The good news is we have a little more time to get ready. The bad news is Maryland affiliates will need to go through another round of possible Internet sales tax or advertising tax. State Senator Madaleno of Maryland has announced that in January 2010 he will introduce legislation that will require out of state merchants to collect Maryland sales tax for online purchases to Maryland residents. It is anticipated that his proposed bill will be similar to the one introduced in the last legislative session. That proposed bill required out of state merchants with Maryland affiliates to collect sales tax on sales to Maryland residents if the threshold was reached. That threshold was $10,000 in total sales in the previous four quarters from Maryland affiliates to Maryland residents. As you know, that bill was introduced too late in the last regular session to be completely passed.
Senator Madaleno feels that his proposal establishes a more level playing field. In fact, he calls it an E-fairness bill. He estimates that his legislation will generate $7.5 million a year in additional revenue.
The original proposal was similar to the legislation that exists in New York, North Carolina and Rhode Island. As we have seen from the three states that currently have this legislation, interpretation can vary. Only time will tell how Maryland will interpret the law if it does pass.
While you may feel it is too early to think about interpretation, it is not too early to prepare. Maryland affiliates need to be proactive and prepare their business. We have seen that merchants will remove affiliates prior to a state passing the legislation. Several merchants have publicly stated they will take those steps. If you are an affiliate living in Maryland I urge you to get involved now. Get in touch with me so I can help you organize and prepare your business. Education, organization and preparation are critical.
To join a group to work on this issue contact me at Affiliate Voice LLC. I have also posted about the developments in Maryland Internet sales tax at Get Ready Again Maryland