I think Janet was the first to break the news of the Overstock changes

This is a story that both Linda at 5 Star Affiliate Programs and Shawn's Affiliate Blog have been covering in depth.

The New York Times also has coverage and been giving out some great links.

Techcrunch has a Scribd copy of the original Overstock posted letter (Shawn posted the email)

The New York Times reports that

Linda is also reporting that this may soon affect California as well (there are lots of affiliates in California, they like the beaches)

On the good side, this may soon affect our good friend Jason Calacanis, who as a new affiliate I am sure was hoping to make some money from reputable sites such as Overstock.

The Times reports this will affect large affiliates in New York such as NextJump, Jellyfish and Entertainment Publishing, the unit of IAC/InterActiveCorp that prints discount coupon books.

So Why The Google Tax Headline?

This isn't specific to Google, it could be any website advertising.

Google have a referrals program for various products

If you run Google Adsense on your blog, you are in many ways an affiliate of Google's advertising program, you are selling traffic on their behalf.

So Where Would It Be Taxed?

Lots and lots of options

• California - Google's primary location
• Where the servers are located
• Anywhere Google has a physical presence (everywhere?)
• The location of the company buying the advertising
• The location of the servers of the company buying the advertising
• The location of the person clicking an advert, or maybe the proxy server, or the company that is billed to
• The location of the publisher displaying the ads

Adwords advertisers in the EU have paid VAT since 2003 - I believe there is something similar in Taiwan
Adsense publishers in the EU if required can issue Google with a VAT invoice

As far as I am aware, no sales tax is charged in the US at any point in the chain.

As soon as you start down the rabbit hole of online business, the lines get blurred

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