Affiliate Tax To Be US Wide In Months?
As an industry if you think New York is a one off you are kidding yourself because of the pressure of States to find revenue sources. This type of taxation shall be considered by some State legislatures
Bennett Kelley,
Internet Law Center.
Affiliates who gathered at Affiliate Summit missed a very important session held by Bennett Kelley of the Internet Law Center who is arguably one of the top ten qualified attorneys in Internet Law and the highly influential Wright Andrews From Within divx of Butera and Andrews. I was privileged to speak to Wright and Bennett privately after their session at which only SIX delegates could be bothered to attend in a room which could accommodate over two hundred.
At the time that a decision on the New York Affiliate Tax was being concluded in the courts it was already apparent that the US affiliate industry had done nothing to prepare for the outcome and that delegates who could have already prepared preferred to leave things to others. Amazon and Overstock had their day in Court and lost and it is an absolute disgrace that there has been nothing but bickering within the industry on who is to represent the industry and how to recognise this is not just a New York issue or even just a United States issue but in fact an International issue…. and I am going to tell you why and how.
Killer Pad movie full For this is the timetable for what shall happen next.
Right now across the US there are hearings to determine the formation of committees on States legislatures. This should be completed by the end of January.
I spoke at length to Bennett Kelley who gave this stark analysis.
He said and I quote “I am sure that every State in the country is looking at revenue that they haven’t tapped before … Local and State finances are in the condition they are at right now because of a reduction in Federal revenue and State revenue; a reduction in State sales tax; a reduction in State or Local property tax; a stock market collapse and the Federal Government has encouraged State Legislatures to seek alternative funding”.
So what will this actually mean for retailers and affiliates across the USA and possibly beyond?
Well I put this to Bennett who incidentally first spoke at Affiliate Summit three years ago when he was the Assistant General Counsel and Director of Governmental Affairs and Privacy to ValueClick. He advised me that once the committees are formed then it will given the dire condition of some States finances and given the disapproval of voters to face increasing taxes (California being a supreme example with a virulent anti-tax lobby) that State Legislatures would look at any form of taxation which would not directly affect voters in their States. An Affiliate Tax fits the bill perfectly. How long until we see some more States introducing the Affiliate Tax? How about straight away.
Yes. Straight away. In fact, once the committees are all sworn in and start looking at their budgets we could conceivably see the first budgetary proposals by March.
So what are you the industry going to do about this? Well if your presence at the earth shattering announcements taking place during Affiliate Summit West are anything to go by then I don’t think you’re going to do a lot except roll over.
There is one way…..just one way to limit the damage now and I am grateful to both Wright and Bennett for clearly demonstrating how. Both during their session at Affiliate Summit West and after we met during private discussions. Let me tell you why we had this discussion and what was proposed.
I used to be a senior Union guy working with the Trades Union Congress (TUC) in London for a rail trades union. My background is economics and labor law. Now at present there exists specific international treaty on international taxation. Which is why thus far the impact on non US companies has been fairly limited. However just as Federal Government had to respond to individual State legislation in over 40 States which resulted in the Federal Can Spam Act 2003, so Federal Government shall have to respond again in order to rectify treaty imbalances when individual States extend their funding to include more Affiliate Tax proposals elsewhere. This would result in a Federal Act setting out taxation principals on Affiliate Taxation. That’s why I got interested. The ramifications could become international.
So how do you successfully fight against these proposals? Well work together for a start and raise money. Lots of it. Quickly because you have collectively wasted a year when you should have been preparing for the fight ahead….and it shall be a mammoth battle to prevent what is already looking more and more like inevitability.
You need to have representation as an industry. Not just of affiliates but everyone and you need to raise money quick so you can lobby and lobby hard. Now what is a lobbying? Lobbying is business by other means. You need as an organization a permanent Washington presence. You should have professionals in place to analyse the impact of every proposed bill. You need to educate the States committees and Congress itself. So that when you enact your right to present your case to Congress you are prepared to give brief presentations with just two or three concise items as bullet points then provide full details to a staffer.
You will need to attend meetings on the Hill. You’ll need to be able to work out compromises with other lobbyists. After all, if you don’t get taxed someone else will and you can be damn sure they will be lobbying to oppose any leniency shown to you.
Raise funds…yes cash…NOW!!!!! You need to join committees as an associate to influence further committee members more influential in the pecking order. Simply rely on the courts and well. You saw what happened. Microsoft and AT&T spend a lot of money lobbying. Ever wondered why the Yahoo deal fell through? Lobbying. That’s why. Now AT&T in just five years between 2003 and 2008 spent over $80 million lobbying against what they saw as threats to their business.
So what can an entire industry raise when its the industry that’s threatened?
Without lobbying and presenting your side to committees, the representatives have to act in what they believe is in the best interest. If they are not educated by you how do you expect to influence their decision?
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