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In general, “click-through” nexus statutes create a presumption of sales tax nexus for out-of-state sellers that compensate in-state residents (“associates”) for sales made via links on their websites.
New York enacted the first of these laws in 2008. It still stands after the U.S. Supreme Court recently denied cert. to a case challenging it in Overstock.com v. New York State Department of Taxation and Finance. (U.S. 13-259, cert. denied 12/2/2013; Amazon.com LLC v. New York Dept. of Taxn. and Fin., U.S., No. 13-259, cert. denied 12/2/2013).
In fact, the only roadblock that click-through nexus provisions have faced this year is the Illinois Supreme Court’s decision to strike down the state’s click-through nexus provision after concluding that it discriminated against electronic commerce in violation of the Internet Tax Freedom Act, which expires in 2014.
Of the new click-through nexus statutes this year, they all look much more like New York’s statute than Illinois’. The Illinois statute imposed an irrebuttable presumption of being a retailer or serviceman in the state and specifically targeted Internet retailers. In contrast, New York’s statute has a rebuttable presumption and can be applied more broadly than referrals to a website. Instead, New York’s law defines the term “vendor” to include any person who solicits business in the state through employees, independent contractors, agents, or other representatives and, by virtue of that connection, makes sales within the state.
The chart below shows the states that have enacted click-through nexus provisions, and includes the Illinois provision, which was struck down.
|
State |
Effective Date |
Affiliate Threshold |
Statute |
|
Arkansas (rebuttable presumption) |
Oct. 24, 2011 |
More than $10,000 |
Ark. Code Ann. § 26-52-117 |
|
California (rebuttable presumption |
If federal legislation is enacted by 7/31/12 then click-through is effective 1/1/13. If federal legislation is not enacted, then AB 155 is effective 9/15/12. |
More than $10,000 (and more than $1 million in annual in-state sales) |
Cal. Rev. & Tax. § 6203(c) |
|
Connecticut (irrebuttable presumption) |
July 1, 2011 |
More than $2,000 |
Conn. Gen. Stat. § 12-407(a)(12)(L) |
|
Georgia (rebuttable presumption) |
Oct. 1, 2012 |
More than $50,000 |
Ga. Stat. Ann. § 48-8-2(8)(K) |
|
Illinois (irrebuttable presumption); repeal upheld by Performance Mktg. Ass’n v. Hamer, No. 114486 (Ill. Oct. 18, 2013) |
July 1, 2011 |
More than $10,000 |
35 ILCS 105/2 and 110/2 |
|
Kansas (rebuttable presumption) |
July 1, 2013 |
More than $10,000 |
Kan. Stat. Ann. § 79-3702(C) |
|
Maine (rebuttable presumption) |
Oct. 9, 2013 |
More than $10,000 |
Me. Rev. Stat. Ann. § 1754-B(1-A)(C) |
|
Minnesota (rebuttable presumption) |
July 1, 2013 |
More than $10,000 |
Minn. Stat. § 297A.66(4a) |
|
Missouri (rebuttable presumption) |
Aug. 28, 2013 |
More than $10,000 |
Mo. Rev. Stat. § 144.605(2)(e) |
|
New York (rebuttable presumption) |
June 1, 2008 |
More than $10,000 |
N.Y. Tax Law § 1101(b)(8)(vi) |
|
North Carolina (rebuttable presumption) |
Aug. 7, 2009 |
More than $10,000 |
N.C. Gen. Stat. § 105-164.8 |
|
Pennsylvania |
Sept. 1, 2012 |
None specified |
Tax Bulletin 2011-01; proposed legislation in 2013 (HB 1043) |
|
Rhode Island (rebuttable presumption) |
July 1, 2009 |
More than $5,000 |
R.I. Gen. Laws § 44-18-15 |
|
Vermont (rebuttable presumption) |
When adopted in 15 other states |
More than $10,000 |
Vt. Stat. Ann. tit. 32, § 9701(9)(I) (HB 436) |
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