In a stunning move today, CafePress abruptly announced that it would be terminating New York affiliates effective July 1, 2008.
The problem stems from newly enacted legislation in New York that requires companies who have affiliates that reside in New York to collect taxes if their revenue passes a certain threshold. A memo from the New York State Department of Taxation and Finance, Office of Tax Policy Analysis, Taxpayer Guidance Division that addresses the new legislation can be viewed here:
The announcement from CafePress is as follows:
As you may know, the State of New York recently enacted new legislation that addresses tax registration, collection and remittance, which challenges the CafePress affiliate business model.
Due to mounting uncertainly over these new laws we will no longer be able to support affiliates residing in the State of New York, effective July 1, 2008.
While CafePress has no tax nexus in any states other than California, Nevada and Kentucky we feel it wise to discontinue our affiliate business in New York State at this time.
Regrettably, our hand was forced into making this difficult business decision, and we openly acknowledge the loss of income this means for our New York affiliate partners. Should circumstances around this law change we will eagerly reconsider this decision.
Effective July 1, 2008 CafePress affiliate agreements with all New York residents will be terminated.
Please let me know if you have any questions.
This is a bitter pill to swallow for the New York based CafePress affiliates. Not only have they been terminated, but the window on that termination is a scant week. For anyone involved in affiliate marketing, you know the tediousness of removing hundreds, if not thousands, of links across the internet.
If you are an affiliate who does not reside in New York, do NOT be complacent. Amazon has challenged the law, but as most court cases go, it will probably be a few years before a verdict is reached about its legalities. This court case will be very interesting to watch….. if Amazon loses and the New York law stands, you can bet your bottom dollar that every state in the nation will follow suit with similar legislation.
If you are a New York affiliate, Haiko de Poel, Jr. from A Best Web fame has set up an area specifically for you to discuss the law’s implications at NY Affiliates.
Another question needs to be answered: what are the other PODs with affiliate programs going to do now? Comply? Cut affiliates from NY? We’d rather know sooner than later!