Amazon threatens to shut down California Affiliates program

[L.J. Sellers]

An article from TechCrunch

"Due to a sales tax measure recently passed in the California state legislature and on its way to be signed by Governor Jerry Brown, Amazon has sent all participants in its California Amazon Associates program the below email, warning of the termination of the program..."



With states so financially strapped for cash, I expect to see more of these sales tax measures, and I'm not sure Amazon can win this one in the long term.
L.J.

[outlander78]

No one likes to pay tax, especially new or higher tax, but without it, the country falls apart. In this case, I thought the US had a law banning tax on cross-state commerce?

[odiakkoh]

i got 2 emails yesterday. 1 in the morning telling me it might be over and 1 in the afternoon telling me yeah its over.

[RainingLemur]

That kinda sucks for people that actually make money through that program. I can see California's need for increasing its own cash-flow, but I can't see this ending well at all.

[DianNC]

That's so weird. I've been using an online source for just about all of my computer media needs for years that's based in California (no brick and mortar store...just distribution center) and have never paid tax. I always wait until my purchase is at least $25, so I've never paid shipping, either. Hmmmm. Maybe that's all about to change, as well.

[elemenoP]

I live in New York and I pay tax on all Amazon purchases. I thought this was because of the same law that California is now passing. I wonder why Amazon didn't just shut down the affiliates program in New York, as they did in other states, according to the article?

eP

[Elfwreck]

Amazon's going to discover that no, their "affiliates" will not rise en masse to support them and insist that Amazon should go tax-free in 48 states, or however many it doesn't have main offices in. Multi-million dollar international mega-corporations not paying taxes is part of why we're in an economic crisis.

Amazon got market dominance by being ubiquitous; the tactic of "if we have to pay taxes, we won't do business in your state" will make them less universal. B&N or Powell's may jump in with an affiliate program that does pay taxes, and Amazon would lose a lot of its traffic.

[OtterBooks]

Originally Posted by Elfwreck

Amazon's going to discover that no, their "affiliates" will not rise en masse to support them and insist that Amazon should go tax-free in 48 states, or however many it doesn't have main offices in. Multi-million dollar international mega-corporations not paying taxes is part of why we're in an economic crisis.

Agreed. The only aspect of this I don't like are the states' inclination to take care of things via regressive taxing, getting more revenue from sales tax instead of instituting more progressive income tax. (edit: and a sales tax isn't even about Amazon paying taxes).

[HarryT]

Originally Posted by DianNC

That's so weird. I've been using an online source for just about all of my computer media needs for years that's based in California (no brick and mortar store...just distribution center) and have never paid tax. I always wait until my purchase is at least $25, so I've never paid shipping, either. Hmmmm. Maybe that's all about to change, as well.

Surely you have to pay use tax on your purchases if you consume them in your own state, don't you?

[Phogg]

Originally Posted by L.J. Sellers

An article from TechCrunch

"Due to a sales tax measure recently passed in the California state legislature and on its way to be signed by Governor Jerry Brown, Amazon has sent all participants in its California Amazon Associates program the below email, warning of the termination of the program..."



With states so financially strapped for cash, I expect to see more of these sales tax measures, and I'm not sure Amazon can win this one in the long term.
L.J.

I will bet on Amazon on this one.

Why, Because Tennessee passed overarching internet regulations years ago and if you will look around the internet you will find that a huge number of businesses - from online education to truck parts simply chose to not do business with people in Tennessee. The world didn't end, their businesses don't fail, and the one who looks stupid in all this is the Tennessee legislature and their backwater staffers.

California is broke for good reasons. It didn't happen overnight and their solution to the problem has been to do more of the same. If you pull your business out of it now then you have less to lose when the state defaults.

Go Bezos.

[Phogg]

Originally Posted by elemenoP

I live in New York and I pay tax on all Amazon purchases. I thought this was because of the same law that California is now passing. I wonder why Amazon didn't just shut down the affiliates program in New York, as they did in other states, according to the article?

eP

I believe the California law is more like Tennessee and the one Governor Rick Perry's faction in Texas tried to pass - not only affecting things sold in state but also anything on trucks shipped through centers there from someplace else on their way to yet another place. (can you tell I think Perry is an idiot?)

[elemenoP]

Regardless of how the law was written, the net effect is the same: I as a New Yorker pay taxes on all Amazon purchases, regardless of who the seller is and where the seller does business. My question remains: why doesn't Amazon just do the same in California?

eP

[elemenoP]

Actually Phogg's earlier response ("I bet on Amazon") might be helping me understand this. It could be that at the time New York enacted their law, they were in a much stronger position financially than California is now. I guess Amazon is betting that if they strong-arm the state of California, then California will back down, since they have big problems right now.

I wonder, though: how much business did Amazon lose in New York state when they started collecting sales tax? I, for one, did not change my buying patterns at all. I just pay the sales tax.

eP

[outlander78]

Would it not be easier to have one federal tax than one tax per state? A standard, wide-spread tax shared with the states would be easy to implement, wouldn't hurt business, and would avoid the lunacy of states competing with each other.

Canada has had such a tax for years. Everyone hated it when it came in, and most still dislike it today, but it is accepted as necessary, and helped keep our government solvent. Personally, I like paved roads ...

[DianNC]

Originally Posted by HarryT

Surely you have to pay use tax on your purchases if you consume them in your own state, don't you?

Sure. I look at taxes as a payment for services received. I benefit from public law enforcement, fire protection, public schools, etc. provided to me in the state in which I reside.

I don't live in California, though, so I don't receive any of their services.

I just looked on the website of the e-tailer I do business with and, since they're in California, they do charge California consumers tax. They also have a blurb stating that residents in Tennessee and Oklahoma have to report their purchases on a tax form or something. I don't live in either of those states either, so I didn't read it too carefully.