Breaking News: CA Work Around for Affiliate Tax Established!

Big news coming out from the Performance Marketing Association (PMA) this week – Merchants may be able to continue partnerships with California Affiliates!

The PMA announced in a Legislative Bulletin this week that they have successfully negotiated a workaround with the California Board of Equalization (BOE) to allow out of state retailers the ability to continue to work with California affiliates (publishers) with out creating a nexus so long as the parties involved abide by the newly established compliance process.

The Board of Equalization (BOE) whose mission is to “to serve the public through fair, effective, and efficient tax administration” and is the agency overseeing the Affiliate Nexus Tax law, has made an amendment to Regulation 1684. This amendment includes language that affiliate marketing relationships are allowed to remain in-tact so long as the affiliate (publisher) agrees not to “engage in certain marketing practices that the BOE deems as ‘solicitation’ activities directly targeted to California consumers”.

The full legislative bulletin including definitions for what advertising will be deemed allowed and what is considered solicitation is available from the PMA at: http://performancemarketingassociation.com/california-update-work-around-process-for-affiliate-nexus-tax

The BOE is expected to have the full compliance process published on September 5, 2012 and the amendment is expected to be operated on September 15. View Regulation 1684 in full on the BOE website at: http://www.boe.ca.gov/lawguides/business/current/btlg/vol1/sutr/1684.html

We strongly encourage every merchant and affiliate to consult with their tax and legal consul to determine how this work around may or may not directly effect your business.