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CA Tax Nightmare: Amazon Ends Deal with 25,000 Websites

“Gov. Jerry Brown has signed into law California’s tax on Internet sales through affiliate advertising which will immediately cut small-business website revenue 20% to 30%, experts say.

The bill, AB 28X, takes effect immediately. The state Board of Equalization says the tax will raise $200 million a year, but critics claim it will raise nothing because online retailers will end their affiliate programs rather than collect the tax.

Amazon has already emailed its termination of its affiliate advertising program with 25,000 websites. The letter says, in part:

(The bill) specifically imposes the collection of taxes from consumers on sales by online retailers – including but not limited to those referred by California-based marketing affiliates like you – even if those retailers have no physical presence in the state.

We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.

Read the rest here.

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  1. The Fly

    dumbest state in the union

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  2. Charles Barklays bank
    Charles Barklays bank

    I have a better strategy. Sell California, just before it’s finalized put all the money California can get on red. If you win, cancel the sale and California is then solvent. If you lose, push through the sale and say “hasta le vista baby.”

    Any other strategy would be turrible.

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  3. Bind Dead Aphid

    Imagine living in CA!

    My plan is to annex Mexico’s Baja peninsula and make it the Florida of the west. Constitution says it’s permissible and improbable.

    It has happened 37 times before.

    Mexicans shouldn’t care much as no one’s developed the area.

    If Mexico can move into America, what’s the latin phrase: “quid pro quo.”

    No doubt, Durbin and Reid might snort: “Dream On” to me, I’m American.

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