The impact of the NY advertising tax or the NY Internet sales tax has been devastating for many NY affiliates. I’ve chronicled several of  our stories in the series “Story of NY Affiliates”.  I interviewed and wrote until it became too overwhelming for me. Affiliates lost their entire business, suffered severe financial and emotional stress.

As other states are working on similar legislation we often hear the official numbers of sales tax collected. Last year from June 1 2008 through early December NY claims to have collected around $46 million in additional sales tax revenue from newly registered out of state merchants. This year it is estimated that the figure will surpass $62 million. While other states who are contemplating similar legislation hear these figures, they do not hear the other side – the income tax revenue lost.

Affiliate Summit is conducting an important survey to determine the impact the advertising tax has had on income.  I urge every NY affiliate who was in business last year to take the survey. Impact of NY Advertising Tax / Impact of NY Internet Sales Tax

The results of the survey will be used to help educate legislators on the impact of the new nexus laws. As we continue to work on this critical issue it is important to have a more concrete analysis of the impact. 

Since last year, Affiliate Summit has shown NY affiliates their support. This was clearly demonstrated in many ways. This support included adding the NY Tax Issues and Solutions session at Affiliate Summit East last year even though the deadline had passed and  made sure that NY affiliates were well represented.  Over the past year, many of their podcasts discussed the Internet sales tax issue, they invited me to be a guest to help inform others, they blogged about it and helped disseminate information as we uncovered it. Throughout the year they have shown us support; it is now time to give back. NY affiliates need to complete the survey. Results will help us as we continue to fight for repeal and reinstatement to hundreds of programs. Every NY Affiliate Voice matters!

Please, New York Affiliates,  help Affiliate Summit help us.

Complete the survey –  Affiliate Summit – Impact of  NY Advertising Tax Survey

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.

This is really breaking news.  I have received an encouraging email from our lawyer’s office in regards to action on  the federal level.  Last week Mr.  Jim Bunning, a Senator from Kentucky introduced a bill that would eliminate affiliates from the definition of physical presence within a state. If it were to pass, this would mean that states would be prohibited from taxing out of state merchants if the only revenue sharing connection are affiliates.

While still in the very early stages, there is an encouraging sign. Having a sponsor is important, and there is a sponsor for the bill, Mr Bunning. The bill was read twice, as required, and was referred to the Committee on Commerce, Science and Transportation. The bill number is S. 3670

Now is the time that all affiliates should contact their Senators. This is not just a New York issue. It needs to be addressed by all states. If this law does not pass the gates will be open to all states to enact similar laws.

Here are the members of the Committee on Commerce, Science and Transportation. All affiliates need to follow up with them to get it to pass Committee and go to the floor for vote. Also contact your Senator to express your views so that they also support the bill.  (Contact Committee Members http://commerce.senate.gov/public/index.cfm?FuseAction=About.Members , Find Your Senator http://www.senate.gov/general/contact_information/senators_cfm.cfm

Chairman Daniel K. Inouye (HI)
John D. Rockefeller, IV (WV)
John F. Kerry (MA)
Byron L. Dorgan (ND)
Barbara Boxer (CA)
Bill Nelson (FL)
Maria Cantwell (WA)
Frank R. Lautenberg (NJ)
Mark Pryor (AR)
Thomas Carper (DE)
Claire McCaskill (MO)
Amy Klobuchar (MN)
 Ranking Member Kay Bailey Hutchison (TX)
Ted Stevens (AK)
John McCain (AZ)
Olympia J. Snowe (ME)
Gordon H. Smith (OR)
John Ensign (NV)
John E. Sununu (NH)
Jim DeMint (SC)
David Vitter (LA)
John Thune (SD)
Roger Wicker (MS) 

I am getting ready for my trip to San Diego for Share A Sale Think Tank but I am still following up with this. It is critical for all affiliates to take action.

Your Affiliate Voice needs to be heard.