Update: This blog post has been amended after discussions with several merchants, affiliate networks and yes, our attorneys. The affiliate tax issue is complex and continues to evolve.
Amazon and the Colorado legislature have created quite a stir in the affiliate marketing community recently. Colorado passed a new tax law affecting online commerce and Amazon responded by terminating its affiliate relationship with all Colorado affiliates. You can find more information here. Also available is copy of the letter from Amazon to its Colorado affiliates. This is a broad debate with larger implications for online retailers, but the the real hardship is borne by the Colorado affiliates. Other laws affecting the taxation of online commerce have passed in New York, North Carolina, and Rhode Island with the similar results — in some cases the dropping of hard working affiliates. Laws have also been considered in California, Connecticut, Hawaii, Maryland, Minnesota, and Tennessee.
VigLink may be able to help. Affiliate marketing is a profession for some, a hobby for others, and an important source of income for many. One of our goals as a company is to improve the status quo in affiliate marketing, and we are working to make affiliate marketing easier and more profitable for publishers while bringing value to the merchants and protecting their ability to manage their brand and make their own business decisions. Contact us for more information info [at] viglink dot com.