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:

Eleven states began requiring collection and remission of state sales tax on October 1st, including Kentucky, North Dakota, Alabama, Nevada and Illinois. South Dakota, New Jersey and South Carolina will begin on November 1st. Connecticut sales tax collection will begin on December 1st; in addition Connecticut has a myriad of additional requirements for merchants for various notifications and even a report to the state of each seller in their system starting in 2020 (i.e., all the names and addresses of every store owner on Etsy). Rhode Island intends to enforce retroactive collection for remote vendors. States without sales tax are finding their own ways to respond. At the Federal level, Sen. Bob Goodlatte (D-Mont) introduced the Stop Taxing Our Potential Act of 2018 one week after the Wayfair opinion was released by SCOTUS; Montana has no sales tax. Rep. Bob Gibbs (R-Ohio) also introduced the Protecting Businesses from Burdensome Compliance Cost Act to protect small businesses from the difficult navigation of the web of state and local taxes being imposed. New Hampshire prepared legislation requiring other states to register with the New Hampshire Attorney General and pay a fee before pursuing any New Hampshire businesses to collect a use tax. The NH Attorney General will also review each state’s legislation to determine constitutionality as well. An excellent analysis of the SCOTUS ruling, consequences, and subsequent responses was published by BNA.