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Amazon ends deal with 25,000 California 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 more: http://www.ocregister.com/articles/amazon-306409-affiliate-c...

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We will be to broke to buy

anything on line are off line.

Prepare & Share the Message of Freedom through Positive-Peaceful-Activism.

Affiliate programs are just

Affiliate programs are just another form of advertising, often referred to as performance marketing / performance advertising.

Merchants surely look at their affiliate expenses as advertising related expenses. They know their ad costs, profit margins, cost per visitor, value per visitor, conversion rates, etc. They know everything they need to know in order to switch to another form of advertising.

The only thing these bogus "affiliate nexus" laws will do is cause companies to shift their budgets back to non-affiliate type advertising. And I call them bogus because an affiliate is in no way a part of the company.

On the other hand, I don't see how Amazon gets away with not paying sales taxes in States where they do have a real physical business presence established.

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reedr3v's picture

the blindness of arrogance; those in

power cannot see beyond their own will.