Sales Tax Nexus?

[alp]

Has anyone in the U.S. investigated the impact of an online affiliate program on state sales tax nexus?

In a nutshell, there is no case law that explicitly addresses state tax nexus issues with respect to the Internet.

There is speculation that having an affiliate (selling your product) who physically resides in a state that you do not have presence in may create nexus in that state. If that is true, it opens up ALL sales in that state to state sales tax.

Any input on your experiences with this is appreciated.

[jaiem]

Using logic and common sense, it seems to me that since most affiliates just provide some advertising for the affiliate company it's the same as having an ad or bill board. IOW, I don't think sales tax rules apply if an out-of-state company buys an ad in another state. Same for website affiliates.

OTOH, when it comes to taxes common sense is never common so I would expect some court case sooner or later.