02-14-2011 12:09 PM
In a Barnes & Noble press release issued today, B&N is openly courting former Amazon affiliates who were terminated by Amazon because of state sales tax laws.
An affiliate is basically a Web site that provides links to the main bookseller. Those links contain an affiliate code, and the bookseller pays the affiliate a small commission on each sale made from such links. Info on B&N's affiliate program: http://bn.com/affiliate
Some states are declaring that an affiliate located within the state constitutes a "nexus" for the corporation within the state, and therefore the corporation must collect state sales tax on all sales made in that state, whether through the affiliate or not. So far, Amazon has terminated its affiliates in Colorado, North Carolina, Rhode Island, and now Texas. California and Hawaii tried to enact similar laws in 2009 (AB178 and HB1405, respectively), but both were vetoed by the state Governors.
Amazon currently collects sales tax only for sales to Kansas, Kentucky, New York, North Dakota, and Washington. Barnes & Noble, on the other hand, has a physical presence in just about every state, so it's already collecting sales taxes. Therefore, the affiliates would not change B&N's tax situation.
02-14-2011 05:38 PM
Good to see them being aggressive. With Borders dying, B&N is the only horse to bet on for those who value physical bookstores.
02-14-2011 09:34 PM
Amazon closed a distribution center in Texas--it has not discontinued affliates. I think Texas was trying to collect taxes based on the distribution center, not on affiliates (that may be next, but there is some argument over what constitutes a "storefront" in Texas versus a "presence.")
03-11-2011 02:28 PM
Amazon cut off its affiliates in Illinois yesterday, as a new state law went into effect requiring Amazon to collect Illinois sales tax if they have any affiliates in Illinois.