Legal Matters

Affiliate marketing arrangements that don’t involve performance-based (i.e., sales commission) compensation won’t create a tax collection presumption. In that case, there’s no need to present information to rebut a presumption of tax collection responsibilities.

The TSB also specifically provides that this presumption doesn’t arise “where the consideration for placing the link on the Web site is based on the volume of completed sales generated by the link.” As an example, the bulletin refers to the situation where an Internet marketer pays “a set fee based only on the number of clicks on the link to [the Internet marketer’s] Web site, whether or not sales are made.”