E-commerce has exploded and has literally transformed the retail landscape over the past 10 years. Many e-commerce sites have grown with the Ebay auction website, Etsy for hand-crafted goods, and the e-commerce giant Amazon and its Amazon Marketplace. Online e-commerce sellers with high gross sales (Based on transaction or review-based estimates) can prove to
The advent of sharing economy B2C services has spawned new B2B services for businesses that have a significant e-commerce operation. For example, Darkstore is a company that offers a mobile app containing shipping and logistics providers in a database. In fact their website advocates “same day service fulfillment” for e-commerce sites. This has obvious implications
21 States have passed or pending Click-Thru or Affiliate Nexus legislation, and 12 states are considering it as of this writing. The phenomenon is known as Click-Thru because it requires an out-of-state retailer to use an in-state marketing affiliate to promote his/her products through their e-commerce site. Once customers have purchased product beyond $10,000 from that out-of-state retailer via the marketing affiliate, that retailer is now required to collect and remit sales tax to the state. Now many state revenue agencies would call this the “Amazon Law” which compels the largest e-commerce retailer in the US to collect sales tax. But there are many other high-grossing e-commerce sites with no retail presence that need to be added to this list as well:
- Etsy (online hand-made arts and crafts site)
- Ebay (online auction / retail site)
- Groupon (Daily deals on products and services in major cities)
- NewEgg (Electronics, computer parts, peripherals)
- SteamPowered (Sells video games direct to consumer)
- Overstock (Brand name surplus and over-produced items)
- 6pm (name brand shoes)
- BhPhotoVideo (photography, consumer electronics)
Many states also have specific language on what constitutes an affiliate solicitation. For example, California requires an explicit “pushed” solicitation resulting in a transaction, such as an email. Other states such as Illinois require merely a promotional coupon from that retailer. Yet other states are unsure what scenarios constitute an affiliate solicitation.
That being said, technology exists that can help automatically harvest as many affiliates as possible in-state. TaxCrawler can make the task of finding these sites very easy. This leads the state agency to merely codify the rules around affiliate nexus, and let TaxCrawler do the digging on the internet.
Here are some examples of Affiliate Nexus that can be extracted.
LTAS Technologies co-presented a topic “1099K and E-commerce Discovery : Not a Slam Dunk!” at the 2014 FTA Technology Conference in Portland, Oregon earlier this month. Minnesota Revenue presented the government perspective on how both open source and 1099K data compliment each other to bring you a complete picture of a taxpayer. LTAS was on