Affiliate Nexus Thresholds By State

A growing list of states are passing nexus laws requiring merchants to collect sales tax in states where they have affiliates. In many states with nexus legislation, there is a revenue threshold an affiliate must surpass for nexus to be created.

What States Have Nexus Legislation?

affiliate nexus mapaffiliate nexus key

I borrowed this map from CJ. I recommend looking at their site to find the most updated list of nexus states. It is a troubling list of growing states.

 

Nexus Thresholds By State

The amount listed by the state is how much an affiliate / publisher who resides in that state would have to generate in revenue for sales tax to need to be created. If you are an affiliate manager for a merchant who hasn’t outright banned affiliates from nexus states, I highly recommend having a written protocol in place. Everyone makes mistakes, but if an investigator ever comes knocking, you want to be able to prove to them that you had appropriate measure in place.

Arkansas – $10,000

California – $10,000

Connecticut – $2,000

Georgia – $50,000

Illinois – $10,000

Kansas – $10,000

Maine – $10,000

Michigan – $10,000

Minnesota – $10,000

Missouri – $10,000

New York – $10,000

New Jersey – $10,000

North Carolina -$10,000

Pennsylvania – No limit

Rhode Island – $5,000

Vermont – $10,000

West Virginia – No limit

 

Nexus Legislation Is Stupid

In some of the programs I have managed, we have had more foreign affiliates than Americans. It blows my mind that I can have numerous affiliates based out of China without placing the merchant at a competitive disadvantage, but one sale from an affiliate in West Virginia means we have to collect sales tax. The proponents of these bills also claim states will collect far more lavish sums than they actually do. My general skepticism is that many of these bills are lobbied for by large brick and mortar stores.

Workarounds

California has the most commonly used nexus workaround. It is a pain because the affiliate has to sign a new document every year. Here is a copy of the nexus affidavit I use for California. Arkansas, Pennsylvania, Missouri, and New York have possible loopholes / workarounds regarding what is solicitation. A lot of that starts going over my head though since I am not a lawyer.

Internet Fairness Act

I never thought I would support a national Internet sales tax law. I support it now because the state by state situation is too muddy. Most smaller and mid-sized companies don’t have the resources to track all the bills going through the legislature. I can’t wait to see more evidence on how much additional revenue states are collecting in comparison to what they spend on enforcement and lost income tax from affiliates moving to other states or countries.

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