New York started this whole mess… Declaring a “Sales Tax Nexus” to include wherever an affiliate marketer was based out of. Then Virginia, Mississippi, New Mexico, the Carolinas, etc. all trying to pass laws declaring the same tired refrain.
Of course, there’s the ever shining example of Missouri which takes the position that no new law is necessary and that everybody owes no matter what. It’s all becoming so serious, and so silly at the same time.
The most ridiculous example would be that a customer in Maine buys product from Amazon (in Washington State) which ships the product from Kansas, and the click thru was from an affiliate marketer in Missouri who hosts their website in Virginia. Meaning that Sales Tax would be charged from Kansas, Missouri, and Virginia (and maybe Maine). Oh, each city and county in those states most likely would want their share too.
Which can only mean one of two things. Either State Legislatures know the ramifications of all of this and they just don’t care about anything but gaining a few cents in taxes (even though it will cost four to five times the tax amount in order to collect it). Or, they’re not paying attention to the real world ramifications such moves will truly make.
In either case, I’m considering a proposal of my own… U-Haul. Sam Kinneson famously stated in his comedy routine that we should not give foreign aid to countries without food. We should give U-Hauls. “See this.. This is Sand, YOU CAN’T GROW FOOD IN SAND”! Give em a U-Haul and point them somewhere that food can be grown.
In a whole “Freakanomics” sort of way this same scenario may end up being played out in the Affiliate Marketing Industry. Some smart person in some State is gonna declare that affiliate marketers in their State don’t have to be responsible for affiliate marketing taxation from another State. And then a whole lotta U-Hauls are gonna get loaded up and on the road.
Whichever State creates this “safe haven” for Affiliate Marketers is gonna win big. Think of all the data centers, high speed Internet connections, thousands of entire families, and all the supporting merchants, suppliers, shippers, etc. that will flock to such a place. It would become a sustainable economic boon that will leave some States economically devastated in the process.
All because some State Legislators didn’t have a clue just how unworkable, unfair, and economically unfeasible affiliate taxation via sales tax mechanisms truly are when there are so many taxing authorities and cross border transactions there truly are.
My conclusion? Either get a U-Haul or lay out exactly how bad this is and get onto your State Legislators right now.
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