Dating sites Using NY Affiliates now Subject to State Tax.

http://www.tax.state.ny.us/pdf/memos/sales/m08_3s.pdf

If you use affiliate marketers,  or any marketers based in New York  you are now subject to new York Sales tax.  This means  Eharmony,  Match.com True.com and all other major sites with an affiliate program are now subject to this law.

This is major news in the affiliate marketing world,  and lots of companies are freaking out.   I’m surprised no one has said anything in the dating world yet.    The Law comes into full effect in 10 days.

15 Responses to “Dating sites Using NY Affiliates now Subject to State Tax.”

  1. Fred Says:

    This really should be called the “amazon.com tax” since that is who the target is. Stay tuned, Amazon is suing to block the collection of this tax.

  2. Jerome Says:

    So what if you’re not based in the US? They can’t enforce this to foreign companies… it probably violates all kinds of trade agreements.

    If you hire an Ad agency in NY it will declare its revenues and pay it’s taxes… not the clients of that ad agency…
    It really doesnt matter how they get paid, percentage or otherwise.

  3. arkadas Says:

    interesting act

  4. Shambhu Says:

    Re: Fred, if this is based on Amazon, does Example #4 mean they wanted to make sure it didn’t apply to Google? In example 4, as long as the payment is per number of clicks “whether or not a sale is made”, then you’re not subject to the tax.

  5. Joey Says:

    Who cares. Soon gas will be so expensive people will not be able to go on dates and you dating moguls will be dead. The future of dating will revert back to how it was in the 1800′s, local. You may laugh at me now, but gasoline will be our demise. The Mad Max series is slowly morphing into our society in the near future.

  6. Patrick Says:

    @Joey LOL

    So there will be no more municipal transports? ;D

  7. zach Says:

    and if anything, that could still help these sites. People will just need to plan dates out more before they travel a long ways.

  8. Fred Says:

    Shambhu:

    You raise an interesting point, especially since the company in example #4 is “G Inc.”.

    If a company has a sales office in NY then they must charge sales tax on internet sales. Currently Barnes & Noble charges NY sales tax since they have stores here, Amazon does not since they don’t have any sales offices here.

    This is how it works – the law is quite clear – and the supreme court upheld it since the state has already tried to tax on-line sales.

    So the new plan is to make “affilliates” into “sales reps” and collect more tax! Affilliates are paid ONLY when an actual sale occurs to they are a better target than “pay per click” (at least for now).

    Now back to example 4 – a manufacturing company:

    Manufacturing in the State of New York has been in decline for decades and many businesses have left the state for the South and other countries. It would probably not be possible to pass any law that potentially hurt manufacturing in any way. (Actually we subsidise it greatly and it still leaves because of our laws and taxes!)

    In 1980 about 150 of the Fortune 500 companies were headquartered in the state, now its around 30 – so outbound relocation is a big trend!

    So: I think two things are going on: 1) They didn’t want manufacturing in NY to be considered to be a “sales office” and therefore require sales tax. 2) They simply aren’t targeting pay-per-click ads (Yet), the focus has always been on affiliates and the claim that they are sales reps meaning that tax is charged since the “affilliate” is a sales representative inside the state.

    FYI: My biz is located in NY so if I buy anything for my biz on-line without tax, I’m required to indicate it on my NY Sales Tax return AND remit the proper tax.

    Good point about Google (AKA “G Inc.”): They’re next and it will be interesting to see how they get taxed!

    Perhaps 1-cent/page view in New York?????

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  13. Peter Says:

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  14. Ray Cullen Says:

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  15. Hot Girl Says:

    Interesting , I will try this for my dating sites .
    , it’s good of you to publish your information. Picking up some great tips
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