Hoping to turn its opposition to online sales taxes into increased customer loyalty, Overstock.com announced today a plan to shift money from affiliate programs shuttered because of newly enacted sales tax laws to consumers taking part in the e-retailer’s Club O rewards program.
The promotion applies to online shoppers in the states of Illinois, New York, North Carolina and Rhode Island. Each state has enacted laws that require Internet retailers to collect state taxes if they work with in-state affiliates, which are web site operators that provide links to products sold by web merchants and then receive commissions on those sales. State officials say affiliates constitute an online retailer’s physical presence in a state, satisfying a legal requirement that lets the state require online retailers to collect the taxes. Overstock calls such laws unconstitutional and, along with Amazon.com, has cut ties with affiliates in states that have enacted the tax laws.
“We have decided to sever our relationships with thousands of marketing affiliates in those states, take the money we would normally pay those affiliates, and use it to reward our best customers in those states,” says Patrick Byrne, CEO of Overstock, which is No. 28 in the Internet Retailer Top 500 Guide.
Read the full article here.