Fresh York Shuts Down Affiliate Businesses
Affiliate law sends e-commerce firms running for the hills.
Fresh York residents by now feel the pain of high taxes. But now the state has basically shut down many of its resident’s businesses that rely on affiliate revenue, counting domain name owners.
In an effort to collect more tax revenue, the state decided that firms (namely Amazon.com) that have affiliates in the state technically “have a place of business” in the state. Thus, they are required to collect and remit sales tax on purchases shipped to Fresh York.
What the bureaucrats in Albany didn’t think regarding is how firms with affiliate programs would react. I just received an email from Collectors Choice Music with the subject line “NY AFFILIATE NOTICE AND TERMINATION”. Here’s what it states:
Due to recent changes in Fresh York law relating to the collection of sales tax, Collectors’ Choice Music, Inc. (CCMUSIC.COM) will no longer offer its products for sale through affiliates or other representatives (the “Affiliate Network”) that are residents of Fresh York State and that are paid a commission on such sales. Accordingly, CCMUSIC.COM is hereby immediately terminating all participation in the Affiliate Network by all affiliates that are Fresh York State residents through all performance marketing networks. A Fresh York State resident is (a) any individual who maintains a permanent place of abode in Fresh York State and (b) any corporation incorporated under the laws of Fresh York and (c) any corporation, association, partnership or other entity doing business or maintaining a place of business in Fresh York State. (See Fresh York Sales and use Tax Regulations Section 526.15, 10 NYCRR §526.15.)
Therefore, if you are a Fresh York State resident, your participation in the Affiliate Network is hereby immediately terminated and you must immediately cease and desist from any referrals of sales to CCMUSIC.COM and remove any links to all websites operated by Infinity Resources, Inc. and its subsidiaries, counting without limitation Collectors’ Choice Music, Inc. dba CCMUSIC.COM, from your website. [The change in the law does not require CCMUSIC.COM to cease doing business with or through affiliates who simply advertise CCMUSIC.COM’s products without compensation or who are paid a fixed amount on a “per click-thru” basis (“Affiliate Exemption”).]
Granted, Collectors Choice Music isn’t a big e-commerce firm. But if other online stores ditch their Fresh York affiliates too, then the income of Fresh Yorkers participating in affiliate programs will drop substantially. And that means Fresh York won’t collect as much sales tax.
Brilliant. Simply brilliant.
