The article Affiliate nexus litigation: Everyone loses by Annet Nellen points out some of the glaring problems with affiliate nexus laws. Some of these include:
- Litigation Costs– Amazon and Overstock have proven time and time again that they are willing to litigate these laws.
- Loss of income tax revenue– Amazon and Overstock have decided to sever their ties with affiliates in state with these types of laws, reducing the amount of income that the states can tax.
- Problem still remains–After a relationship with a 3rd party affiliate is severed, a company is no longer liable to collect sales tax.
- No solution reached–There are two conflicting cases on affiliate nexus (New York, and Indiana), and the Supreme Court has been unwilling hear the case. The only real hope for a solution seems to lie with Congress.