GTO Management

We have been doing a lot of thinking and research on the topic of the New York decision to hold non - New York based merchants who have affiliates doing business in New York accountable for collecting state sales tax.   We’ve been speaking with lawyers, other affiliate managers, industry colleages, our clients and each other on this.

We don’t by any means claim to know all the answers in this - no one does until the Amazon and Overstock lawsuits are decided or settled with clarification of the law.  We encourage all of our clients to meet with counsel with understanding of the New York law and it’s details to make the decision that is best for them.

If the client has no objections, we’re recommending that our clients incorporate language suggested by Deb Carney  on ABestWeb to add this language or something similar to their affiliate agreements:

If Affiliate is based in New York State or has office(s) located within
New York State, Merchant will only allow Affiliate to promote Merchant
brand(s) and/or web site(s) via Affiliate’s web site. Affiliate may not
promote Merchant through any other marketing channel, that targets NYS
residents, including, but not limited to: paid search marketing, e-mail
marketing, offline marketing, (including flyers and physical
newsletters), lead generation, mobile marketing or telemarketing.

New York State affiliates CAN use these methods to market their *own
website*, as long as the ad copy, email, etc does NOT mention the
Merchant directly.

We feel that the affiliates from the State of New York really are pawns in this game and we stand by them and their right to earn a living through affiliate marketing.  Unfortunately, this language may put a crimp in some of their efforts for a time, but we’d rather change the way that we work together a bit than have to lose them altogether.   We’re adding this language to the Agreement’s of our clients C28 and Geoff and Drew’s Cookies, as well as any other retail merchants we work with until this issue is clarified.

Happy Selling!

Wade Tonkin

Karen and I had the chance to chat with Brian Littleton of Shareasale on a few topics. Most importantly, we spent some time chatting about the New York Affiliate Tax issues.

Some of the main points:

• Sales totals from New York Affiliates that require merchants to report and pay tax
• Fact that orders need to be shipped to New York addresses to qualify and the challenge this present to affiliate networks
• Some of the steps that Shareasale has taken to familitate merchant compliance without compromising affiliate privacy
• Some good advice from Brian on where to get guidance on this. Merchants should consult with their accountant and someone familiar with New York law if New York affiliates are a substantial piece of the their mix or may be in the future to come up with a sound policy
• We reviewed some of the actions that we’ve been seeing merchants take due to the law including Overstock and Amazon filing suit.
• Affiliate shock on receiving action notices from merchants making compliance decisions.

We also chatted a bit on what is happening at Shareasale (technical innovation) and chatted about Brian’s tendancy to end up at a piano at industry events and availability of piano bars near the Affiliate Summit hotel.

Enjoy!