Our Response to the New York Tax Law
May 19th, 2008
Posted by: Bob King, CEO
The blogosphere and affiliate marketers have been abuzz about New York’s new tax law that requires online retailers to collect and remit sales taxes on purchases by New York residents. The curveball New York threw in there was that the presence of affiliates in the state was a basis to establish nexus for tax purposes.
This got a lot more attention last week when Overstock.com summarily dropped all of its New York-based affiliates so it would not have to collect and remit taxes to that state.
While we are disappointed by New York’s decision, there is no way we are going to cut off our affiliates, our highly-valued business partners, because of an action by lawmakers.
The commitment we have to our New York affiliates goes for all ClickBank users, affiliates and product publishers alike. We do everything we can to ensure that you are successful so that means we adapt to new circumstances ….including changes in tax law. That’s just the way we do things around here.
So, New York affiliates, publishers, and consumers will have the systems they need by June 1. We’ll be sending out a technical announcement in the next few days on how it all works. And, rest assured, when changes in the marketplace impact affiliate marketers or product publishers, ClickBank will be there with solutions.
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Tags: affiliate marketing, affiliates, clickbank, New York, New York tax law, online sales tax
I do not see why Overstock would drop NY AFFILIATES when out-of-state affiliates could still sell via internet to NY State residents and the company would still have to recover those taxes for the state – or is there something that has not been stated or that I am missing?
In any case the work around is pretty easy – set up your company elsewhere – NV / DE – for a few hundred bucks.
I did not see any updates, but I did notice that my NY orders now have sales tax. Are you going to post and let everyone know what changes have been implemented? If I missed it, I apologize but I did a search on the blog and only found two posts, none of which addressed it specifically.
Thanks, Anthony
Hi Anthony,
Sorry that you didn’t get an update. We had a short update in our internal communications, but didn’t post it on the blog. Here’s the text of the original update:
“New York state has implemented a new law that requires online retailers with affiliates located in New York state to collect sales tax from New York residents. Therefore, effective 2008-06-01 we are collecting sales tax on all sales made to residents of the state of New York.
If you have any questions about this change, please contact Customer Service.”
I just signed up as an affiliate and wondered if I were to sell one of my own products how the sales tax issue would work. I am a NYstate resident and wondered if I would have to pay sales tax for my items sold to others in and out of NYS.
Thanks
Tracy
Hi Tracy,
All sales tax for NY is charged to the customer and collected/remitted by ClickBank. As an affiliate or vendor you’re not required to do anything with sales tax, but customers in NY will have to pay it.
Thanks,
Beau