The NY Tax Session at Affiliate Summit was an amazing and productive experience that benefited many. I decided to split my thoughts on the session into two posts – Summary and Impact. During the NY Tax Issues and Solution at Affiliate Summit East 2008, the panel had the the opportunity to discuss not only the solution and knowledge of the law but also the impact it has had.

During our introductions, Clarke D Walton, Internet attorney;  Chris Henger, of Google Affiliate Network; Kim Rodgers, Affiliate Manager of 4Checks and I each had an opportunity to present how the law affected us. The discussion was moderated by Adam Riemer.

I had the opportunity to present the impact the law has had on affiliates. I began by explaining that NYAffiliateVoice.com is my personal blog and is independent of any group. I felt that was important because it had to be clear that any opinions I expressed were my own. I gave an overview of what it was like mid-May thru the current day. I spoke of receiving terminations, of work that had to be done and redone over again when a new round of terminations hit. I tried to liken it to a store owner having a store with nothing on the shelves yet still trying to earn a living.

I provided a brief summary of the Albany meeting that Kevin Webster and I co chaired. I tried to convey that the key to the success in Albany was that affiliates, merchants and program managers met for a business meeting and worked together as business partners; and we did this with mutual respect. I mentioned that we had retained a NYS Tax attorney  for services and as a result we had not only an understanding of the law we had the solution.

Kim Rodgers, Affiliate Manager of 4Checks then spoke on the impact of the law on her company and what she did to work through it.  She described what it was like for her that last week in May when the decision was made to terminate NY Affiliates. She announced that her company was now allowing NY affiliates back into her program and confirmed that the process was indeed simple.

Clarke D Walton, Internet attorney, presented definition of nexus and other keywords as well as an explanation of the current law  with and overview of what led up to it. It was reassuring to many to have a lawyer on the panel with knowledge and understanding of the law. Chris Henger, of Google Affiliate Network, presented the network perspective and the steps they have taken to facilitate merchants gathering the information they require. Google Affiliate Network has taken an initiative and makes it very simple for merchants to obtain the information they need to both help make educated decisions and to implement the solution. In my opinion, opening up a direct communication channel between affiliate and merchant is a critical part of improving the industry.

In the next part of the session Kim and I presented the solution. We then all discussed the solution and passed out copies of the paperwork. We took questions from the audience. The solution was well received and I think many were shocked as to how simple it is. If you missed the session and are not familiar with the steps to comply with the law, I’ve posted  an overview of the NY Tax Solution here.

I think we brought clarity and understanding to not only the tax issue and solution, but on another issue that is critical aspect of our industry. I’ll talk more about that in my next post.

We had good feedback from the audience both during and after the session. I exchanged several business cards but if we missed each other please feel free to contact me via this website or even facebook.

It was an honor to sit on the panel with Adam, Clark, Chris and Kim. I received several compliments that we were a great team,  and I am proud to have been able to participate.

Many thanks to Shawn Collins and Missy Ward for adding the New York Tax session to the Affiliate Summit. Based on the feedback I received, many New York Affiliates will benefit from the session as reinstatement to several programs is about to happen. More about the impact of the tax session in my next post.

As a direct result of our meeting in Albany and having retained legal counsel, we have the necessary documents that will permit merchants to resume partnership with NY affiliates. The main stumbling blocks over the last two months was a lack of understanding of the requirements to comply with the tax law and the lacking of the necessary written agreements.

We have been advised by our New York State Tax attorney that there is a simple two step process that merchants and affiliates need to take to be in compliance.

There are two documents to download that include steps merchants need to take and more importantly, sample agreements. The links to these documents are at end of this post.

This post is only an overview, please download both 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 terms to affiliate agreement.Out of state merchants need to add a contractual condition to their affiliate program terms that prohibits New York affiliates from solicitation activities.

We now have the paragraphs that need to be added to terms.

Step two is Proof of compliance.This is accomplished by requiring affiliates to submit on a yearly basis,  a signed certification that they, the affiliate, have in the previous year complied with the terms of the agreement. This agreement is due on or before May 31 of every year and must be retained by the merchant.

We now have a sample agreement.

Here is the link to our version of letter outlining steps to take and all the sample agreements. Letter to merchants outlining Merchant’s Two Steps to Comply with NY  Internet Tax Law.

We are also providing the lawyers’ version of letter to merchants. This detailed versions offers some background information and additional details that some CFO’s, CEO’s and others might prefer. Detailed Information on How to Comply with Tax Law.

Download both documents. Read through both documents and understand them.

This is the solution and we have done the necessary work to make it easy to implement.

Several people have been involved with this and it is our hope that you find it helpful. We worked together, one goal and no politics. We had no motivation aside from finding a way to keep our businesses.

I and thousands of other New York Affiliates look forward to resuming our partnerships with merchants.

As a result of the July 28 affiliate meeting in Albany, we are also directing some of our attention to the New York State Senate and the New York State Assembly. You will recall that the Senate voted to repeal the affiliate tax on June 19. That bill was sponsored by the Rules Committee. The bill was sent to the State Assembly who quickly referred it to the Ways and Means Committee. The bill will sit there until they decide to do something. We believe that the Senate bill to repeal the affiliate tax was sparked, at least in part by the devastating effect the law has had on non profit groups such as the Boys Scouts.

While our solution of the signed agreement will solve the problem for most affiliates, nonprofit groups are faced with additional requirements. This law severely hampers their ability to raise funds to support their causes. I post more about that in a future post.

I have been in correspondence with Karen McMahon as to how to best approach the political avenue. Her valuable and informed advice will definitely facilitate this aspect of our work.  We are going to focus our energy and time where it will be most effective.

We, as a group, will begin to identify those from the Rules committee that supported the bill and ask for their assistance and input. They may be able to point us in the right direction in order to get a sponsor on the Ways and Means Committee, as well as help identify those who will help us get the bill to pass.

Karen has also indicated that it is critical that we contact our Assembly members. This is where every affiliate needs to let their voice be heard.

Every affiliate needs to take action. Call your Assembly member’s office and email them and let your affiliate voice be heard. Request a meeting and tell them in person about the impact of the law. Many of the elected officials will be in their home offices so it will  be easier to call them and easier to get a meeting. Let them know how this has affected you. Tell them about the number of merchants who terminated NY affiliates. Let them know about your loss of income. Let them know that there are thousands of New York affiliates losing their businesses.

Do all of this in a professional manner. Treat them with respect. Identify yourself as a constituent and ask them for their assistance. If you know of other affiliates living near you work together. Have your friends and families contact their Assembly member.

If your Assembly member sits on the Ways and Means Committee your voice can have even more impact.

If there has ever been a time for affiliates to make their voices heard this is it.  We proved in Albany that we can work together to accomplish amazing things. That meeting was possible due to the support from many  and we need to move forward. Look at what we have accomplished so far.  Imagine what we can accomplish in the future.

We never need to totally agree, but we do need to work together.  I have said it a few times today but it deserves repeating – Together we are a great team.

A big thank you to Karen McMahon for her fabulous insights and advice.