Figures the day after I made my post about Amazon threatening states, referencing California as a state that had been deemed safe until January, it came to light, that California is now in more threat than ever. The language from AB 178 has now been inserted in to the California Budget Bill, and could be signed any day.
Yesterday I had the pleasure of sitting in on a webinar with Melanie Seers founder of AffilaiteVoice.com, and it was very enlightening. Here’s is some of the things that I learned.
- The Hawaii Tax Bill will go in effect July 1st.
- The only safe states are Alabama, Delaware, Oregon, New Hampshire, and Montana because they do not collect sales tax.
- That while you may not hear about the Bill, many states are drafting, or considering similar bills, if not already hearing. Find out what your state is doing!
- SSTP (Streamlined Sales Tax Program), while not the best solution, is a better solution.
- 23 States are already members (or in the process of becoming members) of the SSTP (with several others on the way), and if passed in Congress and signed by the President, these states will immediately will require the collection of Sales Tax.
- SSTP will greatly reduce the complexity of remitting sales tax to states (from over 800+ tax districts to 50? that’s a big drop). It has been proposed that merchants will pay the state, and the state will remit to the counties.
- And most importantly I learned that not every single state defines a nexus the same way. Ie, New York said a merchant has a nexus if affiliates made $10,000 in the 4 previous quarters, while another state (confirming which) says it doesn’t matter if you meet a threshold or not, you have a nexus.
Merchants, this is a very serious issue and should not be brushed under the rug. With soon to be 2 states having this type of law in effect, it is expected to steamroll through the country.
Yesterday, while speaking with a merchant, I was asked, how will they enforce these new laws, which I am sure is a question on many merchant’s minds? Massive Audits, Networks’ & Merchants subpoena’d, ect. Do you want to be held on charges of fraud, tax evasion, or worse?
Merchants, I am writing this to you for several reasons. First, Affiliates are working their hindends off fighting this, while Merchants are sitting back. Merchants, we need you to step up and help in this fight.
- Keep on top of the bills in each state. Watch the language and make sure you know and understand what each states definition of a nexus is.
- Email, write letters, and visit reps, even if they aren’t in your state. Write or meet on the behalf of your affiliates that are local to that state. Level with them and they will level with you.
- Keep your affiliates informed! This is so important. Which do you think is better, letting them know well in advance what is going on, even if you don’t exactly know what that is, or spring your decision on them last minute? Think about it, what if it is appealed? Would your affiliates come back if you were on the level with them every step of the way, or if you just dropped a bomb on them?
- Contact your local reps even though you already collect sales tax in your state. You may be asking ‘why? My competitors will lose there edge that they have over me locally’ Sure, this may or may not be true, but do you want to contribute to squashing small businesses, or do you want to help them and your community?
Merchants, now is not the time to be a part of the problem, but a part of the solution. Very worse case, if fighting these bills fails, instead of removing affiliates as soon as bills are being signed into laws, we should all be working together to devise a plan on how we can collect and remit the sales tax. While collecting the sales tax is not a major issue (a script on your site could solve that problem), it is an accounting nightmare, but not one that is un-doable, whether through lobbying for SSTP, or creating a solution that can be used industry wide.
Thanks to Melanie, AffiliateVoice, and all those that participated on the call.
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