SALT LAKE CITY, Feb. 22, 2016 /PRNewswire-iReach/ — An online sales tax bill (SB110) has recently passed committee in the Utah Senate and is expected to go to vote shortly. The Utah Affiliate Alliance opposes this bill and others like it based on the fact that it is illegal and would threaten the livelihood of thousands of affiliate marketers, including bloggers.
According to the Performance Marketing Association, a non profit trade group who represents the affiliate and performance marketing industry, Utah is home to over 10,000 affiliate marketers who promote online retailers for income.
Senator Bramble, the bill’s author, claims that this bill will not affect affiliates, but the Legislative Review Note in the bill suggests otherwise. It states that the “economic nexus” portion of the bill will likely be struck down, which leaves the “affiliate nexus” portion of the bill intact. The Legislative Note also states that the purpose of this bill is to challenge Quill, but that this bill is very likely to never make it to the Supreme Court. Rather, they are likely to act on one of the multiple bills already headed to the Supreme Court.
Proponents of the bill also suggest that passing this bill is necessary to help local save brick-and-mortar stores. Numerous studies from companies such as Google to Deloitte, however, have shown that the lack of sales tax is NOT a major or significant reason people shop online. In fact, 80% of in-store purchase are influenced by digital media. Website and blogs actually drive people to local brick-and-mortar stores.
“If affiliate marketers help local brick-and-mortar stores, why is the state risking our livelihoods with this bill?,” asks Natalie Martins, blogger and member of Utah Affiliate Alliance.
Rather than collect sales tax in behalf of the state of Utah, most retailers either cannot afford or do not want the burden no matter what the monetary limits set. They will simply terminate all affiliates who live in Utah. Overnight, bloggers and affiliates who depend on income from sales referred from their websites will disappear, as well as future opportunities.
Affiliates do not collect any money or taxes they simply refer people to websites and get paid if there’s a sale (usually within a set timeframe).
Here’s an example of how affiliate marketing works:
A blogger writes a blog post about preserving family memories.
She mentions and links to a photo book she made with Mixbook, an online retailer that sells photo books.
As an affiliate of Mixbook she uses a unique link which tracks clicks and sales.
If her reader goes to Mixbook’s website and buys something, Mixbook pays the blogger a small commission (usually around 10%). So if the product is $30, the blogger makes $3.
If this law passed, online retailers like Mixbook would likely email all bloggers and affiliates residing in Utah and terminate the relationship.
Governor Herbert has cited a $200 million figure sales tax windfall that the state could recover if an online sales tax bill passed. According to recent calculations, this figure is way overblown. See http://www.sltrib.com/opinion/4802642-155/op-ed-we-now-collect-enough-internet?fullpage=1 for a full explanation.
Herbert recently issued an executive order “to direct that all state rules and regulations must not pose undue burdens on the economy, individuals, public and private organizations or local governments.” This bill would pose undue burdens on smaller online retailers, bloggers and affiliates.
For more information about affiliate marketers, as well as to see real termination notices, see the Utah Affiliate Alliance webpage, www.notaxnexus.com Find a full list of our positions/resources here: www.notaxnexus.com/arguments-against-the-proposed-2017-nexus-bills
Media Contact: Chad Waite, Utah Affiliate Alliance, 801-678-3624, cwaite@avantlink.com
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SOURCE Utah Affiliate Alliance