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Tax Case Shadows YouTube Affiliate Money Plan

What if making affiliate money with videos means collecting taxes too?

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If affiliate revenue will make video sharing site YouTube a money maker, we wonder how New York’s recently passed law requiring tax collection on affiliate-initiated sales could impact the strategy.

Amazon.com and the State of New York will duke it out in court over New York’s grab for taxes on Internet sales that start with an affiliate based in the state. This fight could be of interest to Google as well.

NewTeeVee cited comments made by YouTube co-founder Chad Hurley about potential for making money on videos with affiliate deals. Links to Amazon and iTunes represent the early test.

YouTube pulls in plenty of traffic, but its impact on Google’s bottom line rates lower than what Google brass and shareholders would probably like. While Google effectively places ads alongside contextual search, netting it billions each year, the approach hasn’t taken off with YouTube or its viewers.

The New York case opens up a proverbial can of worms about affiliate marketing. What if someone from Binghampton uploads a video of a dancing dog, and YouTube drops in an affiliate link to Amazon that leads to pet care products? Will New York State consider that a local sale due to the residency of the video poster?

That may seem a silly question, but in our litigious society, it deserves at least some passing thought, even if only to find grounds with which to dismiss it. One can bet other states will watch the Amazon/New York case closely, as they could find themselves in position to claim a windfall of sales taxes they might not ordinarily receive.

Tax Case Shadows YouTube Affiliate Money Plan
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  • http://luisgalarza.blogspot.com/ Luis Galarza Marketing Tips

    The US always trying to monetize in form if TAXES everything that is turning into a hot money making industry, and the Internet has been one of the main targets for years, the problem is that if they can’t tax it they just shut it down, like Bush did to the online gambling industry…

    I think is completely stupid doing this, I mean come on the government already gets tax money from an entrepreneur’s income generated by affiliate marketing, and now they want even more money from the same source of revenue, this is some kind of double tax scam…. Don’t get me wrong, I think is ok they required online merchants to paid sales taxes from their web sales, but, now they want to charge the affiliate marketer even more cash from the same sale, what of heck are they thinking?

    Personally, I hope is a bad joke or a communication error… If not, they are going to push a lot of affiliate marketers to do their business from foreign countries.

    Come on, it’s already hard enough to make money as an affiliate for many entrepreneurs, and they want to make it even harder.

    Thanks, but not thank government…

    Yours truly,

    Luis Galarza,

    Internet Marketing For The Poor!

    • Guest

      Exactly.  If someone could figure out how many times the same product was taxed and how much Americans pay in taxes, not just income, there would be blood in the streets.   

  • http://www.direito2.com.br Ruben Zevallos Jr.

    When you have the power to rule for you… it’s not so hard to think every profit is yours… so… Brazil have the 3rd big tax charges… and the goverment is not thinking to decrease it…

  • http://simurl.com/message-board Message board

    Good one. Thanks for sharing :)

  • http://www.shoppingreviewer.com John

    Thailand can register aff from you tube?

    Thank You.

  • http://www.lonestarbuggies.com Linda

    The You Tube Videos were just bad, very few to choose from, and nothing contextual about the site I tried them in.  No wonder they aren’t making any money. I don’t think anyone needs to worry much about this.

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    thanks for your article. Very help me. I will more like visit to webpronews site. :) Fantastic

  • http://www.websoftware.com affiliate marketing software

    I couldn’t agree with you more. I don’t see this happening.