Step 1. Meet Contractual Condition

Merchant will need to add conditions to affiliate TOS to meet “Contractual Condition” as outlined in NYS TSB-M-08(3.1) dated June 30, 2008 titled “Additional Information on How Sellers May Rebut the New Presumption Applicable to the Definition of Sales Tax Vendor as Described in TSB-M-08(3)S

Sample of Terms and Conditions to be Added to Affiliate TOS by Merchant

Prohibition against solicitation activities by New York State resident affiliates

___ As a condition of its participation in the (Fill in Company Name) Affiliate Program, Affiliate agrees that its solicitation activities on behalf of (Fill in Company Name) within the State of New York shall be limited to providing a link on Affiliate’s website to the (Fill in Company Name’s) own website. Affiliate acknowledges that under current New York State law, further solicitation and promotional activities by Affiliate within New York State may subject the (Fill in Company Name) to liability for collecting New York State sales tax on all sales to New York customers. Therefore, as a condition of participation in the (Fill in Company Name) Affiliate Program, Affiliate is prohibited from engaging in any solicitation activities in New York State intended to refer potential customers to the (Fill in Company Name), including, but not limited to: distributing flyers, coupons newsletters and other printed materials, or electronic equivalents of such materials; engaging in verbal solicitation, including in-person referrals or initiating telephone calls; and sending emails intended to refer customers to the (Fill in Company Name).

___ The following pertains only if the Affiliate is an organization, club, or non-profit group; such affiliates shall maintain prominently on its website information alerting its members to the prohibition against solicitation activities in New York State as described above. Again this only pertains to websites of organizations, clubs and non profit groups.

Step 2. Proof of Compliance

In addition to a contract or agreement that contains the above limitations the merchant must obtain a signed certification annually from each of its New York affiliates, certifying that the affiliate did not engage in any of the prohibited solicitation activities above at any time during the previous tax year. If the merchant accepts such certifications in good faith (that is, the merchant does not have reason to believe a certificate was false or fraudulent), the merchant will be considered to have satisfied its burden to prove compliance. Agreement must contain affiliate name and address and must be submitted by May 31 of each year. The certificate should also include - "This certification and all information herein is subject to verification and audit by the New York State Tax Department."

Step 2 is to obtain signed certification such as the following, affiliate send this letter into merchant every year (on their letter head)

Proof of compliance with prohibition against solicitation

In accordance with TSB 083.1, I, Affiliate’s Name do hereby swear to the following:

During the past year, (fill in year June 01, 200x- May 31, 200x) I have adhered to the guidelines set forth in my affiliate agreement. I have not engaged in any of the prohibited activities including, but not limited to: distributing flyers, coupons newsletters and other printed materials, or electronic equivalents of such materials; engaging in verbal solicitation, including in-person referrals or initiating telephone calls; any direct to merchant pay-per-click activity: and sending emails intended to refer customers to the (Fill in Company Name). The only promotional methods I have used are promotion of my own website and have not directly solicited on behalf of (Fill in Company Name).  This certification and all information herein is subject to verification and audit by the New York State Tax Department. 

Affiliate Name (Must Print): ________________________________________________

Signature: _______________________________________________________________

Company: _______________________________________________________________

Affiliate ID: _____________________________________________________________

Date: ___________________________________________________________________

Step 3 For organizations, clubs, or non-profit groups ONLY

This pertains solely to clubs, non profit groups and organizations. These sites must include notice on their website reminding all members about these conditions. All annual certifications shall be signed by a person with the authority to enter binding contracts on behalf of the organization and shall include the name and address of the person signing the certification.