May 24, 2013

Important Affiliate Nexus Tax Law Updates from the PMA

The Performance Marketing Association has just issued an important alert about state sales tax laws. Here’s a recap:

+ Minnesota has passed F 677, an affiliate nexus tax bill that goes into effect June 30. Minnesota-based affiliates and retailers who do business with Minnesota based publishers should consult legal advisers about this as soon as possible.

Missouri has passed House Bill 252/Senate Bill 23. Gov. Jay Nixon is expected to sign this into law, making it effective Aug. 28.

Maine has introduced H.P. 251, which reportedly has support from the governor.

West Virginia did NOT pass an affiliate nexus tax. 

+ In Illinois this week, the state Supreme Court heard the state’s appeal to the PMA’s victory in 2012. Here’s what the PMA reports:

“Seven justices oversaw this hearing, and the PMA and our industry was very well represented by George Isaacson and Matt Schaeffer, the attorneys who secured our initial victory.  The Illinois Attorney General’s office represented the defendant, the Illinois Depart of Revenue. As appellant, they had first remarks lasting 20 minutes, followed by George’s arguments, lasting 20 minutes, followed by the appellant’s closing comments for 10 minutes.”

“In 2012, Judge Cepero ruled that Illinois’ affiliate nexus tax was unconstitutional, it violated the Internet Tax Freedom Act, and that a click on an ad does not establish nexus for out-of-state retailers (thereby obligating them to collect Illinois sales tax).”

“It’s difficult to predict how the court will rule, but the justices asked informed and engaging questions, and we believe there’s keen interest in our case because it was added to the docket six months ahead of schedule. We don’t know when they’ll issue their opinion, but we are hoping for the Illinois courts to continue to accelerate this case, providing we continue to win!”

As always, we strongly urge affiliate marketers (publishers and advertisers) to consult legal advisers on all matters of affiliate nexus tax law as they arise. Our thanks to the PMA for continuing to champion the best interests of all affiliate marketers across the country.

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