Potentially scary implications
 

Standard disclaimer: I'm not a lawyer.

I wonder if this new NY State law could end up applying to sponsor affiliates. Would affiliates be responsible for collecting and reporting sales tax on sales we send to a sponsor? Because this law seems to raise that possibility. |confused|

http://www.theregister.co.uk/2008/04...es_amazon_tax/

this has been an issue for a few years, so far i think states have not been successful.

|crazy|

According to previous attempts by other states, the state of New York would have to prove that these affiliates are doing business strictly with New York customers. The state of New York could charge sales tax on New York customers of the affiliates but New York would be unable to prove that without access to Amazon's records. If the affiliates are working just on the internet, then their status is global. If the affiliates advertised in New York media such as newspapers, then it is possible that the affiliates could be described as a New York business of Amazon. A lot of this crap was discussed in California and Washington a couple of years ago. Spitzer and New York did not come up with this idea on their own. This smells like Federal Attorneys involvement. They did symposiums out west when I lived in California. The Feds were masturbating to the fantasy of attaching tax awareness cookies to computers to track all internet sales. Drug companies in the United States were excited about that possibility.

I could be wrong but I thought within the past year, Congress extended an old law that made the internet tax free.

But the states are pushing HARD to get the right to collect internet taxes.

Considering that our economy is likely to get worse, and the states are starving for money to repair neglected infrastructure and pay the bills for regular operations, we have to expect pressure on this issue.

I know there are/were some rumblings that Canuck WMs should be collecting/reporting sales tax on internet purchases made by Canucks. That could lead into be a real wacky enviroment for affiliates.

The potential new law does NOT make affiliates responsible for collecting or
reporting taxes. They are saying that the sponsor should collect and
report taxes on sales to New York customers because the affiliates in New York
constitute a "physical presence". The Supreme Court doesn't like to be
messed with and this is clearly NOT what they meant when they said "physical
presence", so if passed the law will be overturned.