I just wanted to provide a quick recap for the ongoing saga in the state of New York regarding the affiliate tax, which kicks in June 1, 2008.
Back in November 2007, then Governor Spitzer tried instituting the plan to tax all online transactions for companies that had no physical presence in New York.
The premise was that if a company has affiliates in the state that these affiliates constitute a physical presence for the company.
At the time, there was a public outcry, and he quickly backed off the plan, which was intended to kick in for Christmas 2007 sales online.
The bad idea came back around in February 2008 when Eliot Spitzer championed it, again.
Around that time, Governor Spitzer became embroiled in scandal and I had hoped the affiliate tax was going to get derailed as he was forced from office.
But the new governor, David Paterson, was just as gung-ho as Spitzer to push this tax scheme on the people of New York in March 2008.
Come April 2008, Stephen Dubner reported in the New York Times that the New York State budget has this new affiliate tax worked into it with an expectation that New York would get $50 million out of the tax.
And then, at the start of May 2008, Amazon filed a complaint in State Supreme Court in Manhattan objecting to the new law.
This brings us up to this past week when I reported on May 14 that Overstock sent notices to their affiliates in New York that they would no longer be in the affiliate program as of May 20.
Since then, affiliate marketing forums and blogs have been active with outrage on the issue. Some folks got the ball rolling to form an industry trade association to try and combat this and future attacks on affiliate marketing.
The affiliate networks have also gotten involved with ShareASale providing data on New York affiliates to their merchants, Commission Junction educating their affiliates and merchants on the issue, and LinkShare working with the DMA to host a call today to clarify the law.
Also this week, Jim Kukral, Lisa Picarille, Sam Harrelson, and I discussed the situation in detail on GeekCast.
I’ll be covering the future developments of the New York affiliate tax here.