This is a shakedown!! Other states will follow suit if the law is passed in California which just scares the hell out of me. Is it true that merchants will be responsible for collecting sales tax from an affiliate once they have reached commissions of $10,000.00 in there state with that merchants affiliate program?
"Is it true that merchants will be responsible for collecting sales tax from an affiliate"
No that's not how it works at all. Affiliates don't make sales and collect money so they don't pay tax.
The merchant has to start charging sales tax to the consumer and then pays it to the state. But the merchant's don't want to have to increase their cost to the consumer if they don't have to, so some will just drop affiliates so they don't have to charge sales tax.
__________________ Linda Buquet :: Affiliate Recruiting, Promotion & PR
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So since I'm a merchant I would have to register with the State that has enforced this new taxation and charge sales tax on our product that are sold in that state, is this correct??
This is a shakedown!! Other states will follow suit if the law is passed in California which just scares the hell out of me. Is it true that merchants will be responsible for collecting sales tax from an affiliate once they have reached commissions of $10,000.00 in there state with that merchants affiliate program?
No, it is worse. It is not commissions of $10,000... It is gross receipts of $10,000 or more:
Quote:
This bill would include in the definition of a "retailer engaging in business in this state" a retailer entering into an agreement with a resident of this state under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link or an Internet Web site or otherwise, to the retailer, if the cumulative gross receipts or sales price from sales by the retailer to customers in this state who are referred pursuant to these agreements is in excess of $10,000 during the preceding 4 calendar quarterly periods, except as specified.
If this bill passes in California, I will be moving to another state immediately. If it comes down to it, I will be leaving the states altogether. This country is going downhill fast and it may be time to leave any ways.
The bill is completely misguided and it may actually backfire. California needs to set the precedent by shooting this bill down.
So since I'm a merchant I would have to register with the State that has enforced this new taxation and charge sales tax on our product that are sold in that state, is this correct??
Only if you have 10,000 in cumulative yearly sales BY Ca affiliates sold TO Ca residents.
That's part of the concern - if you are going through a network it makes it hard to even figure out. You know where your end sales are made, the network knows which affiliates are in CA but how do you tie together the data to track that affiliate 257 made the sale to customer 1,254?
Even if you have an in-house program it will be hard to figure out if you meet the threshold if you have a fairly small program. If you are doing pretty big sales volume through the affiliate channel, then chances are you meet that threshold.
__________________ Linda Buquet :: Affiliate Recruiting, Promotion & PR
The free forum support we provide is made possible by all the 5 Star programs at the top of the right sidebar & in the directory below. Please visit & support our merchants.
If this bill passes in California, I will be moving to another state immediately.
While I agree the bill is misguided and I'm totally against it, if I was a full-time affiliate in CA, I would not move just because it was passed. Lots of merchants won't drop affiliates, there will only be some that will - based on what happened in NY. I think many merchants didn't react at all, either due to being clueless or sticking their head in the sand or were waiting to see if it would be repealed and then forgot about it.
So it will only have a major impact on your income if a majority of merchants that you currently work with drop their affiliates. There are typically several merchants in a market, so you should be able to find other merchants in your niche that you can work with.
__________________ Linda Buquet :: Affiliate Recruiting, Promotion & PR
The free forum support we provide is made possible by all the 5 Star programs at the top of the right sidebar & in the directory below. Please visit & support our merchants.
I just found out that the hearing has been pushed back from April 13th to April 27th, which gives us a little more time to lobby.
__________________ Linda Buquet :: Affiliate Recruiting, Promotion & PR
The free forum support we provide is made possible by all the 5 Star programs at the top of the right sidebar & in the directory below. Please visit & support our merchants.
I just found out that the hearing has been pushed back from April 13th to April 27th, which gives us a little more time to lobby.
Nice! Let's beat this bill. Moving out of Cali is a bit extreme. Perhaps it would be good to wait and see how many advertisers cancel and then assess how much income they were bringing in, if the the bill is passed. Hopefully none of us will have to deal with this.
This affiliate nexus BS is back in the CA budget tax bill and could be voted on next week. Here is the email I got from CJ.
Quote:
Dear California Publisher,
ALL HANDS ON DECK! California's budget tax bill now includes "affiliate nexus" language and could be voted on as early as next week! Commission Junction is opposed to the internet retail tax and this language in general, and we strongly encourage you to send a letter of opposition to Senator Denise Moreno Ducheny (senator.ducheny at sen.ca.gov). But don't stop there:
* Navigate to the California State Assembly web site
* Use the "Find My District" link on the left of the home page and then type in your address and zip code to find your district number. Close that window.
* Use the "Assembly Roster" link on the home page to find links to email your assembly member.
We encourage you to use email and phone calls to express your opposition.
and scroll to the California Internet Retail Tax section to find a template you can use and modify accordingly for your email as well as the Senator's email address.
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