due, all that  changes with these bills is the method of collection. 

Now I am off to get ready for SES NY.

{ 3 comments… add one }

  • Teesed March 24, 2009, 10:30 am

    Hawaii affiliates (and residents of the other states where these actions are taking place), you MUST contact your state representatives about this.

    Explain that what will happen here will have the unintended consequences of actually reducing state revenues, and REDUCING THE INCOMES OF THEIR OWN RESIDENTS! As with New York, most merchants will simply drop their affiliates rather than collect these taxes, which means you will have less income. Not a very good idea in any economy, much less this one.

    Get this information to your local press as well. Sounds like a juicy story to me – “Proposed Sales Tax Grab Could Reduce State Incomes”

    Don’t sit idly by.

  • Ben March 25, 2009, 11:44 am

    after reading HB 1405…couldnt affiliates driving revenue from CPA offers geotarget around hawaii and thus escape taxation from this bill? you’d have to be able to prove that none of the customers were from hawaii if taken to tax court. maybe in theory you could avoid taxation but as with public policy you’ll never really know until you or someone else goes to court. i will discuss this with a hawaii tax attorney and see what he says.

  • Ben March 25, 2009, 12:06 pm

    if you’re an Affiliate marketer and your revenue comes from an adnetwork(CX digital, Neverblue, etc) located in another state you probably aren’t subject to the tax anyway. its the merchant selling physical goods to hawaii customers that would have to pay in the current form of legislation. you can claim an exemption from the GET because you’re exporting services outside the state of hawaii. i could be wrong. not a tax lawyer. but its something to investigate. i believe if you can file a form G-61 export exemption certificate for general excise and liquor taxes to get around this.

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