Walmart.com pursues former Overstock.com affiliates

Wal-Mart announced Friday (April 15) an “open invitation” to join their Internet affiliation, a response to the April 8 move by Overstock.com to drop its Arkansas affiliates in response to a new Arkansas law changing Internet sales tax collection policy.

SB 738, carried in the Arkansas Senate by Sen. Jake Files, R-Fort Smith, was designed to close a loophole in tax law that puts Arkansas small businesses — those that collect sales taxes locally — at a competitive disadvantage. Gov. Mike Beebe signed the bill into law on April 1.

With the bill now law, Arkansas joins other states seeking to level the playing field between local retailers and large online retailers. Discount online retail giants like Amazon.com or Overstock.com don’t currently collect sales tax on items sold. They contend that customers are obligated to make the payments voluntarily.

Officials with Overstock.com say the law is unconstitutional because it forces out-of-state retailers to collect sales tax merely for using in-state ad services. The company said it will cancel all ad contracts in Arkansas and will end relationships with affiliate sellers in the state. Overstock has taken similar actions in Illinois, New York, North Carolina and Rhode Island.

Steve Nave, senior vice president of Walmart.com, said the company is glad to step in.

“Walmart will not turn its back on Arkansas internet businesses owners who have been put in jeopardy by an online-only retailer. Instead, we encourage them to join Walmart.com’s Affiliate Network. We applaud the Arkansas legislature and Governor Beebe for their leadership in supporting this important piece of retail fairness legislation,” Nave said in the statement.

Walmart will collect and remit all sales taxes due on all Walmart.com sales to alleviate all regulatory burdens from its customers. Walmart.com affiliates earn commissions by directing people to make purchases at online story of Bentonville-based Wal-Mart. Affiliate membership is free, and Wal-Mart provides banners, text links and data feeds.

“During the last legislative Session when this bill was passed, Wal-Mart advised us that they would step forward to work with these affiliates who potentially would be dropped by online-only retailers,” Files said about the Wal-Mart announcement. “I appreciate their stepping forward in such a quick way and following through on their word, and I believe this will benefit Arkansans in the long run.”