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:
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.
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!