Amazon Threatens to Terminate CA Affiliates due to Pending California Nexus Tax Bills

[Linda Buquet]

Unfortunately it appears the HUGE state of California could be next in line for anti-affiliate Nexus Tax legislation. It will be a very sad day for thousands of California-based affiliates if these bills pass. And it sounds like these bills are likely to pass and the law go into effect within the next 2 days.

I wish California would realize they are not HELPING the state economy but HURTING it! Any tax gains they think they will make, will be offset by the economic losses due to small and large affiliates businesses losing income (therefore paying less income taxes), having to layoff staff (putting more strain on state resources) and/or moving out of California so they can continue their businesses in more supportive states.

Yesterday the PMA made this foreboding announcement:

<strong><a href="http://performancemarketingassociation.com/alert-ca-about-to-implement-nexus-tax-effective-immediately">ALERT: CA about to implement nexus tax – effective immediately</a>

Governor Brown of California has announced he has secured enough votes to pass his budget, including the Affiliate Nexus Tax and 2 related nexus bills: AB 153, AB 155 and SB 234. </strong><strong>The law will go into effect immediately upon signing, and he must sign before July 1st, 2011.</strong>

We are doing everything we can to block this from moving forward but we believe passage is imminent. If you are a California-based publisher, or an out-of-state advertiser, please seek immediate advise from a tax or legal professional.

<strong>Andrew Shotland AKA @localseoguide just posted an image of the </strong><strong><a href="http://twitpic.com/5ipykr">Amazon California Associate Program termination notice</a>.</strong>

TheNextWeb reports:

<strong><a href="http://thenextweb.com/industry/2011/06/29/amazon-just-terminated-the-associates-program-in-california-due-to-new-tax-law/">Amazon is terminating the Associates Program in California due to new tax law</a></strong>

Even though the bill has not yet been passed, Amazon is pulling the program preemptively in California. Apparently it believes that the bill will get passed and the new tax laws will go into effect. Amazon says that the bill is ‘supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors.

Geno has some good advice for merchants as always here: <strong><a href="http://www.amnavigator.com/blog/2011/06/29/bad-news-from-california-affiliate-nexus-tax-law-on-the-threshold/">Bad News from California: Affiliate Nexus Tax Law on the Threshold</a></strong>

 

[kbldshmn]

I received the notice. Luckily, I moved away from Amazon about 2 years ago and concentrated on EPN and Adsense.

 

[djbaxter]

Still, the point is that governments everywhere generally continue to focus on the short run - how to raise more cash or please more voters - instead of the long term. How is California or any other state going to be any further ahead by discouraging business and especially small businessmen? California will lose because business and businessmen will go elsewhere. And then they'll lose income tax as well as sales tax.

 

[Linda Buquet]

Dang, they already passed it. Short-sighted SOBs!

http://affiliate-marketing-forums.5...nia-passes-affiliate-nexus-tax.html#post88083

 

[djbaxter]

Friggin' Jerry Brown... He hasn't learned a thing in the past 20 or 30+ years, has he?

 

[Closet Fan]

Well, its more than threat, they've already done it. Amazon has already terminated all its California affiliates.

 

[Linda Buquet]

Yes I mentioned it passed a couple posts up.

Here's a good overview of the situation:

<a href="http://searchenginewatch.com/article/2083119/California-Affiliate-Tax-Becomes-Law">California Affiliate Tax Becomes Law</a>

"These bills would provide no new tax revenue collected by Amazon or others who sever their relationships with California-based advertisers," Paul Misener, Amazon's vice president for global public policy, says in a letter to Senator Runner, adding: "California consumers would still be able to purchase online at www.amazon.com from Amazon's retail business, so these bills would only deny California-based organizations and individuals the advertising fees they currently receive from out-of-state retailers and, ironically, California?s general fund could suffer a net loss in revenue as affiliates pay less income tax or move out of the state."

 

[djbaxter]

Yes, exactly. Stupid stupid politicians.