The "Amazon Tax": Latest Developments in NY and Beyond

As we have discussed multiple times in our blog and our recent Webinar, the efforts by states (led by New York) to impose new sales tax collection burdens on affiliate marketers continue to spread. While Amazon.com's case against New York State is currently on appeal, other legislatures are not waiting for the final verdict before moving ahead, and neither are affiliate marketers. In recent weeks, California, Hawaii, North Carolina and Rhode Island all prepared to pass laws establishing sales tax burdens based on in-state affiliate program participants, prompting major marketer Overstock.com for one to suspend its affiliate relationships in those states as of July 1, 2009. In fact, California and Hawaii actually passed their bills and submitted them to their governors (Schwarzenegger and Lingle, respectively) for approval into law. Interestingly, though, both governors vetoed the bills, leading Overstock to quickly announce on July 2, 2009 that it had reinstated its California and Hawaii affiliates. The fates of the efforts in the other two states, as well as which additional states that may introduce such efforts, remain unclear, but our firm will be following this closely as well as tracking the New York case.

Our Marketing Contracts and Internet Law groups are ready to assist our current and prospective clients with information and advice about sales tax issues, as well as all other legal matters relating to affiliate programs.

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