New Mexico Looks Towards Internet (Affiliate) Tax

Posted onLeave a commentCategoriesAffiliate / Advertising Tax, Affiliate Program Management, Online Marketing, Thoughts for Affiliates

Melanie Seery of Affiliate Advocacy has tweeted:

New Mexico affiliate tax

New Mexico has introduced its 2010 House Bill 50 (second edition) “clarifying nexus in regard to certain Internet sales.” The nexus definition/basis is very similar to those in the other states affected by the tax, namely:

“A person with a business with no physical presence in New Mexico is presumed to be engaging in business in New Mexico and has nexus with the state for purposes of due process and interstate commerce if:

(1) that person 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, whether by link or an internet website or otherwise, to that person; and

(2) the cumulative gross receipts from sales by that person to customers in the state who are referred to that person by all residents with an agreement described in this subsection are in excess of ten thousand dollars ($10,000) during the preceding twelve-month period ending on June 30 of any year.”

More in Melanie’s New Mexico Introduces Internet Tax Bill post.

The state of New Mexico has a $995 million budget shortfall this year, and as mentioned elsewhere, the move towards the Internet sales tax should have been expected (as really in any other state that hasn’t considered it yet).

If the legislation is passed, multiple small businesses that rely on the affiliate channel for income may be at considerable risk (especially if Amazon and react to this the same way they did in California). I am tweeting a link to this post to @GovRichardson, and encourage New Mexico-based affiliate marketers to voice out their concern by contacting their state representatives as well.

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