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:

Since the Supreme Court ruling was issued, many merchants have been confused about the legislation status for each state. Most of the state legislative sessions had ended by the time the ruling was issued. Therefore the current legislation will remain the law of the land until new legislation – both rescinding affiliate nexus laws and creating economic legislation. Several states have issued guidelines to address this confusion. Indiana crafted a bill enabling that state to begin tax collection quickly if SCOTUS ruled in South Dakota’s favor. Texas plans to announce their rule amendments in early 2019, while Nebraska is targeting Jan 1, 2019. Arizona and Wisconsin are considering reducing state income tax to reduce the burden of the increased sales tax collection. Utah had a special session to quickly pass economic nexus legislation. Meanwhile states which have no sales tax – Delaware, Montana, New Hampshire, Oregon and Alaska – are concerned about how the ruling will affect their businesses. Some states are considering forcing merchants to pay for retroactive taxesIdaho’s economic nexus legislation went into effect on July 1. Texas plans to announce their rule amendments in early 2019, while Nebraska is targeting Jan 1, 2019. Arizona and Wisconsin are considering reducing state income tax to reduce the burden of the increased sales tax collection. Utah had a special session to quickly pass economic nexus legislation. Meanwhile states which have no sales tax – Delaware, Montana, New Hampshire, Oregon and Alaska – are concerned about how the ruling will affect their businesses. Some states are considering forcing merchants to pay for retroactive taxesIdaho’s economic nexus legislation went into effect on July 1.