Affiliate Incomes Being Slashed
Is a new Internet state sales tax law coming soon to your state?
This is the buzz I’ve been hearing the past several months. It seems with our current poor economic status many state budgets are in dire straits, so to compensate they are looking under every rock to find ways to generate monies. Some states have already passed new legislation on this matter .
Currently, US Internet consumers are not required to pay state sales on their purchases from out-of-state vendors. Technically however, while remote sellers are not required to collect sales taxes (though there are some exceptions), individuals who make purchases on the Internet are suppose to keep track of their purchases and pay the sales tax as a “use” tax on their state tax returns. Though few people do, however, and the use tax is almost impossible to enforce, which effectively exempts these purchases.
Regardless many state governments are seriously considering a new law that would require the collection of Internet state sales tax from Internet sellers on sales made from outside their state.
Spearheading this new legislation is little-known but influential alliance of state politicians, large retailers, and tax collectors. One such organization is called Streamedline Sale Tax Project. The project began in March 2000 and as a result they produced the Streamlined Sales and Use Tax Agreement. The purpose of the Agreement is to simplify and modernize current sales tax and use laws. Basically, if they have their way, the days of tax-free Internet shopping in all states would be over, though if the submitted bill was passed currently only the states that are members of the organization would participate in the Internet sales tax collections.
They currently have 18 states signed up as full members in their organization and an additional 4 states as associate members. They hope by having these states in agreement to their organization’s efforts will influence Congress’ decision on the submitted bill.
Large retailers Amazon and Overstock have been canceling their affiliate program in some of these states. And I wouldn’t be surprised if more vendors follow suit if more states join this effort.
Several marketing associations and large retail companies are fighting this legislation claiming the lack of uniformity among all the counties and states, as to what goods are taxed and at what rate, would make the process of collecting these taxes too complex.
This certainly is not a new debate, for pro-tax officials and state governments have been trying for seven years to get Congress to pass a new sales tax law. Claiming it would help their state’s reduced state tax income collections (largely due to the increase of e-commerce sales) and budgeted monies for other areas of their state funded programs
Whether the new bill to Congress will be passes it remains to be seen, for bills were also introduced in 2000 and 2003 but failed to make it to either the House or Senate floors for a vote.
However if you are not in favor of this bill I strongly recommend you write your state senator and/or congressman and ask them not to pass the legislation.
Remember we are in this together, so protect your affiliate income and write your government representatives.
Till next time,
Rob
