Coffee Talk #67 – Revealed: Why California’s New Affiliate Nexus Tax Really Sucks

by James Martell on June 30, 2011

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Coffee Talk with Karen Garcia and Jeannine Crooks

James Martell, successful affiliate marketer, President of Net Guides Publishing Inc., successful author and host of the Affiliate Marketers SUPER BootCamp recognizes the growing concern of affiliates across the Unites States as more states pass tax laws like the California Nexus law. As these laws pass major merchants like Amazon.com and Overstock.com drop their affiliates in those states leaving the site owner’s uncertain and weary about their financial future.  James wants everyone to know the nexus law doesn’t have to be the end of your affiliate career.

With the recent passing of the California Nexus Law James joins Karen Garcia, Co-founder of GTO Management and Jeannine Crooks, Affiliate Manager for Buy.at in a frank discussion on exactly what this law means for affiliates, merchants and the online industry as a whole. Karen is up close and personal with many California merchants and affiliates alike and Jeannine walked hand in hand with affiliates in Colorado as they attempted to repeal the tax law and restore confidence in the affiliate industry when it previously hit their state.

Together these three discuss:

  • Exactly what the Nexus Law is
  • How this new tax law affects affiliates and merchants
  • Why it doesn’t work
  • What affiliates can do after they receive the dreaded email
  • How merchants can prepare for and anticipate other states passing the law

The Nexus Law and Affiliates

With California’s recent approval of the Nexus law Karen shares that she has been receiving calls from concerned affiliates who are scared and just plain panicking about their businesses. They don’t know what to expect or if there is even a chance for them to continue online.

Jeannine shares what things were like in Colorado shortly after they passed the same tax law and steps they took to try and repeal the law, succeeding to at least limit the law to eCommerce businesses located in the state.  She shares that even with that Amazon pulled out and many affiliates were left anxious and uncertain.

If you’re an affiliate that has been affected by this you can still succeed online:

  • First, take a step back and breathe. If you’re in a panic mode it won’t do your business any good.
  • Second, start contacting your merchants. Find out if any of them are exempt from this new tax law and how they plan to respond to it. Then do some research to find new merchants to fill the holes with those you lost.
  • Third, rework your product pages. Unfortunately you may need to completely re-write some of your pages but it’s just a reality of the new era online.
  • Visit NexusAware.com to research merchants that may be a good fit for your product line and state.

The Nexus Law and Merchants

Affiliates aren’t the only ones being affected by these tax laws. What many may not realize is merchants are hurting too. These new laws put many of them in a difficult position when it comes to protecting their businesses from tax audits and expensive tax bills they aren’t prepared to pay.

Like affiliates merchants can prepare for the new way of business online:

  • Don’t wait for your state to pass the next tax law. Be proactive an stay ahead of the game.
  • Follow who may be planning to pass similar laws at PerformanceMarketingAssociation.com
  • Put a plan in place and be prepared

One thing is certain, the online industry is really talking about the Nexus laws and what it means for the affiliate world. Merchants, affiliates, networks and associated agencies share a common goal of protecting the affiliate world so that it can continue to prosper as it’s done in years passed.

If you have questions about the Nexus law and are unclear on how to keep your business going listen in as James, Karen and Jeannine get serious about beating Uncle Sam!

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