How Affiliate Tax Will Hurt CPA Networks & Affiliates

PACE LATTIN - Jun 30 - There has been a great deal of discussion of all the Affiliate Tax laws being passed in the media. Unfortunately, thanks to a great spin campaign by companies such as Walmart, the discussion has been focused on how these new Nexus Tax laws will affect large companies like Amazon and Overstock. This is not an “Amazon” tax, or an “Overstock” tax, but instead a “Small Business Tax” that has been labeled incorrectly in order that the general media might ignore the reality of what these taxes will do to small businesses. The laws specify that if there is any affiliate of any company making revenue for a product in that state, then the company itself has to pay taxes for any transaction in those states. This means that anyone engaged in any sort of ecommerce, whether it is sale of a product, promotion of a program, signups to site, in theory could be forced to pay those states taxes.

Many companies, from lead generation firms to dating sites are going to start avoiding CPA networks in those States for that specific reason. They do not want to risk that working with a company in a certain State will somehow cause a nexus and thus require them to file paperwork, file additional taxes. They’d rather make it easy and work with someone else.