Today, June 1st 2008, a tax law specifically for affiliate marketers is activated in the state of New York. Based on the premise that an affiliate for a company can be considered as constituting a physical presence of the company in the state, the state of New York has decided to start requiring tax payments. They have even expecting a neat sum of $50 million from this tax law and has accroding to the New York Times already inlcuded it in the state budget.
The witch hunt begins about a year back, November 2007, when NY Governor Spitzer plans to pin down and tax any and all online transactions for companies not physically present in NY. Spitzer tried again earlier this year but soon had to leave office in a hurry due to some scandal. Not to worry, replacing Spitzer was the new governor David Peterson, evidently also a die-hard fan of the affiliate tax law. That's where it really all started, March 2008.
The month of May we got to see the result and reaction to the tax law from the affiliate world as Amazon.com showed their dislike by filing a comapliant to tha State Supreme Court in Manhattan and Overstock.com folded under the pressure only to release their New York affiliates as of May the 20th 2008.
To share some light in the end of this tunnel Overstock later, 30th of May, announced that they too were filing their own suit against the new NY tax law to the State Supreme Court. Now there is hence two major players in the fight against the taxation of NY affiliates, Amazon.com & Overstock.com. A much brighter light in the end of the tunnel!
