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Nexus Laws And The Reprocussions
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Nexus Laws And the Reprocussions

Recently, there has been a lot of talk about Amazon and affiliates and TAXES! Don’t get me wrong, these laws are disturbing, however, further investigation into the Federal Law that formed the NEXUS laws show something entirely different.

Five years ago I was an Amazon affiliate, within one dollar of getting my $100.00 commission when my state started with the NEXUS laws. Now, with so much going on with affiliates and the NEXUS laws, I have decided to search the State Revenue Law. Note that these laws continue to stay on the states books even though the laws are several years old.. Also please be aware that the limits exposed here are for North Carolina only. The way the tax base has been calculated changes from state to state. Also I have found NO reason to form .a Limited Liability Company. This action may help with federal income and state income taxes, however if you are an affiliate of any company in any NEXUS state...you will pay sales tax.This is Federal Law.

In my search for the correct answer, I think that I may have found the saving grace in the NEXUS laws. This is what I have discovered:

1) The nature of these laws is to prevent the loss of revenue by a state. At present, only 13 states have enacted the NEXUS laws. North Carolina joins a list which totals 13. The rest of the states are: New York, Rhode Island, Illinois, Arizona, Connecticut, Vermont, California, Pennsylvania, Georgia, Minnesota, Maine, and Montana. Most of these states still have affiliate arrangements but because of still pending suits with Amazon and the "Amazon conglomerate", Amazon has terminated all relations with Arkansas, Colorado, Illinois, Minnesota, Missouri, North Carolina, and Rhode Island.

2) NEXUS laws do give affiliates in all states room to make money, all states do have a ceiling at which the observed four quarter base is. This ranges from $2000.00 in Connecticut, to $5000.00 in Rhode Island, to a whopping $50,000 in Georgia. All of the rest set the 4 quarter limit at $10,000.00. California estimates that full compliance with the law would net an additional $317 million of sales tax for FY 2012-2013. However this turned into a mote point as Amazon and then Overstock discontinued all affiliate operations with California.

By looking at the complete record of who, what, when, where and why; I have come to the conclusion that the states in question do have a right to their sales tax, and it places an unfair burden on those that try to make money by sponsoring a company, however if the affiliate Sells Ad space to a company that is out of state; that is different. The regulations bypass that option, and it may be an option that should be available.

It is very clear that money still can be made with Amazon unless you live in one of the United States places where Amazon has discontinued affiliate operations. Please be aware that affiliate operations are not affected from other companies and affiliate operations can still be done. The above limits are Federally imposed.


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