72 Kilowatts Internet Marketing

My overall impressions of the DMA Tax Call

Just my interpretations of opinions given by attorney George Isaacson on the call….

1.) Traditional affiliate marketing does not constitute a nexus, based on the wording of the May 8th memo. The memo, PERHAPS, is a direct response to the Amazon lawsuit in an effort to keeping the law “constitutional”.

2.) NY affiliates cannot specifically target NY customers in any form out side of web links and remain “unaffected” in the eyes of the merchant.

3.) The merchants, not the networks, are specifically charged with knowing the revenues of all performance based activity done by NY residents to NY customers.

4.) NY affiliates MAY (and this is still a sticky one) email market to NY residents providing they do not SPECIFICALLY mention a merchant by name in the email. Mentioning a merchant name would potentially qualify as “additional activity”, and therefore make them a party to the nexus definition.

All in all, I think the call was what I expected, and a good one. Here’s the downside.

Merchants still have to apply as a tax entity, then rebut that they have a nexus in NY based on having only traditional affiliates. Second, the burden of proof falls on them to prove that their affiliates are NOT engaging in “other activity”.  (UPDATED Note:  I’m still not sure exactly who has to register, and who doesn’t…  What step is between “registering” and “rebutting”, etc.)

Might still be too much responsibility for some merchants to hold on to NY affiliates at least, and perhaps their programs, at worst.