Affiliate tax

Why does this matter?

In most cases these bills require merchants to collect and remit sales tax from residents of those states because of working with affiliates in that state. As a result, some merchants may choose to end their relationships with resident affiliates to avoid this expense. For specific information on how this tax will impact your business, please contact your tax accountant.
  • The YELLOW states below to review the state’s respective law/statute.
  • GREEN states indicate a bill, or bills that were ruled invalid through the court process.
  • RED states indicate a bill that is introduced and being considered by state legislature.

nexusmapfeb

*Map courtesy of the Performance Marketing Association

Recent news and updates:

Many legislatures had adjourned by December, so little happened within this area. Of note, Vermont collected nearly $1M by sending letters to residents claiming sales tax was owed from online purchases. However this critical update arrived in early January: The Supreme Court of the United States has agreed to hear testimony regarding the original “Quill vs. North Dakota” ruling which has been the foundation of anti-affiliate nexus efforts. Quill required a company to have a physical presence in order to be required to collect state sales tax.  35 states have joined into the request to have the case heard. It is being opposed by Overstock, Wayfair and Newegg. Many organizations, such as the PMA and the National Retail Federation, are torn over this issue as they have members which are both brick & mortar and online merchants.