Last Updated on June 3, 2008
AvantLink has a post on their blog addressing the now effective (as of June 1) New York state “affiliate tax.”
While most of the post does a good job of laying out the issue with practical examples, this part at the end of the post caught me by surprise:
New York Sales Tax, Merchants and their Affiliate Programs · AvantLink’s Affiliate Marketing Blog: “To prevent falling into the scenario of Example 2 we propose adding the following terms to your Merchant program terms:
‘New York State Affiliates may not solicit New York State residents by using flyers, newsletters, telephone calls, e-mails, PPC ads, or any other type of Internet marketing techniques besides web site advertising links.’”
That’s well and good for some affiliates who still just do banners, but I’d argue that many (if not most) affiliates doing more than $50 a month now utilize some sort of PPC or email component as a part of their campaigns or traffic generation. To amend merchant terms saying that affiliates can only use banners seems more than heavy handed and follows the same draconian logic as employed in the actual NY state law.
If you look at the “Top 10 Affiliate Programs” from last month, at least 7 (probably 9) of them rely (some heavily) on PPC and email. To lop off those channels of traffic generation within a network doesn’t solve the NY problem.
Affiliate marketing has become a much larger umbrella than just banner ad placements on static html websites. In addressing this issue, we need to make sure we’re letting both merchants and NY state know that.
What am I missing here?
[Update] Gary from AvantLink adds this in the comments on their blog post:
4Gary M on Jun 3, 2008 at 6:30 am:
Our recommendation does not disallow email marketing and PPC altogether. Rather, email and PPC targeted at New York residents.
While that’s a good point and clarification of the suggested terms, I still don’t think it’s a fix for many/most affiliates doing business in NY state or with their residents. Geo-targeting is an expensive proposition and this seems to be putting yet more responsibility on the affiliate and further alleviating the merchant from responsibility or diligence.