August 01, 2013

States with Affiliate Nexus Tax Law Now Stands at 13

So far this summer three states have enacted their own affiliate nexus tax laws as the industry awaits movement on a federal solution, commonly known as the Marketplace Fairness Act, to the issue.

Maine, Missouri and Minnesota are the latest states to pass affiliate nexus tax laws. This brings the number of states with affiliate nexus tax laws on the books to 13.

In 2008 New York became the first state to enact a nexus tax law. North Carolina and Rhode Island followed suit in 2009. Five more states (Arkansas, California, Connecticut, Illinois and Pennsylvania) enacted nexus tax laws in 2011. Georgia passed such a law in 2012 – and Kansas passed its own version earlier this year.

According to theĀ Performance Marketing Association, more than 90,000 people and businesses have now been directly affected by the passage of such laws, including 5,300 affiliate marketers in Minnesota, 5,000 in Missouri and 1,500 in Maine.

The Marketplace Fairness Act has passed the U.S. Senate and, if passed, would require online retailers to comply with local sales tax regardless of whether or not they have a presence in the state.

As the federal solution remains unrealized, Amazon and Overstock have filed an application to petition the US Supreme Court to hear their challenge to New York’s affiliate nexus tax law. The PMA reports that this move indicates that Amazon and Overstock have lost faith that the Marketplace Fairness Act will pass the House.

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