I’m excited to announce that tomorrow (5/29) I am going to have the chance to sit down with John Marshall of EpiscopalBookstore.com to chat about the growing trend of states requiring online retailers to collect sales tax from shoppers. Coming July 1, 2008, this will be required of all online resellers in Washington State.

Taxation of online retailers has become a lightening rod issue with recent legal action pitting Amazon against the State of New York - with New York asserting that Amazon’s use of affiliates operating in New York (where Amazon has no offices, warehouses, etc) constitutes “Nexus” or effectively a corporate presence in state. New York argues that this entitles them to charge sales tax on Amazon transactions despite the fact that Amazon is Seattle WA based. For more coverage of this issue, I recommend following the story on the 5 Star Affiliate Marketing Blog - Linda Buquet has done an awesome job of info gathering on this.

This case has caused many merchants to react (over react) and fire all of their New York based affiliates to insulate themselves from this potential issue, and affiliates that are New York based to look into incorporating and doing business from New Jersey to exempt themselves from being dropped by merchants and networks fearful of a heavy tax bill.

I’ll speak with John on the Washington specific issues (this is messy) as well as what he knows about the nationwide movement of states to aggressively pursue sales tax from online retailers. Washington is a particular mess for this as many counties and towns/cities, etc also attach their own fractions of percentages points to the state sales tax to finance projects and the state appears to be basing the sales tax that needs to be gathered on the location of the buyer.

My conversation is at noon PT and I will try to have this edited and up by 3:00 pm PT

I just got an email today that confirmed some suspicions I had after receiving emails from a few affiliates and merchants who were reporting login issues. After 2 years of making a go at running one of the first Christian focused affiliate/CPA networks in the industry, John and Jack decided to call it quits (at least temporarily) last week.

The email from John indicated that all affiliates owed $10 or more in commissions would have a check coming their way by May 31st 2008 to close out the books. He also indicated that the hope at USN would be to resume operations if enough well converting Faith and Family friendly offers were identified.

I’m sad to see this happen within 1 month of Manna Marketing also going under. John and Jack are great guys, were excellent to work for (even though things didn’t work out) and were inspirations to me in my faith walk.

Christian merchants will now need to look to the secular platforms for their affiliate programs or to self hosted software applications. My recommendations for affiliate networks of choice are Shareasale for the budget conscious merchant, or AvantLink for the really serious Christian retail merchant who is looking for advanced datafeed handling and merchandising features.

I know there is a pretty serious concentration of Christian affiliates at Shareasale that are working with IBS Direct and Faithwear as well as SinglesofFaith, and I would love to see a good core of Christian affiliates at AvantLink as well.

Any existing USN affiliates or merchants with questions should contact John Porricolo at jjp [ at ] unitedsharingnetwork.com

I am also looking into another promising affiliate/ecommerce system targeted at the faith-based market, but I have some tire kicking to do before I recommend it.

Good luck and Godspeed to John and Jack in whatever venture they decide to attack next.