Call it a sign of the economic times: According to a TurboTax infographic, states are now instituting affiliate taxes. Although it’s been a long time coming for online retailers like Amazon, cloud services resellers have typically been immune. But that could change.
Seven states, including Arkansas, California, and New York have enacted affiliate taxes, and another 14 have introduced affiliate taxes—though they haven’t passed them so far. And while much of the concern about cloud resellers have centered on issues of security and privacy, it’s a safe bet that companies like Rackspace, which have affiliate programs, might soon feel the heat.
Still, as the TurboTax infographic shows, state tax authorities could be faced with a maze of complexities, involving multiple states and countries. It will be interesting to see the how they determine tax responsibilities. In the interim, companies could simply discontinue their affiliate programs.
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