Fighting Proposed Tax Legislation Requires Stats – Stat!

The grassroots efforts to fight the proposed tax legislation that directly (and negatively) impacts affiliates are making some in roads. It’s wonderful to see so many people jumping in to help in the battle. Groups such as the Performance Marketing Alliance and Affiliate Voice are working hard to gather information, keep the industry up to date on what’s happening in each state, and rally the troops.

But that’s just not enough. As an industry we are missing some key ammunition in this huge fight. We need more statistics about the size of the performance marketing space. The research just isn’t there. There’s a market research report from MarketingSherpa that estimated the overall size of the affiliate space in 2007 to be around $6.5 billion, but that is old data and doesn’t provide a state-by-state breakdown. Lawmakers are really only concerned about how many businesses are impacted in their respective states.

What is desperately needed is the specific number of affiliates in each state or the amount paid out in commissions to affiliates in each state. But those figures just aren’t available for public consumption nor are they easy to acquire. Of course, we can all do some extrapolation on a variety of available figures to come up with our own home-grown estimates but unless we have firm numbers from credible sources, lawmakers won’t take notice.

The big affiliate networks have that information and I would encourage them to make it available in some form. I understand there may be privacy and other concerns. But there are many ways to work around disclosing specific affiliate income or compromising a network’s proprietary information. Aggregating that data from the networks could be very powerful and sway things in the favor of affiliates.

If each of the big affiliate networks (Commission Junction, LinkShare, Google Affiliate Network and ShareASale) were to provide the total amount of commissions paid out in each state, I think that would go a long way to showing legislators that these small businesses (affiliates) are, in fact, big business in their respective states.

When I attended the Lobby Day in California, all of the people we met with were impressed with the LinkShare letter to affiliates and the pages-long list of cities where affiliates would be impacted. Imagine if there were specific revenue number attached to that information.

From that type of data, lawmakers would be able to see that a huge amount of income tax is generated via affiliates and diminishing that income with laws that could see out-of-state retailers dumping affiliate, would ultimately be very bad for the states’ coffers.

The affiliate space is estimated to be much bigger than the American booksellers association, which is the group behind all of these legislative taxation pushes that single out affiliates. But we must make our case by proving it with real data. The ABA is certainly offering up figures to make its case.

Once lawmakers have the facts and figures in hand, there is no way they can continue to believe that the additional income tax generated from out of state retailers will exceed what will be lost in income tax from a thriving small business community.

Please encourage whatever network you work with to provide this information or any statistical data that could help stave off this unfair legislation.