As New York lawmakers hash out the state's budget, one contentious issue may have a dramatic impact beyond the Empire State: A provision requiring many online retailers to collect sales tax on state residents' purchases.Technorati Tags: e-commerce, affiliate, amazon
The provision, now facing a coming vote as part of state legislators' 11th-hour efforts to pass a state budget, could require e-tailers to collect taxes even if they have no employees or offices within the state.
If signed into law with the budget, the so-called "Amazon tax" would apply to merchants offering commissions in exchange for customer referrals, a practice known among Internet retailers as an affiliate program.
Many online retailers, such as Amazon, Barnes & Noble and Buy.com, have programs that allow individuals or organizations to include a link to the e-commerce site on their own Web page. The affiliate receives a commission for sales generated through the referral.