Do you know where your merchants are?
Recent "advertising tax" legislation being considered, and in some cases passed, in several states has both affiliates and merchants on the alert. Business relationships responsible for generating significant revenue hang in the balance with the potential to deal serious damage to all involved if these bills are passed. Further information on "advertising tax" is available from the Performance Marketing Alliance and Affiliate Advocacy websites.
While the situation remains unclear, affiliates and merchants can take steps to prepare for any legislation that may affect their business.
- Affiliates can seek merchant programs that already claim nexus in their state of residence or are already collecting sales tax on purchases made to customers within their state.
- Merchants should publicize their nexus status so that those affiliates who reside in the merchant's state(s) of nexus are encouraged to join the program, increasing their pool of local affiliates.
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