What’s Up in Wisconsin

While panic is not a good reaction, it is probably reasonable for affiliates to be very nervous. Especially if you are living in Wisconsin. Affiliate marketers in Wisconsin are being terminated by merchants. The reason the affiliates are being removed from affiliate programs is due to online sales tax and a new nexus definition. While I will not even attempt to interpret the new nexus definition, I do have an obligation to make sure everyone is informed. Avoiding this development is not good for our industry and it is especially not good for affiliates.

I reported on this last week and we mentioned it during the Affiliate Advocacy Prepare for Nexus call. Today I received emails from more Wisconsin affiliates indicating they had been removed from another program. This brings the estimated total of merchants removing Wisconsin affiliates to at least five.

It is in every affiliates best interest to prepare their business model. That should be your first reaction. Find back up merchants for every single merchant you are associated with. Later today I will post additional information about how to do that.

Merchants should take the time to educate themselves about the new nexus laws in Wisconsin (and elsewhere) before removing affiliates. Consult an accountant or sales and use tax attorney before taking action. Removing affiliates now may not remove the nexus if it has already been established.  This new definition may or may not have anything to do with merchant programs; only a lawyer or certified accountant can answer that. Merchants should not take action before seeking professional advice. Removing affiliates may not be necessary.

The Wisconsin affiliate terminations is due to questionnaires being received and this new additional definition of nexus:

Definition of Nexus – Sales and Use Tax (sec. 77.51(13g)(d), Wis. Stats.)
This provision expands the definition of “retailer engaged in business in this state” to specifically include any person who has an affiliate in Wisconsin, if the person is related to the affiliate and if the affiliate uses facilities or employees in Wisconsin to advertise, promote, or facilitate the establishment of or market for sales of items by the related person to purchasers in Wisconsin or for providing services to the related person’s purchasers in Wisconsin, including accepting returns of purchases or resolving customer complaints.

The new definition continues (link to full text  provided below) but I think it is the above that is sparking the terminations.  What ever the reason, this should concern every affiliate, merchant, network and program manager.

New Sales and Use Tax laws in Wisconsin

Please consult professional advice before taking action to remove affiliates.

Please note: I am only reporting on what is happening – affiliates being terminated and the reason for termination they are given. This is not financial or legal advice; I am not a lawyer, I am not an accountant.

Tagged as: Advertising Tax, Industry Issues, Internet Sales Tax, Internet Tax, Legislative Updates