Maryland's Amazon Tax Bill

As reported by Shawn Collins at AffiliateTip, Maryland has entered the fray as the newest state to present a bill pushing what's known as the Amazon Tax.

From the Fiscal and Policy Note, here's the summary of Maryland Senate Bill SB1071.

Bill Summary: A seller is defined as a person making sales of tangible personal property or a taxable service. For the purpose of a person engaged in the business of an out-of-state vendor, a seller is presumed to have an agent, canvasser, representative, salesman, or solicitor operating in the State for the purpose of selling or taking orders for tangible personal property or a taxable service if (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 web site 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 is greater than $10,000 during the preceding four quarterly periods ending on the last day of February, May, August, and November. The presumption under the bill may be rebutted by proof that the resident with whom the seller has an agreement 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.

If I'm not mistaken, this second paragraph is what many merchants have used to get New York affiliates to sign an agreement that they will not email or directly solicit NY State residents in order to keep them in their affiliate program. I'm not a lawyer, and am not certain that this is the same as what applied in NY, but for more information, see the series of posts by Melanie Seery on this subject.

Also, this Fiscal Analysis is the first I've seen acknowledge that local affiliate publishers and small businesses may be hurt:

Small Business Effect: Small Maryland retailers that are not affiliated with large Internet sellers may realize increased sales if consumers have less incentive to shop online to avoid the State sales tax. Some small businesses could be negatively affected if the change in the law results in Internet sellers altering or terminating affiliate agreements with Maryland retailers.

That's the good news, if you can call it that. The bad news is that this bill appeared suddenly and is being fast tracked through MD legislation, introduced on 3/28 and heard on this past Thursday April 2nd.

It is sponsored by Richard Madaleno, Jr, a member of the Budget and Taxation Committee.

Act Now!

Amazon and Overstock are speaking out against it. According to this article, like in Hawaii, Amazon has declared that they will drop Maryland Affiliates. There are lots of great quotes in that article from both companies.

Maryland Affiliates, you need to act fast to get your voices heard and your faces seen to keep this bill from getting passed. Contact your legislator NOW. Send an email but if you can, pay them a visit., this is in your backyard.

For inspiration, read about what CA affiliates did this past week to make a difference.

Posted on Saturday, April 4, 2009 at 01:38:38 AM in Affiliate Marketing
Tags: amazon tax,  advertisingtax,  tax
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