Affiliate marketers do not sell products. They work by encouraging prospective customers to buy products sold by other businesses, and are paid for each referral that brings in customers for those companies and businesses. So how does this work when it comes to affiliate marketing and taxes? If you are an affiliate, your taxes are different from those who sell products and services. You need to understand the way your income will be taxed.

Paying Taxes for Sales

When businesses sell products online, most states will charge a tax on sales; however, the taxes the seller pays are owed to the state in which the affiliate works. Because affiliates find the customers and are not the actual sellers, your affiliate business is not responsible for those taxes.