Overstock Kills Affiliate Programs In 4 States
Overstock.com Inc. informed its marketing affiliates in four states — California, Hawaii, North Carolina and Rhode Island — that it is ending its business with them to avoid collecting sales tax.
Lawmakers in the states have passed or are preparing to pass legislation that would require companies to collect sales tax if they have marketing affiliates in the state. Affiliate marketers run blogs or Web sites and get a sales commission by featuring links to outside e-commerce sites.
Rival Amazon.com Inc. has taken similar steps in the past few days, ending ties with affiliates in three of the same states and warning about California.
The decision highlights mounting tensions between online retailers and cash-strapped states. Other states are considering similar laws that would use affiliates as a way to force companies to collect sales taxes for online purchases.
Chief Executive Patrick Byrne said Overstock plans to sever its affiliate relationships in each state that appears close to passage of similar laws, but will reinstate its businesses if the laws are found unconstitutional, vetoed or repealed.
Forcing e-commerce sites to collect tax upfront would strip a key advantage they have over traditional retailers, though consumers are technically supposed to pay a so-called use tax for online purchases on their own.
Photo by Overstock.
Karen Garcia on July 2nd, 2009 11:00 pm
Actually Overstock has reinstated their affiliates in California as Governor Schwarzenegger vetoed the budget that contained the nexus language on July 1. You can read the full press release from his office here:
http://gtomanagement.com/thank-you-governor-schwarzenegger/
Jaclyn on July 6th, 2009 9:01 am
I think overstock gets too much recognition. I have gone to their website and looked around all over what they have to offer and their prices, and i have to say that they really are not comparable with some other sites that i have been on and ultimately bought from. I haven’t been able to find one thing on overstock that i actually wanted to buy, their prices and inventory is not as great as they make it sound to be.
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