Revenue sharing

Revenue sharing has multiple, related meanings depending on context.

In business, revenue sharing refers to the sharing of profits and losses among different groups. One form shares between the general partner(s) and limited partners in a limited partnership. Another form shares with a company's employees, and another between companies in a business alliance.

On the Internet, revenue sharing is also known as cost per sale, and accounts for about 80% of affiliate compensation programs. E-commerce web site operators using revenue sharing pay affiliates a certain percentage of sales revenues (usually excluding tax, shipping and other 3rd party cost that the customer pays) generated by customers whom the affiliate refer via various advertising methods.

United States government revenue sharing was in place from 1972-1987. Under this policy, Congress gave an annual amount of federal tax revenue to the states and their cities, counties and townships. Revenue sharing was extremely popular with state officials, but it lost federal support during the Reagan Administration. In 1987, revenue sharing was replaced with block grants in smaller amounts to reduce the federal deficit.