http://affiliate-blogs.5staraffiliateprograms.c...

I didn't go far enough in this post in indicating the importance of the “at will” nature of the contracts involved in affiliate marketing.

If, for whatever reason, someone were to be in favor of internet sales taxes, New York has left a giant out for merchants that they wanted to act as tax collectors for them. Simply eliminate the affiliates, and you eliminate the liability. An unintended effect to be sure, but a glaring one. A merchant is free to terminate any sales affiliate, at any time, for any reason. “At will” indeed.

So it goes without saying, that whether or not you oppose the tax, New York has done a brutal job in:

a.) Writing the tax bill
b.) Explaining it

With the law itself being Strike One, strikes two and 3 sure came quick thereafter.

Merchants are not doing any favors for themselves either. Vague references to “new laws” are not exactly a great way to generate the kind of consumer backlash required to get this nonsense overturned by legislative action. Merchants should themselves be educating consumers about why they have to pay tax now, and give them appropriate avenues to take action.

And too many affiliates on website monetizing forums seem preoccupied only with one thing - their earnings, and they reflexively attack anyone that threatens their next check. Affiliates and merchants could be pooling resources and arguing the economic harm such legislation could have, but not just on themselves but also for consumers.

That takes money and effort, and a broadening of “self interest” to also encompass the customers who click the links that bring those checks.

Too often when I raise this issue, it becomes boiled down to “I don't care as long as I can keep earning… pay your taxes yourself and stop threatening my cash flow.” No surprises that a lot of consumers seeing that kind of reaction, along with the well-publicized Overstock case (and the apparent lack of others taking legal action to get a temporary restraining order) means, for consumers, the best way out of this is to pressure retailers to suspend their affiliate programs for New York based websites until this gets sorted out in the courts.

The arguments are very strong to do just that, particularly when framed for retailers as NY'ers taking their business to competitors who don't have affiliate programs, and therefore won't have to charge tax. Online, 8% of a price difference is more than enough to push people to shop elsewhere. As I raised on 5 Star, Newegg and Chiefvalue are excellent examples. One has an affiliate program and now has to charge tax, the other doesn't and won't. Otherwise, these two companies share so much in common as to be nearly interchangeable. But now one has a signicant price advantage for at least one state's residents.

And while it's true New York would tax air if they could (they already tax dirt), what keeps them from doing so is a concerted, loud effort to suggest those that might try will not have a long career in public service. That requires people to get involved in protesting this. Consumers will en masse next week when they find out virtually all of their favorite sites are now charging sales tax. Retailers are already finding out in trying to figure out how to comply. Now affiliates need to also come out as strong. If it continues to be more of “leave me any my income alone - I don't care about your problems unless they impact me,” then my reaction will be just one among many.