Since 1992, the US law has stated that online merchants don’t have to collect sales taxes in states where they don’t have a physical presence. This twenty-year-long loophole was supposed to come to an end, as a new bill got introduced in 2011 to settle this.
However, a number of legislators in the US Congress challenge the bill because it essentially introduces a new tax that the US citizen would have to pay. Additionally, they don’t believe that the tax would be feasible practically.
The nature of the whole problem is the unfair advantage online businesses have over their brick-and-mortar competitors. Common behavior of customers these days is to treat brick-and-mortar stores as showrooms to test various goods, and then to buy them online, where they’re cheaper due to no sales tax.
Authorities believe that introducing this tax to the online would level the playing field and enable everyone to compete under similar conditions.
The problem, however, is that introducing such tax would essentially stop small online retailers from growing – a fact that everyone agrees with.
For affiliates this might mean some tough times when dealing with small online merchants. Such merchants might not be able to run their businesses with the same efficiency as before. This might force them to search for savings in different places, and, in the end, affect their affiliate programs.
As an affiliate you should work with both small and large merchants and keep your portfolio diverse. This is the only way to save yourself from any kind of problems.