August 16, 2011

Schaaf-PartnerCentric Surveys California Affiliates on Nexus Tax Issue

As part of an on-going effort to understand how affiliate nexus tax laws are affecting the affiliate marketing industry, affiliate program management agency Schaaf-PartnerCentric has just completed a survey of affiliates in California, where such a law has been enacted.

Schaaf-PartnerCentric sent the survey to the thousands of California affiliates who actively promote affiliate programs managed by the Austin-based company in late June, just weeks after California lawmakers passed the nexus tax.

With nearly 100 respondents, the survey found that nearly half of the affiliates (49.3%) think the affiliate nexus tax represents a significant threat to their business.

“What the survey illustrates most clearly is while many affiliates see the nexus tax law as a threat to their future livelihood, they do not yet have enough information to understand or address the issue head-on,” said Brook Schaaf, CEO of Schaaf-PartnerCentric.

More than 50% of respondents said they do not feel prepared to deal with the ramifications of the new law. Alarmingly, a total of 52.6% of those surveyed consider themselves uninformed on the topic, with 32.5% saying they feel not very well informed and 30.1% saying they feel somewhat informed.

Not surprisingly given that most respondents consider themselves uninformed, 40.9% of those surveyed said they have not taken action so far to address potential liabilities with respect to the nexus law. Another 28.9% are unsure of what action they might take in the future. The remaining affiliates are taking the following actions:
– changing the company address (10.8%)
– moving all employees out of state (4.8%)
– moving the business to a CPC or other non-CPA model (8.4%)
– certifying that we don’t perform actions that fall under solicitation (8.4%)

“It is important for us as an agency that manages affiliate programs and works with affiliates in every state to be able to communicate with our affiliate partners and understand the challenges they are facing as a result of this new challange,” Schaaf said. “We can all appreciate the negative effect such laws are having on our industry, so it’s vital that we all work together to address concerns, find solutions and mitigate the harm to business.”

The survey also provides insight into how affiliates are gaining information about the nexus law, and about how they are dealing with it. To learn more about the California affiliate nexus tax survey, visithttp://images.schaafpc.com/CANexusTaxSurvey.pdf.

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