Connecticut Moves One Step Closer to Advertising Tax

Posted on2 CommentsCategoriesAffiliate / Advertising Tax

Connecticut state sealYesterday (March 25, 2010) the Joint Finance Committee of the state of Connecticut has passed its version of the Internet sales tax bill (HB 5481) or the “act concerning the collection and remittance of the sales tax by remote sellers” (italics mine). There were 35 votes “for” versus only 13 “against”. Bill HB 5481 specifies “that sales tax is due when an online retailer uses an in-state affiliate to sell its products” (italics mine / full text here).

What next?

Melanie Seery of Affiliate Advocacy clarifies:

The next step is a final recheck of the bill (which should be quick as it is a repeat of last years bill) and it will then be assigned a calendar number. Once it has a calendar number it will go to the floors for full vote. The Finance Committee is a Joint Committee meaning it has members from both houses. Support for the bill existed among both Senators and Representatives.

Affiliates should continue to prepare for bill passing to minimize the impact. Identify replacements for any vulnerable merchants. A few merchants have gone on record as likely to terminate but there are solutions.

Termination of affiliates is never a good option. As noted elsewhere, a number of online merchants (e.g.: ToysRUs) have been collecting sales tax from Internet customers for quite some time already, and end-customers don’t mind. Both online merchants and CT-based affiliates should be on the alert, and prepared to adjust their business strategies depending on the way the situation develops further.

Read more about Bill No. 5481, and the Connecticut state legislative process here, and again the full text of this bill may be found here.

2 thoughts on “Connecticut Moves One Step Closer to Advertising Tax

  1. Has anyone read the article from http://affiliateadvocacy.com/2010/connecticut-finance-committee-passes-internet-sales-tax/#comments dated March 25, 2010.

    From this article there seems to be a solution – a paragraph taken from this article reads like this:

    “Merchants should also begin to examine the option of collecting sales tax. Research and identify solutions such as those offered by Avalara which provides sales tax automation software and services for businesses.” Check out http://avalara.com/

    Taken from Avalara’s Website – “transactional tax solutions can be integrated into your accounting, e-commerce, point-of-sale or other custom-built or third party package in just minutes, and are fully enabled with the nexus, taxability, reporting and filing profiles unique to your business. Simplifying the end-to-end sales tax management processes, Avalara has the perfect solution for you.”

    If anyone knows people who are fighting this Affiliate Tax in any state please pass the above information to Affiliate Networks, Affiliate Managers, etc.

    This could be the solution we are all looking for in saving our businesses

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