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The NY Tax Law: As you may be aware, the State of New York implemented a new tax law, effective on June 1, 2008, requiring online retailers to collect sales tax from their New York customers if they engage affiliate marketers in the State of New York. The new law applies to any New York resident who enters into an agreement with an online retailer to “directly or indirectly” refer “potential customers, whether by a link on an internet website or otherwise,” in exchange for a commission or other compensation. As a result, affiliate marketers have become subject to the new tax law, and New York sales tax must be collected by any online retailers that receive customer referrals from affiliate marketers that are based in the State of New York.
NOTICE: The full text of the new tax law is available at http://nystax.gov/pdf/memos/sales/m08_3s.pdf . Channel Intelligence cannot provide legal or tax advice and you should consult a professional regarding your specific tax and legal obligations. The information above is not legal or tax advice, and was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax related penalties under the Internal Revenue Code or applicable state or local tax law provisions or (ii) promoting, marketing or recommending to another party any tax related matters addressed herein.