Referred to as an "Amazon tax" or the "Internet tax", an Affiliate Nexus tax provide local governments, such as Georgia, with additional streams of revenue. Says New York accounting firm Marks Paneth & Shron:
"States are moving to tax online businesses that sell in their territory. The so-called "Amazon Tax" demands that online businesses collect state sales tax if they have affiliates or individuals that are paid a commission based on sales made by the seller in that state.
The presence of such individuals or affiliates creates "click-through nexus," a legally defined level of taxable business activity accessible through the Internet; this in turn triggers a sales tax collection responsibility in many states that are acting to claim tax revenue. Legislators are concerned they are losing revenue to online sellers."
Here in Georgia, House Bill 386 which included this tax, quickly passed and will be soon signed by Governor Nathan Deal. Those not familar with this legislation you can catch up below:
The State of Georgia has just passed a bill which includes what has become known as an "Amazon tax".
Never mind the overall decrease in use tax collected by Illinois, Georgia and Utah become the latest states blinded by affiliate nexus dollar signs. Late last week, State of Georgia House Bill 386, their compressive tax bill, …
1,000 out of 100,000 Internet merchants will be covered under this law change and many of those will fire their GA based affiliates and still NOT have to collect GA sales tax. So brick & mortar stores in GA will still have the …
A massive tax plan that would affect nearly every Georgian cruised through the sate House on Tuesday, 30 hours after it was introduced. Republicans and Democrats strongly supported House Bill 386, saying it would bring Georgia new jobs, project the ones already here and give families tax breaks. It passed 155-9.
Other states including Illinois, New York, California, and Colorado have passed similar legislation, and business owners – particularly those with online businesses – are eager to give their opinons and perspectives.
Moves by states to collect sales taxes from retailers that use affiliate marketers, which direct Internet traffic to the retailers, are costing marketers heavily.
This has become a hot topic all across the country. If you're an Atlanta business owner, we'd love to hear what you think. Does this impact your particular business?