Post on 14-Jan-2015
description
Killing the Affiliate Nexus Tax Dead
Affiliate Summit EastAugust 2011
Moderator◦Scott Allan
Vice President of Marketing, LinkShare
Panelists
◦David L. AndreFounder and Chairman, Cartera Commerce
◦Rebecca MadiganExecutive Director, Performance Marketing Association
◦Matthew Schaefer, Esq.Partner, Brann & Isaacson
Introductions
Affiliate Nexus Tax
Amazon Tax
Click-Through Tax
E-Fairness Act
Main Street Fairness Tax
Advertising TaxInternet Tax
Streamlined Sales Tax
Interstate Commerce
Physical Presence = NexusNo Physical Presence = Not Required to Collect Sales Tax
What Constitutes Physical Presence?
States that have adopted Affiliate nexus laws:
New York North Carolina Rhode Island Arkansas Connecticut Illinois Vermont* California
In addition, similar bills have been introduced in other state legislatures
Several States Pass “Amazon Laws”
Grassroots SuccessFailed in 32 States, Passed in 8
No Law
Passed
Mass Retailers Association launched major PR and legislative campaign in Q1.
Immediately sought advice from colleagues at PMA and super-affiliates in Illinois.
The three largest affiliates in MA organized, engaged a top lobbyist and PR firm.
After a major effort we were able to bottle the bills in the Finance Committee, and avoid an end-run where the language was slipped into the budget process.
Second-level defense: A major education effort to key legislators, leadership, governor’s office and administration.
Massachusetts Case Study
Get the best advice possible.Research what lobbyists have clout.
Organize and fund a coalition.Budget for a long-term effort.Assign a credible spokesperson.
Fight the legislative front to win.Fight the PR front for parity.
Engage the opposition.
Focus on simple messages.This bill won’t work. Job loss. Revenue loss.
Engage associations. (i.e. New England VC Association)
Engage broad network of affiliates and employees, yet use them judiciously.
Massachusetts Learnings
The PMA has filed suit in Chicago challenging the Illinois affiliate nexus law, HB 3659
The PMA alleges the law unlawfully targets online performance marketing
It violates the Commerce Clause of the United States Constitution
And the federal Internet Tax Freedom Act
PMA Challenges Illinois
HB 3659 uses the relationship between Illinois publishers and out-of-state advertisers to impose a use tax collection obligation on Internet retailers located outside the state
Under HB 3659, the display of online advertisements on the websites of Illinois affiliates where compensation is based on sales can create nexus for an out-of-state retailer
Retailers using other forms of national advertising are not, however, required to collect Illinois use tax
HB 3659: Affiliates are the Nexus “Hook” For Internet Retailers
Amazon and Overstock challenged the New York web affiliate law
State intermediate appellate court concluded that the New York statute did not violate the Constitution on its face
Court rulings inconclusive - further judicial proceedings are underway
New York Litigation
Alternatives
California Referendum
Alternatives
Durbin Bill
Alternatives
Model Legislation
A big issue for small-medium internet retailers!
Spend time on this - make sure the executives at your company understand the importance of the issue
Organized campaigns are successful
Disorganized campaigns are easy targets for the opposition!
Not Just an Amazon Issue
Stay informed Attend grassroots events! Sign petitions Call and write to your
legislators
Get Involved!
www.performancemarketingassociation.com
Q&A
Thank You!
Dave AndreFounder and ChairmanCartera Commerce, Inc.
www.cartera.comdandre@cartera.com
Matthew Schaefer, Esq.Partner
Brann & Isaacsonwww.brannlaw.com
mschaefer@brannlaw.com
Rebecca MadiganExecutive Director
Performance Marketing Associationwww.performancemarketingassociation.com
rebecca@performancemarketingassociation.com