State-level sales tax nexus laws pose a significant threat to affiliate marketing programs and can inadvertently harm ecommerce businesses. These laws, attempting to broaden the definition of nexus to include in-state affiliates, often lead to merchants ceasing partnerships with affiliates in those states, shifting economic activity rather than generating new tax revenue. Ecommerce operators need to understand the implications of these evolving regulations on their affiliate strategies and potential business operations.
Key takeaways
Be aware that affiliate nexus laws primarily shift economic activity and jobs to states without such laws, rather than shrinking the overall affiliate marketing pie. Your affiliate strategy should account for this geographical shift.
Understand that while some states have minimum thresholds for these laws (e.g., $100,000 in sales), the details are in flux and can vary, particularly for smaller merchants. Stay informed about the specific regulations in states where you operate or have affiliates.
Recognize that these laws have not demonstrably increased state tax revenues and may instead drive down revenue by causing businesses to leave. This insight can be valuable in discussions with policymakers.
Explore affiliate marketing management platforms like VigLink to streamline publisher recruitment and management, especially if your in-house affiliate program is struggling to scale or comply with complex regulations.
If your business relies on an affiliate program, ensure that platforms like VigLink are enabled as publishers within your existing affiliate networks to broaden your reach to more publishers.
Themes
affiliate marketingbusiness strategyecommerce law & regulationtaxation
The efforts by state governments to collect online sales taxes is impacting affiliate marketers. That’s because a group of states is attempting to expand the nexus definition to include affiliates in those states, and thereby force retailers with those affiliates to pay sales taxes. Our guest is an affiliate marketer, and he’s here to discuss how all of this is impacting his business. He’s Oliver Roup, founder and CEO of VigLink, an affiliate marketing management company. He speaks with Pract...
Frequently asked about this episode
What does this episode say about affiliate marketing?
Be aware that affiliate nexus laws primarily shift economic activity and jobs to states without such laws, rather than shrinking the overall affiliate marketing pie. Your affiliate strategy should account for this geographical shift.
What does this episode say about business strategy?
Understand that while some states have minimum thresholds for these laws (e.g., $100,000 in sales), the details are in flux and can vary, particularly for smaller merchants. Stay informed about the specific regulations in states where you operate or have affiliates.
What does this episode say about ecommerce law & regulation?
Recognize that these laws have not demonstrably increased state tax revenues and may instead drive down revenue by causing businesses to leave. This insight can be valuable in discussions with policymakers.
What does this episode say about taxation?
Explore affiliate marketing management platforms like VigLink to streamline publisher recruitment and management, especially if your in-house affiliate program is struggling to scale or comply with complex regulations.
What does this episode say about affiliate marketing?
If your business relies on an affiliate program, ensure that platforms like VigLink are enabled as publishers within your existing affiliate networks to broaden your reach to more publishers.
