We are nearing the date (June 1, 2008) when the state of New York will start charging taxes for online transactions for companies that have no physical presence in the state.

As I reported last week, Overstock dropped their New York affiliates to avoid their customers having to pay the tax.

That move threw affiliate marketers into a frenzy and many affiliate and merchants have been wondering what will happen next.

ShareASale announced that they are making a report available to merchants regarding their New York affiliate-referred transactions.

And now Commission Junction has sent a notice to affiliates with their take on the issue:

As you may already know, the State of New York recently enacted new legislation that addresses tax registration, collection, and other time-sensitive obligations. As with all laws, this law may or may not apply to you and your business. We are actively monitoring the law and will use reasonable efforts to protect ourselves and our publishers as we deem appropriate.

The application of the law is dependent on particular business and factual circumstances, and Commission Junction is not in a position to provide legal and tax advice regarding this law. However, we encourage you to perform the appropriate due diligence as it relates to your business.

For your convenience, we have provided a link to a memo from the New York State Department of Taxation and Finance, Office of Tax Policy Analysis, Taxpayer Guidance Division that addresses the new legislation:

http://www.tax.state.ny.us/pdf/memos/sales/m08_3s.pdf

Sincerely,
Commission Junction

I understand a similar letter went to CJ merchants.

As far as I know, Performics, LinkShare, and other affiliate networks haven’t released any statements about the issue.

Will this whole debacle hinge on the success of the Amazon lawsuit that challenges the New York law? Stay tuned.