Is the NY State Affiliate Tax That Big of Deal?

There has been much hand wringing in the world of affiliate marketing over the so-called New York state “affiliate tax.” However, as Trust points out on ABW, it doesn’t seem that 99% of merchants running affiliate programs care much…

How Are Merchants Finding Out About This? – ABestWeb Affiliate Marketing Forum: “Looking at this list and I only see about 40 merchants (so far) which is maybe at most 1% – 2% of merchants with affiliate programs who have dropped NY affiliates. So was wondering if we have a whole bunch more coming and if all the merchants know about this or what. Or if it’s going to be an overall small percentage that drop affiliates.”

Is that a symptom of poor communication by New York state legal authorities, legal counsels, affiliates…or is this really not that big of deal?

There have been a plethora (literally) of blog posts in the affiliate-blog-osphere about the issue ranging from Shawn Collins and Linda Buquet‘s respective reporting to ReveNews coverage to Peter Bordes at Relevantly Speaking chiming in to our discussions on GeekCast to even networks like ShareASale offering strong and well thought-out advice for merchants.

However, merchants really don’t seem to be paying too much attention to all of this.

Once again, I defer to Trust on ABW:

I guess I was expecting a whole slew of new drop notices today, haven’t seen anybody post anything new. In the end if it winds up only being about 1% – 2% then that’s really not much at all. I guess we’ll have to wait to see how this turns out but at this point not as bad as I thought it would be. Time will tell.

Is this just the latest Froogle?

I’m not so sure. I do think there is a considerable need for affiliate marketers to educate and inform merchants about the viability and importance of the performance channel in terms of their bottom line, but “affiliate marketing” as we know it is SO wide ranging and dispersed at this point that it would take Microsoft creating their own loyalty program to get us to organize… oh, wait.

In other words, our conception of “affiliate marketing” (in my opinion) is rapidly evolving away from just the network/affiliate model that has served us well (and badly) for the last decade. “We” are moving into video, lead gen, offline, mobile, widgets, social media, search and all sorts of places that we didn’t envision a decade ago. I would venture to say that at least 75% of the people doing affiliate marketing don’t even know they are doing affiliate marketing.

I’m not arguing for a name change or anything of that nature. However, I do want us to realize that while the NY affiliate tax has certainly caused its share of fear and loathing, we need to realize that this industry has fractured and continues to move away from anything resembling an industry. Coming up with an organized group to represent its needs and views may be as difficult as getting merchants to address the NY state issue.

So here’s my take: Merchants are letting legal figure this out (if they even need to). We should be proactive but realize that interstate commerce is a very complicated subject and requires highly skilled lawyers (and such) to grok. I doubt if NY state’s tax will survive the appeal process based on my understanding of what’s happening, but I’m no lawyer.

In the meantime, it looks to be business as usual.

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