Affiliate Programs

Affiliate Programs and the New Tax Laws

Recently, California Gov. Jerry Brown, approved a new law that forces online retailers to collect California sales taxes by expanding the definition of what it means to have a physical presence within the state. Prior to the law, online retailers only had to charge sales tax when they had an actual physical presence such as a warehouse or retail outlet in the state. The new law now recognizes a business as having a physical presence in the state if they have affiliates promoting their products in state. Of course mega online retailers such as Amazon.com and Overstock.com are up in arms and are challenging the decision, but in the meantime they have cut all affiliate ties with their affiliates in California.

So how does this affect you?

Well, if you currently offer an affiliate program and you have affiliates promoting your products within the state of California, then this law essentially means that you are now recognized as having a physical presence in the state. By having a physical presence in the state, you may now be saddled with sales tax responsibilities to that state.

I am certainly not a tax expert, but as an online marketing strategist, I understand the importance of affiliate marketing and what it can mean to your bottom line. When I saw this video article on Jessica Matthews’ “Bite of Brilliance” I knew I needed to pass along the information to my peeps.

If you currently have an affiliate program or are thinking of implementing one, I strongly recommend that you check in with your Accountant or Tax Specialist ASAP to ensure that the terms of your currently affiliate program do not cause you additional tax liabilities.

Become an Affiliate or Referral Partner for Products You Recommend Often

I teach my clients to take advantage of and set up affiliate and referral program with vendors that they recommend often to their clients. This is a win-win for everyone involved – my client gets to earn some passive income for recommending a product or service they would recommend anyway, their client get to take advantage of a great product or service and the vendor of the product or service gains a new client and a sale.

Win-Win-Win.

If you have products or services that you love and recommend often to your clients, I highly encourage you to implement this simple passive income strategy into your business model!

I, of course, walk my talk and follow the same strategies I recommend to my clients, which is why I have joined the affiliate/referral programs for the products and services I feel are vital to my everyday business operations. The majority of links on this for products and services I recommend or review are affiliate or referral partner links.

It really is a no brainer to me, if you are recommending it anyway, why not earn some additional passive income in the process.

ACTION STEP:

Make a list of the products and services you LOVE using in your business and that you recommend to clients often and do a little research to see if they offer an affiliate or partner program, then join!
Make sure that it is clear to your website visitors and clients that the link you are providing is an affiliate link. If you need an example of an online Affiliate Link and Compensation policy, you can SWIPE mine here.

NOTE: I often provide a live link using my affiliate link and also provide the url to the site which is not live, then I give the client the option to click my link or cut and paste the url. I do this because I want my clients to know I respect them and that they do have a choice, of course clicking a live link is easier than cutting and pasting, but at least they have a choice.