1. Viator products are not subject to sales tax so they are unaffected. They already cleared this with their legal team.

2. Imagekind has no need or no plans to remove NYS affiliates.

3. PC Micro Store is also not in a position to need to remove NYS affiliates at this time either. They are very committed to making their affiliate program grow, so doing anything that would make it shrink is not in their plan.

4. Loxly Gallery will not now or in the future remove any affiliate based on location and legislation.

5. New clients TBA are also committed to their future affiliates and will not remove or restrict based on location.

6. All clients (that need to) have added the following to their Affiliate Terms and Conditions:

“New York State Affiliates clause:

If Affiliate is based in New York State or has office(s) located within New York State, Merchant will only allow Affiliate to promote Merchant brand(s) and/or web site(s) via Affiliate’s web site. Affiliate may not promote Merchant through any other marketing channel, that targets NYS residents, including, but not limited to: paid search marketing, e-mail marketing, offline marketing, (including flyers and physical newsletters), lead generation, mobile marketing or telemarketing.

New York State affiliates CAN use these methods to market their *own website*, as long as the ad copy, email, etc does NOT mention the Merchant directly.”

Any consulting clients Team Loxly gets will be fully informed and will be strongly encouraged to weigh all sides and see the benefits of remaining committed to affiliates if they want the affiliate channel to grow and be strong. If they are required to collect sales tax they will, if they don’t have the affiliate activity to consitute nexus in NYS we will work with them and our NYS affiliates to be sure that nexus isn’t established, or that when it is, the merchant will comply.

It is important to establish guidelines now, as more states will likely follow and we can’t allow state tax laws to regulate our industry. Using affiliate activity to establish nexus in any state is wrong, if internet sales are to be taxed, then all internet sales should be taxed and not put the burden of collecting on merchants that have affiliate programs. There are over 7000 individual tax districts in the United States and small to mid sized merchants do not have the accounting staffs to be able to manage collecting and reporting to that many states and agencies.

It is the states that many years ago set their laws to be specific to companies that have nexus in their states, redefining that now is most likely unconstitutional and hopefully Amazon and other companies that have stood up to file suit will be able to prove that.