Following these rules will keep you out of trouble in the event that your site is ever reviewed by a government agency, or accused of malcontent by a user or other company.
3 Affiliate Marketing Legal Issues
The first and one of the most well-known issues with affiliate marketing is to make sure that you have proper disclosure for your affiliate links.
I write about this topic in more detail here, but basically you need to include a long-form disclosure somewhere readily available on your site, and a shorter disclosure next to the link, if the intent to monetize that link is not clear.
It only takes a few minutes to setup and is something that you’ll need when you start collecting emails and other user data. You can find plenty of sample website privacy policies around, and are free to copy the one I’ve included on this site if you need a reference.
This introductory course from Wealthy Affiliate also goes into more detail on this topic.
Finally, you need to make sure that you report any and all income you earn through your site to the appropriate tax agencies.
Many affiliates get into a lot of trouble here, thinking that they can “sneak in” a little extra income without reporting it, but the fact is that since all of these transactions occur online there is a very clear bread trail that the IRS could use to track your real earnings.
Most of the larger affiliate programs will state how they report affiliate payouts, and what forms you’ll need to fill out.
For most individual affiliate, a W-9 (independent contractor) is appropriate, while full-time affiliate might consider other self-employment entities, such as an incorporated company.
Filing requirements may vary from state to state.
For more information and training on beginning affiliate marketing, click here.