Who Stands to Lose

First and foremost, implementing the Pennsylvania Affiliate Nexus Tax Law will hurt consumers.  Why?  Because affiliate marketers are an integral part of the consumer purchasing process.  Many affiliates do research on the products that they promote.  Some of them write in-depth reviews on products that they have tried and they feel offer value to the consumer.  Read my cookware review for example.  They are familiar with them, they are familiar with competing products, and they can give consumers good advice to make an informed decision before they make the purchase.  Many consumers will make those purchases through links on the reviewer's website or blog.  This has two benefits, because it saves the consumer time, as many reviewers have already done the competitive shopping part as part of the review.  Also, the reviewer or blogger can make a small bit of money from each referral from the links on their site.  If this law is implemented, then advertisers will end their relationships with Pennsylvania affiliate marketers, and their won't be all of those informative product reviews that consumers have come to rely on.

The taxing authorities will lose, because some affiliate marketers are making enough money that it will be worth it to them to move to another state so they continue their businesses.  They will lose tax revenue from those that stay, because they will have a loss in income, and therefore be paying less in PA state income tax.

Product Manufacturers, distributors, and wholesalers will lose, because they will lose sales. Thousands of big retailers rely on affiliate marketers to drive traffic to their products.  WalMart, K-Mart, Target, Home Depot, fye, Circuit City, and Barnes & Noble, just to name a few that are well known.  Without affiliates, they all stand to lose millions of dollars.  Even online stores, such as Amazon and E-Bay rely on affiliates to drive traffic to their websites.