Overstock cuts its NY affiliates due to tax law

Share this article:

In response to New York's recently enacted “Amazon tax” law for e-commerce firms operating within the state, discount retailer Overstock.com has notified more than 3,400 New York-based affili­ate advertisers that their relation­ship will end as of June 1, when the law goes into effect.

“We hope this termination period will only be temporary,” said Jonathan Johnson, SVPof corporate affairs at Overstock.com. “We think that the New York law is unconstitutional and we think that lawmakers have made a mistake that is hurting small businesses in New York.”

The New York State law, approved last month, will require out-of-state online retailers to begin collecting sales taxes on purchases shipped to New York addresses, meaning that Amazon.com and Overstock, each of which has no employees or operations in New York, will be required to collect state taxes because several of its affiliates are based in the state.

Amazon is challenging the law in New York state court. Overstock may join Amazon or begin its own court battle, Johnson said. If the law is dismissed, Overstock will reestablish its relationships with all of its New York-based affiliates. The retailer believes that if it cuts out its affiliate advertisers based in the state, it will avoid charging customers sales tax.

“When it came down to choos­ing between our customers and our affiliates, it was an easy choice,” said Johnson.

Share this article:

Sign up to our newsletters

Follow us on Twitter @dmnews

Latest Jobs:

More in Multichannel Marketing

Generating Loyalty for Brands and Retailers in an Omnichannel World

Generating Loyalty for Brands and Retailers in an ...

Harnessing personas, loyalty programs, and new technologies can help marketers better connect with customers.

News Byte: Salesforce Forms Unit to Focus on Verticals

News Byte: Salesforce Forms Unit to Focus on ...

The industries business unit, led by ex-White House CIO Vivek Kundra, will serve six industry groupings.

Columbia U. Puts the "Do" in "Donation"

Columbia U. Puts the "Do" in "Donation"

Columbia University raises nearly $7 million in donations in just 24 hours with a combination of social media, live events, and gamification.