Call us at 720-675-8450

Are Business Owners Looking At Affiliate Marketing Nexus Tax Issues?

NexusTaxI have been following the Nexus Tax.  Other names that have been associated with this tax are The Amazon Tax, Affiliate Nexus Tax, and The Internet Tax.  As you can probably imagine many, online merchants, online marketers and online affiliates are watching very closely as lawmakers continue to introduce bills for their states that would require businesses and digital store owners to collect taxes for sales made in specific states.  For an understanding of the tax, we would recommend your business contact your tax professional or legal tax representative for the best advice and how your company will be impacted by this tax or these new laws as they are passed in each state.

As a legal term, “nexus” has a meaning that the cases are connected or facts that come from the same grouping.  If you have a nexus of facts, those facts belong together or are categorized as belong or are connected.  As a term related in contract law and for the most part as it relates to sales tax, your business must be connected to a state for that state to collect sales tax from you.  A typical example of this would be where a business sells a product to a customer in Colorado and then must  collect the sales tax and pay that tax to Colorado’s Department of Revenue with the proper tax returns and forms.  As a business that might sell in each state in America, that could be a time consuming and costly measure.  There may already be businesses paying the nexus tax if they have brick and mortar stores in those states or if they have a part of their business located in that state, etc.

Right now there a a handful of states that require sales tax to be paid to them by merchants selling online in their states.  The states currently requiring this are listed out in the Performance Marketing Association’s website.  Here in our home state of Colorado, we have the Big Brother Sale’s tax Law that was passed and signed into law on March 1, 2010.  We have been following along with the progress of this bill and its impact on businesses in Colorado.  There are numerous reports and impact studies that have been created and published in this regard and to catch up on sleep I suggest reading through all of them.

As a business you need to be educated in all the issues related to the Nexus Tax.  Many of advocates of the bills being proposed see this as a way of leveling the playing field for brick and mortar businesses or the obvious conclusion of raising revenues for the state.  There are also many advocates against the Nexus Tax and they are still drawing the battles lines and may actually be losing ground.  Recently, Missy Ward, a leader in the affiliate marketing world and board member of the Performance Marketing Association published that the affiliate marketing world is in need of its industry to contribute to the fund fighting against the Affilate Nexus Tax.  If you want further information on how this might change how you do business in the affiliate world, we would be happy to provide you further information. Contact us today.

Leave a Reply

You must be logged in to post a comment.