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:

In one of their final rulings of the year, the Supreme Court of the United States overturned the 1992 Quill vs. North Dakota ruling requiring a physical presence as a condition to collect state sales tax.  The court ruled that the act of selling something to a state resident was sufficient to require a merchant to collect and remit sales tax, regardless of their physical location. As a result of this ruling, all states with economic nexus legislation are expected to enforce it, states without economic nexus legislation are expected to pass it quickly when their new session begins, and affiliate nexus legislation is no longer applicable. While states are celebrating future increases in tax revenue, small businesses are concerned about how they will implement the tax collection and remittance process for over 20,000 tax collection jurisdictions. Louisiana passed legislation requiring  out of state merchants to collect and remit state sales tax; prior legislation only required merchants to notify residents that tax was owed. Once the SCOTUS decision was announced New Jersey lawmakers raced to pass an economic nexus bill before their June 30th deadline for the 2019 budget. New Hampshire officials were infuriated that their local businesses could be pursued for out-of-state sales tax collection since that state does not collect sales tax.