California Affiliates, You May Be Next!
March 3, 2011 
3 Comments
Oh, how states can be so stupid. It appears that California is trying to push through laws that will require outside retailers to collect sales tax for any purchases made by California residents. This is only geared toward retailers that have affiliate programs with affiliates living in California, or any other nexus in the state of California. This is the same type of laws passed by North Carolina, Rhode Island, Colorado, and others. The issue here is that Amazon may cut ties with their California based affiliates because of it.
This was done to people in North Carolina, Colorado, and Rhode Island. This action by Amazon and other retailers actually caused the opposite of what they state wanted. When you cut the affiliate income of the residents, then they don’t earn as much. When they don’t earn as much, then they pay less income tax. So now, the state is not getting any sales tax revenue from the retailer, as well as no income tax from the affiliates. This is a lose-lose situation for the states that enact the stupid laws. If the legislators were actually knowledgeable and used their brains, then they would know that simple math shows that these tax laws are absolutely ridiculous.
Amazon sent a letter to some government officials in California stating that they would cut ties with all affiliates if any of the proposed four laws were enacted. They estimate that the state would lose 50% of the estimated income if Amazon would cut the program. That is a large amount of money and this is only if Amazon cuts the ties. Usually other large retailers tend to follow Amazon and cut the affiliates as well. All I have to say is, California don’t be another dumbass state to think you are going to game the system. Amazon has more control over the money they dish out to affiliates than you do, and all they have to do is send a letter and then cut the affiliates. It’s time to get your governing head out of your governing ass and use common sense! Oh wait, did I just use the word common sense when speaking about government…..
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This is another stupid state not thinking about basic economics and mathematics. When you take away income from affiliates, you lose the income tax revenue. Then we Amazon doesn’t have any affiliates, then they don’t have to pay sales tax in your state, which defeats the whole purpose for the bill. Failure all around for California and the other stupid states that already tried it.
I agree. The issue is that government doesn’t really understand simple economics, which is scary because that is what they base a lot of their decisions off of. One person shows them how much money they could make, but that person doesn’t understand how affiliate marketing works. This in turn should make this person’s point of view mute.