Ohio Enacts Click-Through and Affiliate Nexus Legislation

Ohio Governor John R. Kasich has signed legislation that enacts click-through and affiliate nexus provisions. Effective July 1, 2015, a seller is presumed to have substantial nexus in Ohio if the seller enters into an agreement with a resident under which the resident, for a commission or other consideration, directly or indirectly, refers potential customers, by a website link, in-person oral presentation, or otherwise, to the seller. In order for the presumption to apply, cumulative gross receipts from sales by the seller to customers in Ohio who are referred to the seller must exceed $10,000 during the immediately preceding 12 months. The presumption can be rebutted by demonstrating that the persons with whom the seller had agreements did not engage in activities that were significantly associated with the seller’s ability to establish or maintain a market in Ohio. The presumption of substantial nexus for other specified activities performed by the seller or an affiliated person can also be rebutted if it can be shown that those activities did nothing to establish or maintain a market for the seller in Ohio. The legislation also expands the criteria for substantial nexus to include: use of employees, agents or others to sell a similar line of products or use similar trade names or trademarks as the seller; use of any person, except for a common carrier, to promote, advertise, facilitate customer sales, perform maintenance, delivery, and installation services for the seller’s Ohio customers, or facilitate delivery by allowing customers to pick up property sold by the seller. The following no longer form the basis for a presumption of substantial nexus in Ohio: a seller’s registration to do business in Ohio and any other contact with Ohio that forms the basis of substantial nexus as permitted under the U.S. Constitution’s Commerce Clause. (H.B. 64, Laws 2015)

UPDATE: Ohio repealed its click-through and affiliate nexus provisions as well as its cookie nexus provisions by signing Am. Sub. House Bill 166, Ohio’s FY’20-‘21 general operating budget, into law, effective August 1, 2019. The budget bill enacted new economic nexus requirements and a tax collection requirement for marketplace facilitators.

Posted on July 16, 2015