Possibel Solution to Affiliate Tax Nexus Laws
I say "for some" because this particular solution is not all that promising for me, thus far, but it might be for some others of you out there and so I figured I should share the wealth, so to speak.
The site is called NexusAware.com and it is just what it sounds like - a site that helps you be aware of nexus-friendly merchants in your area.
Nexus Tax Laws Simplified
People keep trying to say that the various state Nexus laws are complicated and difficult to understand. This is not really the case if you step back and look at them from a "big-picture" perspective.First, any merchant with a physical presence in a state (ie they have a physical store) is required to collect sales tax when you purchase things in that state from that retailer. This means if I go to Wal-mart and buy a shirt, Wal-Mart has to charge me sales tax. If I go to Wal-Mart.com and buy the same shirt - and Walmart has a store in my state - they still have to charge me sales tax.
Retailers that DO NOT have a physical store in my state, do not have to charge sales tax when selling me that shirt.
The sticky part, however, are the affiliate marketers. The state governments are slowly starting to pass legislation which claims that an affiliate marketer in a state gives the retailer a "physical presence in the state" and thus the retailer has to charge sales tax. To get around this, the affiliate programs are just dropping their affiliates in those states and continuing to not charge tax.
A Possible Solution
What we affiliates need - and what i found this morning - is a list that compiles names of all of the affiliate merchants that either already have a presence in our state or that already collect sales tax on their own.NexusAware.com does this. It allows you to choose your state and then shows either all merchants that already have a presence in your state (which means they already must charge sales tax) or that are somehow "EXEMPT" from the nexus laws - possibly because they already charge sales tax anyway. Either way, this should give people a jumping off point in looking for new affiliate options for their businesses.
As for me, I'm going to have to do things the hard way and try to set up some direct affiliate/drop-ship options with some local retailers.
Recent Comments
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There are at least a couple more options as well. I live in North Carolina so Amazon and a few others will not allow me to be an affiliate. However, I can still sell their products through Squidoo. Squidoo becomes the affiliate for Amazon and they send me half the earnings. Those earnings for a new affiliate would be at a rate about the same as you would earn with Squidoo anyway. There are also other networks you can use. You are not limited to Amazon.
No, I realize I'm not limited to Amazon. I'm limited by what networks I can find that offer products in my area. Unfortunately, I have still only turned up three programs that offer leathercraft supplies - Amazon being the most functional.
I have not heard about the Squidoo route yet - not sure how that one works, but I'll give it a look. I have run across a similar affiliate-by-proxy concept with a company call VigLink, that I am also in process of researching.
Finally, I'm again looking into the possibility of doing some of my own product and just make sure I charge enough that demand balances out what I can supply and I can still turn enough profit to make it worth the time/effort.
Thanks for the ideas.
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Thanks so much for this link. I'm in Illinois and got away from affiliate marketing because of nexus but I'm moving back to it. This is a great help.