Earlier this week Virginia formally introduced legislation that could require out of state merchants to collect and remit sales tax. Senator Emmett Hanger, Jr. has sponsored SB660. It has been referred to the Committee on Finance; the committee normally meets on Tuesdays and Wednesdays ( but may also meet on Thursdays for next several weeks).
SB 660 includes the Virginia Internet sales tax. Although the proposed Virginia Internet sales tax is similar to the Internet sales tax laws in NY, NC and RI, it is important to remember that the interpretation has yet to be determined.
Excerpt from SB660
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2. Solicits or transacts business in this Commonwealth by employees, independent contractors, agents, or other representatives.
A dealer is presumed to be soliciting or transacting business by an independent contractor, agent, or other representative if the dealer enters into an agreement with a resident of the Commonwealth under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link on an Internet site or otherwise, to the dealer if the cumulative gross receipts from sales by the dealer to purchasers in the Commonwealth who are referred to the dealer by all residents with this type of agreement with the dealer are in excess of $10,000 during the preceding four quarterly periods. This presumption may be rebutted by proof that the resident with whom the dealer has an agreement did not engage in any solicitation in the Commonwealth on behalf of the dealer that would satisfy the nexus requirement of the United States Constitution during the four quarterly periods in question;
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As in other states,affiliates are urged to prepare their business model if they have not already done so. Line up replacement merchants for every vulnerable merchant relationship. It is also suggested that you contact your representatives and the members of the Committee on Finance.
Even if the law passes it is important to realize that does not mean the end of your affiliate business. You will just need to adjust; there are always thousands of merchants to choose from.
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Mellie,
Can you give me a call on Friday? I have a thought and question.
Thanks,
Adam