As expected, Maryland has joined the Internet sales tax legislation party. Legislation that could require out of state merchants to collect and remit sales tax has been formally introduced in Maryland. If passed, the Maryland Internet Sales tax legislation would take effect on June 1, 2010.
Earlier this week SB824 was introduced. It is sponsored by Senators Madaleno, Conway, Currie, and Kelley and has been referred to the Budget and Taxation Committee.
The legislation for Maryland Internet sales tax is similar to that in other states; setting a $10,000 sales threshold and there would be an ability to rebut the presumption of nexus.
Excerpt from SB824
(1) THE SELLER ENTERS INTO AN AGREEMENT WITH A RESIDENT OF THE STATE UNDER WHICH THE RESIDENT, FOR A COMMISSION OR OTHER CONSIDERATION, DIRECTLY OR INDIRECTLY REFERS POTENTIAL CUSTOMERS TO THE SELLER, WHETHER BY A LINK ON AN INTERNET WEBSITE OR OTHERWISE; AND
(2) THE CUMULATIVE GROSS RECEIPTS FROM SALES BY THE SELLER TO CUSTOMERS IN THE STATE WHO ARE REFERRED TO THE SELLER BY ALL RESIDENTS HAVING AN AGREEMENT WITH THE SELLER AS DESCRIBED IN ITEM (1) OF THIS SUBSECTION IS GREATER THAN $10,000 DURING THE PRECEDING FOUR QUARTERLY PERIODS ENDING ON THE LAST DAY OF FEBRUARY, MAY, AUGUST, AND NOVEMBER.
(C) THE PRESUMPTION UNDER THIS SECTION MAY BE REBUTTED BY PROOF THAT THE RESIDENT WITH WHOM THE SELLER HAS AN AGREEMENT AS DESCRIBED IN SUBSECTION (B)(1) OF THIS SECTION DID NOT ENGAGE IN ANY SOLICITATION IN THE STATE ON BEHALF OF THE SELLER THAT WOULD SATISFY THE NEXUS REQUIREMENT OF THE UNITED STATES CONSTITUTION DURING THE FOUR QUARTERLY PERIODS IN QUESTION.
We will continue to monitor and work on this issue just as we have since the early days of the New York Internet sales tax.
Any affiliate who needs information or assistance is always welcome to contact me. We continue to support every affiliate regardless of size.
Whether or not you are interested in working on the issue, it is critical for every affiliate to prepare to minimize the impact of the legislation. Please contact me for help on how to prepare.
{ 4 comments… read them below or add one }
Time to try and get more of the Mid Atlantic organized….MD and now VA too.
I’m in.
Hi Adam & Rob,
Thanks! I will get in touch with both of you.
I’ve drafted an email that I sent to my state senator (Conway) telling her that this is a terrible idea. I touched on three themes.
First, affiliate advertising provides opportunities to residents of the state to generate income from their online efforts. Second, the state is going to lose income tax revenues and not collect any additional sales tax revenues because affiliate advertisers are going to stop doing business with Maryland residents. Third, given the economic climate – is this a good idea.
I didn’t even get into the constitutional issues – I don’t think that they care and they are all sold on the weak NY State decision anyway.
{ 3 trackbacks }