This well-written article on the Oxford University Press blog gives a compelling view of the legal and practical problems with the affiliate nexus laws that have been passed (or are being considered) in many states. The author covers the practical and legal drawbacks to these laws, makes a compelling argument that the affiliate nexus model is not sustainable, and ends with a call to Congress to solve the problem once and for all with sound federal legislation.
We understand why states are enacting these laws—to recoup the sales tax revenue that has been disappearing as shoppers turn to internet retailers. However, we believe this approach creates more problems than it solves (as the article explains), and there is a better solution: the Main Street Fairness Act. Not only does it avoid the problems of affiliate nexus legislation, it also levels the playing field between local retailers that have to collect sales tax and online retailers that don’t.