Commission Junction & Proposed New Law
Warriors,
You may have just received a notice from CJ about pending bills in California that would require the collection of sales taxes - as has been done in New York.
This is NOT merely about merchants banning CA affiliates as they have banned NY affiliates.
As the draft laws are currently considered, since CJ is headquartered in California, EVERY merchant using CJ would be required to collect sales tax for CA sales.
California's proposed law broadly includes any agreement for a commission or "any consideration" which "directly or indirectly" refers potential customers to the merchant.
Obviously, that includes CJ's merchant agreement, irrespective of whether individual affiliates are based in California.
In order words, consider this scenario:
A merchant based in Florida utilizes CJ. An Oregon affiliate is also signed up with CJ. If the Oregon affiliate refers customers to the Florida merchant, and the customers are located in California, then the Florida merchant owes sales tax in California.
The Florida merchant avoids this administrative hassle and expense by moving their program from CJ to Pepperjam.
CJ is probably not the only significantly impacted affiliate network. Google may also be affected due to its Google Affiliate Network.
Takeaways to keep in mind:
1. Everyone worldwide needs to be contacting California legislators to try and stop this.
2. If a merchant contacts you about your California status, as a prelude to a NY type ban, tell them this affects CJ as a whole, not just CA affiliates. Point them to this post.
3. Consider getting a new address outside of CA, NY, or any other impacted state. (No legal advice on this one, others can talk about this.)
4. The future may be sales taxes online. Some California Democrats, working with like-minded politicians in other states, have all but made it clear they want to force this as a means of forcing all online retailers to collect sales tax nationwide. At some point, merchants cannot simply ban everyone located in big states as it's too big a percentage of the affiliate market. This is big money for many states, and if you've been following the news you know the CA budget is in shambles.
You may have just received a notice from CJ about pending bills in California that would require the collection of sales taxes - as has been done in New York.
This is NOT merely about merchants banning CA affiliates as they have banned NY affiliates.
As the draft laws are currently considered, since CJ is headquartered in California, EVERY merchant using CJ would be required to collect sales tax for CA sales.
California's proposed law broadly includes any agreement for a commission or "any consideration" which "directly or indirectly" refers potential customers to the merchant.
Obviously, that includes CJ's merchant agreement, irrespective of whether individual affiliates are based in California.
In order words, consider this scenario:
A merchant based in Florida utilizes CJ. An Oregon affiliate is also signed up with CJ. If the Oregon affiliate refers customers to the Florida merchant, and the customers are located in California, then the Florida merchant owes sales tax in California.
The Florida merchant avoids this administrative hassle and expense by moving their program from CJ to Pepperjam.
CJ is probably not the only significantly impacted affiliate network. Google may also be affected due to its Google Affiliate Network.
Takeaways to keep in mind:
1. Everyone worldwide needs to be contacting California legislators to try and stop this.
2. If a merchant contacts you about your California status, as a prelude to a NY type ban, tell them this affects CJ as a whole, not just CA affiliates. Point them to this post.
3. Consider getting a new address outside of CA, NY, or any other impacted state. (No legal advice on this one, others can talk about this.)
4. The future may be sales taxes online. Some California Democrats, working with like-minded politicians in other states, have all but made it clear they want to force this as a means of forcing all online retailers to collect sales tax nationwide. At some point, merchants cannot simply ban everyone located in big states as it's too big a percentage of the affiliate market. This is big money for many states, and if you've been following the news you know the CA budget is in shambles.
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Tom B Banned-
Thanks
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Sean Donahoe -
Thanks
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