Missouri Looks in the Direction of Advertising Tax

Posted on1 CommentCategoriesAffiliate / Advertising Tax, Affiliate Program Management, Online Marketing

Seal of the State of Missouri A fellow affiliate marketer and affiliate program manager, Matt Enders (on Twitter: @mattenders), broke the news yesterday: Missouri is joining the crowd of states which are considering what I like to call selective advertising tax.

A North Carolina-based e-tailer, friend of Enders, “received a letter in the mail from the State of Missouri questioning him specifically about his affiliate program as it pertains to Missouri residents”. Here is excerpt from it:

Thank you for the completed Missouri Business Activity Questionnaire… In order for the Missouri Department of Revenue to make a determination on taxability to Missouri, additional information is required.

The Questionnaire states “for the purpose of this questionnaire, representatives shall include employees, agents, independent contractors, brokers or others that reside in, or regularly and systematically enter into this state on your behalf.” This would include any person or entity participating in your Affiliate Program.

Do you pay either directly or through a common pay master any person or entity which participates in your affiliate program in Missouri? [full text here]

Déjà vu all over again: they equate affiliates to “representatives” that “regularly and systematically enter into this state on [the merchant’s] behalf” just as “employees, agents, independent contractors [and] brokers”. Reminds me of the differences between traditional business meaning of the term “affiliate” and how it’s used in affiliate marketing and online advertising contexts. Just as New York, North Carolina, Rhode Island (and other states looking in this direction), the state of Missouri is expanding the definition of affiliate marketing to single affiliates out of all other types of online marketing (note: CPM advertising is deemed as one entirely different from CPA advertising, even though both yield the same results — sales to state residents).

Time for Missouri affiliate marketers to start contacting their senators and representatives [look up your MO legislator here]. The positive outcomes of the same fight in Maryland, Minnesota, California and Hawaii should encourage us to press on. I’m starting hashtags #MOAdvertisingTax and #MOAffiliateTax on Twitter.

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