Nothing like starting out the new year at the dark end of the business – tax. For those of you awaiting the outcome of tax rulings on affiliate earnings earnt through out of state vendors, the decision is one step closer, but still open to appeal, as last week a New York Judge rejected Amazon’s Tax Suit.
The interesting ruling, handed down by Judge Eileen Bransten, dismissed lawsuits by Amazon and Overstock challenging New York State’s Commission-Agreement Provision that levies sales tax on internet sellers who have affiliate relationships with people and companies in the state.
Bransten found that the law “does not broadly tax any and all Internet sales to New York consumers. It requires a substantial nexus between an out-of-state seller and New York through a contract to pay commissions for referrals with a New York resident along with realization of more than $10,000 of revenue from New York sales earned through the arrangement. The neutral statute simply obligates out-of-state sellers to shoulder their fair share of the tax collection burden when using New Yorkers to earn profit from other New Yorkers.”
The state An appeal is expected.
In other words – if you are a moderately successful start up affiliate marketer making less than $10,000 per annum you are fine. Once you pass this mark, according to Branstens interpretation you must pay tax.