Yesterday afternoon the Executive Director of the Performance Marketing Association (PMA), Rebecca Madigan, has emailed out an important “PMA Alert.” Right at the outset of it she got to the key point, writing:
In a dramatic move, Amazon and Overstock have filed an application to petition the US Supreme Court to hear their case against the state of New York, challenging its affiliate nexus tax law. Amazon and Overstock lost their appeal in New York courts after a prolonged 4+ year legal battle.
This move likely indicates Amazon and Overstock have lost faith in the chances of the Marketplace Fairness Act (MFA), the federal legislation recently passed by the Senate, but stuck in the House. Much like last year, the MFA has fallen victim to partisan politics causing deadlock across the board, and which now seems unlikely to change in the foreseeable future.
Back in March of this year Overstock’s acting CEO Jonathan Johnson confirmed that they were “very likely file to have it heard by the U.S. Supreme Court since there are other states that on almost the same law have ruled the opposite way” [source | list of the “other states” referred to] and so they have moved forward.
Many have hoped that the Marketplace Fairness Act is the (federal) solution to the affiliate nexus tax problem. However, with the MFA “struck in the House,” this Supreme Court appeal is, actually, no less important. As Madigan points out later in the text of the above-quoted mailer “a victory in the US Supreme Court would declare affiliate nexus tax laws illegal and likely unconstitutional.”
An appeal is the Supreme Court is a lengthy process, but, as always, I will keep my finger on the pulse of the situation, and keep you posted on the progress.