I've made TONS of edits to that post as new issues and different legal viewpoints surface.
I had a REALLY long talk with the Internet attorney so here’s an update.
UPDATE 1:30 PM: INTERPRETATION OF THE TSB as it Relates to Affiliate Links: Just had a very long detailed conversation with John Dozier Esq., Managing Partner of Dozier Internet Law. John is one of the leading Internet attorneys out there, understands affiliate marketing and has handled numerous affiliate marketing related cases on a variety of issues. We went over the TSB in detail and the way he reads it, is not as clear cut as it was when we discussed it on the DMA call.
If you carefully and critically read every place in the TSB doc that mentions advertising or placing links, some of the information even sounds contradictory. In some places it sounds as if they are saying regular advertising links are not a problem, but affiliate links are because compensation is based on a pay per sale model. So many potentially problematic issues came up and everything is all based on interpretation because it's not clearly written. The bottom line too is, this TSB document is not the law and is not binding. It's only an attempt to clarify and explain the law and is subject to change.
SO ALL THAT SAID: If I were a merchant I would not try to figure it out,
I would contact John right away to get some help. I would maybe also go ahead and do the TOS changes to be on the safe side. BUT REALIZE that simply changing your TOS in and of itself will not protect you and may not be grounds to rebut. Based on the way NY interprets and enforces the law, just having pay per sale affiliate links even with no other solicitation still could constitute nexus.
Based on everything that happened on those 2 calls and the fact that there are a ton of other issues people haven't even thought about yet... I'm going to say this is WAY more complicated than people realize and there are a bunch of loopholes and gotchas. I wish I had recorded and was able to share both calls with you, so you could hear 1st hand the viewpoints from 2 very knowledgeable lawyers.
I will continue to report on news as I find it, but for me to try and explain complicated phone calls with attorneys and translate interpretations of this law this when I'm not not a lawyer, is just really not a good idea.
You just need to get a really good lawyer that understands affiliate marketing, Internet marketing and tax law!
Complete Coverage of the New York Affiliate Tax Issues Here!