An Open Letter To Jeff Bezos On Terminating The Amazon Affiliate Program In California

Dear Jeff–

Thank you for your letter today, informing me that after seven years of being one of your affiliates — and having earned for you about $150,000 in that time — that you “deeply regret” unilaterally terminating my contract with Amazon to be an affiliate. I also especially appreciated the part where you reassured me that this action wouldn’t affect my ability to keep buying from your company. Nice touch.

I deeply appreciate that after so many years of supporting your company, and earning my 4.5% cut over those years (as I figured today, looking at my stats), that you’ve decided that I should be a pawn in your fight with my state. That type of loyalty really makes me want to support you in the future, should you restore your program. It also encourages me to want to continue shopping with you.

Jeff, I’m fortunate. Unlike the case with many of your affiliates, this won’t have a big economic impact on me. Having affiliate links here on my personal blog is more a hobby than anything else. I’ve got a successful day job.

But I don’t like unfairness in general. I also don’t have a lot of time to waste. And right now, I feel like you’ve just delivered a double-dose of both.

Cut The Program & Keep The Links

I’m not sure how many affiliate links I have on the blog. Not that many, maybe 25 to 50 in all. But until about an hour ago, those links were worth something to you. Now, because of your squabble over the sales tax issue, you’ve decided to just take for free what you’d previously paid for. If I don’t find time to track down and kill those links, you keep grabbing orders that get made through them and keeping the cut I previously received.

Over the next day or so, you’re going to get a lot of orders this way. Bigger affiliates will eventually move. Plenty of smaller ones won’t be bothered to change. But those small ones that don’t will add up into plenty of money for your company. You, of all companies, really understand how all that long tail stuff can mount up, right?

I’m not a big fan of class action lawsuits. They just enrich lawyers and let the plaintiffs end up with a $20 coupon to buy goods from the same companies that wronged them in the first place. But thinking about all those links that will keep earning you money for free, I kind of hope someone files a suit against you. They probably won’t win, but you deserve a little hassle, too.

I Get To Be Your Pawn With Only 10 Hours Notice?

You want to just up and terminate my contract with you with only ten hours notice? Hey, to be honest, I don’t even know what my contract is — or was — with you. I suppose you granted yourself these rights. Most big businesses tend to do so.

But really, it only occurred to you today to give your California affiliates this notice? I’ve checked. You’ve sent nothing to us about this. Nothing yesterday. Nothing in the past month.  Nothing at all, not until now. Since you clearly want to make us your pawns, maybe you could have told us sooner?

Then again, it might not have made a difference. See, I think you should collect sales tax. I don’t care what your “it’s unconstitutional” arguments are. Go argue them in court, with the people you’re upset with. But collect sales tax in the meantime. I’ll give you a simple reason why. It’s fair.

Let’s Make Amazon A Fair Trade Company

First, it’s fair to the affiliates that have helped build your business. You could collect sales tax and continue to have them support you, rather than suddenly make them all angry. Angry perhaps at the state, which is what you hope. But also angry at you.

For another, isn’t it time you grew up and became a real business that can compete against the bricks-and-mortar shops you undercut? Can’t you still win against them, even if you play on a more level playing field?

Of Borrowing Stores & Exporting Revenue

Look, I like to save money as much as the next person. And believe me, when I’m walking around in a Best Buy or Fry’s Electronics, I’m checking prices against Amazon.

But, I’m also feeling guilty if I’m checking out a product for a hands-on verification in these other shops that I might buy from you. I feel so guilty that that unless there’s a really big price difference, I’ll stick with them. After all, I like having them there. They give me the one thing you don’t. The ability to really experience an actual product — though with your great return policies, that’s growing less of an issue.

Still, for some people, that 8.25% tax (at minimum, since some counties and cities tack on more), can be a big enough difference to send those in-store shoppers — and in-store testers — heading over to your place.

That’s a pretty nice business to have, isn’t it? Merchants who invest in real stores effectively serve as your stores, too.

Some of these stores guarantee to match your prices, but they can’t beat that sales tax difference, can they? So when you write to me that the new California sales tax law is “supported by big box retailers, most of which are based outside of California,” I don’t really care.

Surprise. While I’m an Amazon affiliate (or was), I actually support those big box stores, too. And even if they’re outside California, they do collect sales tax — which in turn supports my state.

Affiliates Are Also Californians

Oh, yeah. That’s another issue. Not only are you sucking purchases (and thus potentially jobs) out of my state and undermining those retailers, but you’re also not letting the state earn off the sales tax like those retailers who actually are based here do. That makes me feel really good as a Californian.

Now sure, lots of us affiliates here have been earning off of you — and thus ourselves being taxed by California — so the state has been getting revenue from you indirectly. But that brings me back to the fairness.

Collect The Taxes; Fight Without Us Pawns

You could collect the tax, voluntarily. You could keep your affiliates, give back to the state, be more competitive with those retailers here and not cause all this ill-will that’s more about enriching your company than fighting the good fight.

So, Jeff, if you want to fight this, go ahead. But don’t make us your pawns. Take an hour of programming time to make a change to start collecting those taxes, just like you already seem to do in states like New York where you have a physical presence.

I like Amazon. I like buying all types of products from you. I depend on you especially these days for music and video rentals. Don’t make me hate you. Don’t make me seek out an alternative to your affiliate programs or worse, an alternative to buying from you period.

Thanks,
Danny

NOTE: For my search marketing readers, wondering about affiliate links as paid links (which are bad with Google), I usually nofollow these here, in the odd posts where they appear. Older ones might not have nofollow. But Google’s said fairly recently that most major affiliate programs do not need to have nofollow attached to them.

Also, I don’t pretend to understand Amazon’s arguments with California or other states. I claim no expertise in this. Violet Blue has written a nice background piece on some of the issues here that you might find useful. There is also round-up coverage on Techmeme.

While I don’t know the legalities, I do know that affiliates in California are clearly being used by Amazon in a fight it has with their own state. I think Amazon can fight that fight without penalizing them. And it should.

Postscript: See my follow-up piece, Amazon Welcomes Back Its California Affiliates.


Comments

  1. says

    Danny,
    This post captures what a lot of us have been feeling. Unfortunately Amazon has taken this action on a state by state basis. For example, IL got hit earlier this year and I just received my final settlement check (of which Amazon kept $15 for processing).

    While some affiliate organizations have gotten their act together enough to lobby the states against implementing the laws that Amazon opposes, there hasn’t been any large scale movement to put pressure on Amazon to do right by their affiliates.

    It didn’t hurt me much financially either but I don’t plan on buying from them again.

  2. says

    A lot of these large online retailers seem to think they can flout tax boundaries. I guess legally they can. We get it in the UK with lots of companies basing themselves in Ireland, thus avoiding UKs higher tax bands, even though the UK is the market.

    In terms of Amazon Affiliate links, it reminds me of what a lot of larger organisations seem to be doing. Using high street independents or individuals to build their brands and demand then pulling the rug. I can understand the logic, but it must destroy many small businesses along the way.

  3. says

    Here in Denver, and therefore in Colorado, we went through all this months ago. And my first impulse at the time was to hate the state over it [it helped that mine was among the first to try to implement this], developing disappointment with amazon.com secondarily.

    My argument in defence of amazon.com [who could have handled it better; more on that in a minute] is that—yeah—it’s unconstitutional, to date, notwithstanding any [unlikely] future amendments. There’s something absurd about pretending that a company in Washington, selling a product to a guy in Florida, through a website on a server in California, run by a guy in Colorado should have to charge sales tax for Colorado. Of course, that logic made less sense before California caught up to Colorado in begging for taxes.

    Why, on the other hand, amazon.com didn’t just ignore the demands from whichever states, ultimately ending up in court to defend their position, is kinda beyond me. Obviously, staying out of court is usually preferable; but, in this instance, it’s at the cost of keeping a national street team of advertisers. To me, their actions to date suggest that amazon.com are less certain of their judicial success than I am; it almost makes me rethink wanting to have been affiliated with them, if they’re this uncertain of the laws.

    Personally, I’m not out all that much…if memory serves. More and more, netisens are ignoring adverts of any kind, even as endorsements within a review; under stellar conditions, I might be able to pick up an extra ten thousand bucks per year by acknowledging in hypertext that amazon.com have a product I dig, and you should to. So it’s more of a philosophical matter: that we’re being repurposed as pawns in all this. Right or not about the laws of the land, amazon.com could really handle this better in almost any other way.

  4. says

    You’re not pawns. You were simply Amazon’s only “presence” in California. By dropping you, California has no legal leg to stand on. California cannot make people outside of their state obey their laws.

    You can moan about it all you want, but California is basically making a power grab and trying to make everybody obey their laws regardless of whether those laws even apply.

    I don’t live in California. California laws do not apply to me, period. So if they wanted me to collect their sales tax, then bully for them, but it doesn’t make any difference what they want as long as I’m not actually based in California. By dropping the affiliates, Amazon now has no form of “employees” in CA of any kind. Simple as that.

  5. says

    Danny,
    I must respectfully disagree with you this time. I think that Amazon is not only doing the right thing fir itself and it’s shareholders, but for the overtaxed people of California.
    I encourage it to continue on in this fight, and to remove it’s subsidiary and the affected jobs from here in California.
    Not until the legislature see the affects of it’s actions will we be able to crate the kind of change we need.

  6. says

    I think Amazon is right – it is unconstitutional. However, the way they are handling it stinks. Why not collect the tax, like they are doing in New York? That case is winding its way through the court system (and I hope Amazon wins). That said, what really needs to happen is that Congress should act on it – because the constitution says that inter-state commerce (which this is) is the purview of the federal government, not the states. California has no business taxing transactions anywhere except in California.

  7. George Jose says

    Amazon is doing the right thing. Complain to your representatives for this stupid law before complaining to amazon.

  8. Max says

    The post you should be writing is an open letter to the politicians who screwed you by once again raising taxes in a state that is already too taxed and too regulated. Amazon is making a smart move for investors and for the company in general – you are being played by your state government, not Amazon.

    Here’s an idea — do something about it. You say there are 1,000′s of folks in your position — did any of you band together and write your state representatives? The governor? Did any of you band together to vote out the very people that have destroyed the once great state of CA with taxes and regulations? You ARE getting screwed, but that’s because the state once again decided, rather than cut spending and useless programs, to raise taxes to solve their problems.

  9. says

    Nice post Danny. That’s the problem with all these BIG companies. They just look to save their asses and don’t give a damn for the smaller businesses or individuals with whose help they reached the TOP position in the first place.

    Anyways I wish you all the best :)

  10. says

    On an off-note, this posting addresses the dangers of using ANY 3rd party hosted application or service for ecommerce. It does not matter if it is Amazon, Yahoo stores, Face Book e-commerce apps. or hundreds of others available; using these systems puts you in the position of ‘leasing’ versus ‘owning’ your store. And it’s never a good idea to be a ‘web tenant’.

  11. says

    Posts like this are extremely dangerous and are extremely misleading. This entire post shows on the micro “woe is me” affect and completely ignores the macro issues at hand.

    The State of California is probably the worst state in the US in terms of fiscal responsibility. Instead of fixing the glaring economic problems faced by the state, California felt it could go after the affiliate programs and charge its residents yet another tax – a move that is probably unconstitutional. Other states have already tried this approach and Amazon has fought to not screw over its affiliate users, but to protect them, its consumers, its bottom line, its shareholders and other Internet companies.

    I encourage everyone who reads this post to go research the other side of this argument to get a much better, clearer picture of what’s going on. In a big guy vs. big guy battle, the small guys always get trampled, but this post is directing its ire at the wrong big guy. If you want to complain about someone, complain about the worst run economic state in the United States.

  12. says

    >>>Not only are you sucking purchases (and thus potentially jobs) out of my state and undermining those retailers, but you’re also not letting the state earn off the sales tax like those retailers who actually are based here do. That makes me feel really good as a Californian.

    Oh, only AFTER aiding and abetting Amazon for TEN YEARS you catch on to this? Puhleeze. You have no reason to gripe. You have a hypocritical sense of entitlement that’s now been frustrated. I won’t cry for you. Nor should anyone else.

  13. Matt says

    Excellent post. It’s about time more people called out companies for holding people hostage just to get their way when it comes to public policy and politics. There are plenty of people who will whine and complain about politicians, but frankly it’s these companies that will fight tooth and nail to avoid sharing their burden of social responsibility that make these budget problems so messy in the first place. They convince people to hate government because of “useless programs” and brainwash people into thinking governments are “broke” and “can’t afford” to pay their own workers or fix the roads or build schools while they’re building new corporate campuses and offshoring jobs to cheap overseas labor.

    Ask them to take their share and lift their own weight, and the first thing they do is whine about how they’ll have to pass it along to consumers or cut jobs or, in this case, drop the program – making the people suffer in hopes they’ll make politicians suffer, all while they sit on top of ridiculous profit margins and pretty balance sheets and gloat about how well they’re doing on their investor calls.

    It’s ridiculous, and standing up to them is long overdue. Excellent post.

  14. says

    Gotta side with Amazon, here. This is your state’s fault for trying to make Amazon an agent of the state in the collection of taxes that you are responsible for paying. It is not a matter of whether they can automate it, it is about the precedent it sets. Bezos is right on this one.

  15. says

    Your state passed a law that negatively impacts Amazon, but they should continue with the status quo just to keep you happy? Have you pondered the number of extra expenses this adds to Amazon? Say that they keep their affiliates in every state that has passed a similar law, that means they are then having to keep tax records for each state, collect the sums for each, file paperwork with each and so on. Yes, a company the size of Amazon can handle such expenses, but then imagine you’re a mom & pop online store like Billy Bob’s Gun Dog Supplies that is run by three people, and you have an affiliate program. Now you’re having to do everything I just described above.

    The states are the ones in the wrong here, not the companies cutting off affiliates. They are grabbing for tax dollars that are not rightfully theirs to do so. The end user needs to be paying these taxes under the end user tax laws, not the companies selling the products.

  16. Alberto says

    As much as I am sorry for you I do support Amazon and their stance agains thugs is Sacramento. You should have supported it as well.

  17. Mike says

    I was among those who wrote the my reps in California. It fell on deaf ears. Let’s get over the “too-taxed” Californians bit. This isn’t about politics. It’s about states, and not just California, wanting to get the sales tax they should get.

    In reality, consumers should be paying these sales taxes from out of state retailers via use tax on their income tax returns, but no one does that.

    It’s actually stupid on the part of these states. They lose, since they lose income taxes. It seems idiotic for them to pass these sorts of laws (and remember, California bashers, it’s not just CA).

  18. Mike says

    BTW, it’s not just Amazon.com. In the past day Woot and ThinkGeek have announced they are dumping their Commission Junction related CA affiliates.

  19. Offshore Presence says

    Danny et al, there is a simple way around this. Establish your affiliate account’s business presence in another state. You know Amazon has many affiliates (aka subsidiaries) already in California: the Kindle team, the MP3 team, and of course A9, their search engine. Yet somehow these don’t trigger the “business presence” laws. So I followed their lead and set my affiliate account’s mailing address to my parents house. I’m sure anyone can find a friend or relative who would be happy to do the same for them. And honestly in this digital age, you don’t need a mailing address. All of my correspondence (including payments) with my affiliate account is done digitally.

  20. Zeljko Dakic says

    Hi, just one more to support Amazon on this. Arguments were voiced in other people comments.
    BTW, I feel for you over this though and you are right Amazon could show a little more compassion for affiliates.

  21. Greg says

    I presume that Danny has paid the state the sales tax he owes for purchases made online. People are quick to say that Amazon is not meeting its obligations to the state, yet, does anyone want to venture a guess as to how many of the posters here pay California the sales tax they owe for purchases? How many affiliates collect tax from their customers and turn that in? If it is the moral imperative described then shouldn’t the change begin with the person in the mirror?

  22. ethan says

    You may want to channel some this passion toward all the companies that incorporate in Delaware by renting a mailbox to avoid taxes while their actual HQ is somewhere else. Also a physical store has one tax rate to collect. A website would have to have every tax rate in the state (potentially the country), I’m sure that would be fun and easy to set up.

  23. Jay says

    Collectively the voters of states such as California are voting in short sighted tax and spenders. When a company dares fight back, it is the companies fault?
    People need to educate themselves on the effects of taxation on the economy. Every action has a reaction and Amazon fleeing California is the reaction. Rather that raising taxes to meet a level playing field, how about lowering taxes to make the playing field even?

  24. Greg Spira says

    As Otto said above, you are not a pawn; you’re directly involved in this. According to the new law, your existence as an associate translates to Amazon having a presence in California. A number of states have passed a version of this law, and Amazon has pulled its associates program from every one except New York, where Amazon has chosen to charge sales and fight the law in court. I strongly doubt the Associates program is of much value anymore to Amazon (It was when Amazon was starting up, but few people really need pointers to go to Amazon this way), and probably determined that more buyers in California will be driven away if they have to collect sales tax on all their orders than they gain through affiliates. In the end, this is not all that different from other technicalities companies use to avoid paying taxes, though obviously this time Amazon’s customers are effectively being taxed, not Amazon itself (I’m ignoring use tax laws since everybody does). Amazon isn’t doing anything here that’s illegal or unethical. Where I do think Amazon is trying to bend the law is in states where they have distribution centers but are still not collecting sales tax and are threatening to close those centers if they have to collect the taxes.

    Eventually, Amazon is going to lose this one, and they know it. But the company is clearly trying to delay that loss as long as they can Amazon’s stance that they shouldn’t have to charge sales tax is not without merit; local businesses collect sales tax because they use the community’s resources in a way that mail-order and internet companies don’t (This argument about sales taxes was going on long before the Internet; the net has raised the stakes but hasn’t really changed the terms). But Amazon’s argument that charging sales tax would be an undue burden for them is more or less hooey, since Amazon already collects sales tax for its retail partners, such as Target, who clearly has a presence through out the company. However, it might very well be a burden on smaller retail businesses; I think any law should exempt business below a certain size of that burden.

    Another problem is that states can’t require foreign companies to charge sales tax. I can imagine a company setting up right over the border in Canada and mailing packages in the US competing with Amazon in just this way, though it wouldn’t be as easy as it sounds.

    The reality, however, is that the ethical and legalistic issues are moot. The states are losing billions of dollars in tax revenues that consumers used to pay. They have to find a way to get that source of funding flowing again, or they’ll have to raise other taxes or cut services that will save money now but probably lead to higher costs in the future. Congressional Republicans have so far blocked the passing of a bill allowing states to require out-of-state merchants to collect sales tax, but most Republican Governors are for it. Eventually; such a bill will pass, and these skirmishes will be history.

  25. FreshFlow says

    I agree with Jnc. Stop whining. I’m on the side of Amazon for many of the reasons above. If you’re not part of the solution, you’re part of the problem. Unsubscribe!

  26. Tim says

    Amazon just acted in its self interest, which is what any of us would do. It is not in the welfare business. Get over it.

  27. says

    I sympathize with your struggle Danny, but I can’t agree with this. What should Amazon do? Acquiesce to greedy Democrats and their modus operandi – Tax Everything Til Death While Spending Like There’s No Tomorrow?

    Imagine, Danny, if your websites are now responsible for collecting and paying taxes off of ads that your website displays. How much would that eat into YOUR margins – just simply from the time & resources it would take to do that?

    CA, NY, IL and others – ALL Blue states – have squandered their revenue through bureaucracy upon bureaucracy and raped by gov’t union thugs like teachers. For years, nay decades, it was all about spend now, pay later. And during the last 2 decades that formula worked because the tax revenue kept coming in.

    Now that the Reaper has come, that it’s time to reap the whirlwind, suddenly these greedy Democrats have to pay up. But instead of making sacrifices, they try to dig into other people’s pockets.

    YOUR Californian Democrats stole the money from YOUR pockets – not Amazon. And Amazon clearly believes that sacrificing YOUR valuable links and SEO-value is worth it in the long run.

    Let’s not forget that now that they are public company, they owe to shareholders more than they owe any loyalty to you.

    Perhaps you can find solace in buying AMZN stock. You could probably drop 1,000 shares at a time and not blink an eye right? You might find comfort in AMZN stock price rising, thanks to profit margin protection by NOT succumbing to greedy blue states like CA or IL.

    Or you can pull a “FatWallet” and move to a tax-friendly state. A propos – FatWallet moved from IL to Wisconsin after IL and their greedy Democrats passed an Amazon-tax.

    I applaud FatWallet for doing what many small businesses should do – operate out and away from tax-happy yet debt-ridden blue states.

  28. David says

    I love spending money in California and tip generously when traveling there several times a year. However, since I live elsewhere, I refuse to pay sales tax twice on my online purchases.

    Jerry Brown has little understanding on market forces and should concentrate on improving commerce, not stifling it.

    Amazon is doing the right thing.

  29. Ken Jackson says

    Danny, I think you’re wrong here too. If the state wants to say that affiliates require them to collect sales tax, by passing a new law (that is clearly targeted at Amazon), then Amazon needs to do what makes sense for their business.

    At the end of the day tax revenue for California should not change. Residents of California still owe the same amount in taxes, and if the residents of California aren’t paying it, the state should crack down on the residents.

    At the end of the day this isn’t about tax revenue, but rather if Amazon does the job of the state, despite not having a presence in the state.

    And Danny, lets be clear. Amazon never made you pawns. The state did. Amazon would never had brought this up at all if not for the state creating a law effectively targeting Amazon.

  30. Paul says

    While I understand your anger, it is completely misdirected at Amazon. As a person who has built and run many businesses, I can tell you that they have to take these types of actions in order to stay away from being liable with such idiotic laws like the one just passed in California.

    Amazon cannot fight their fight on a national level is they simply just collected the taxes in California. They have to stand by the principle. As in any war, you end up being the collateral damage. It sucks and it happens whenever the ones in power (the California legislature) passes a law that is so anti-business that it forces any business to change the way they operate.

    You have gotten it off your chest now, but I urge you to pull together the troops (affiliates) using the power you have (a great following) and work with the California legislature to undo this law. That is your only option. Amazon’s hands are tied until this is decided on a federal level.

    You do have the power to change the government. Please take advantage of it!

  31. Barry says

    Go Danny, standing for the small guy!

    Now if you just can get your nose of Google’s @ss and ask them some questions about destroying many innocent small sites with Panda and deliberately favoring big brands.

    Funny you like “small guys” when your $$ is at stake.

  32. Roger says

    I’m probably the only Californian who puts $0 as use tax on my tax return and is not lying! The reason is I only do online shopping with places that do charge California sales tax. That means I am not an Amazon customer.

    California is messed up, the sales tax system is messed up, but the law is the law.

  33. Barry says

    Why are you censoring comments Google ButtBoy?

    And why aren’t you paying the use tax to California? You are supposed to.

  34. epobirs says

    Otto is correct. This isn’t about treating CA affiliates as pawns. It’s about the law thelegislators wrote and the entirely predictable consequences of that law. This is completely typical of the brain-dead CA legislature and why this state is circling the drain while still containing and producing tremendous wealth.

    Let us be honest here. You happily avoided CA taxes for seven years and only became concerned about losses to the tax base when your own losses were also involved. CA, taken as a separate entity, is one of the world’s major economies, ahead of the majority of sovereign nations. Yet it cannot manage it’s own operations. This in business is when everybody in charge gets canned and a new team takes over. Unfortunately, votes are handed out to everyone who has managed to have a heartbeat for more than eighteen years.

    Amazon is only the latest in a long line of businesses to be driven from this state. The people running things should realize something is terribly wrong when it makes more financial sense for me to buy from Amazon than from Newegg, a company less than sixty miles from my front door. (I’ve had many occasions to drive over to Newegg when we needed something RIGHT NOW but at nearly 10% sales tax in this state and county I can usually wait a few days for Amazon to ship it for free. [Which cannot be ignored with the state of fuel costs.])

    Attacking Amazon is avoiding the real problem, which is high taxes and gross mismanagement. In a more reasonable tax regime my likelihood of going to Amazon instead of a local retailer is greatly reduced. The more of a bite for tax the more I’ll seek to avoid paying it all. The result? Reduced revenues instead of increased revenues.

    A lot of the phony budget Brown just signed is dependent on imaginary increased revenues. This state’s problems are only getting worse.

  35. Mike says

    Oh for God’s sake, I hate posts that make this a red-blue thing. AK Workds, this same action is being thought about if not done in Red states, too. In fact, most states with Sales Taxes are considering it.

    Offshore Presence, doesn’t that mean you now have to file a state income tax return in that other state now? Unless it doesn’t have state income tax.

  36. Kent Johnson says

    Amazon is doing the right thing. The State of California is in the wrong. Focus your energy in the right place.

  37. Charles Taylor says

    Wow!! The state of California shows zero ability to reduce it’s out-of-control spending, goes to great lengths to further treat it’s citizens (including the companies that do business there) as endless ATM machines and Amazon is the bad guy?!

  38. James says

    Just casting my vote for Amazon in this case. Thought provoking article and great (civil) conversational thread here though.

  39. RAG says

    First, this is not a new tax. Consumers are supposed to pay state sales tax on all purchases (if your state has a sales tax). Because consumers generally do not do this, states such as CA require businesses to collect the tax and remit to the state. So comments about CA being fiscally irresponsible have nothing to do with this issue. So if you want to be a good Californian (or any other state), if you buy something from Amazon or any other Internet site, pay the state your sales tax.

    Second, Amazon’s constitutional argument may not be as strong as everyone thinks given the number of states’ rights politicians in Congress and the U.S. Supreme Court’s recent inclination to ignore precedent that has been around for years (just my opinion). The U.S. Supreme Court has ruled that, to prevent disruptions to interstate commerce, a state may force only those businesses with a “substantial connection” with the state (“nexus”) to collect its sales tax. Otherwise, businesses would face an enormous burden of complying with over 8,000 separate sales tax jurisdictions, with ever-changing bases and rates. Thus, only businesses with employees or property in a state usually collect a state’s sales tax, even if the employees or offices are not directly involved in soliciting sales in the state. Whether the justifications announced in these cases still hold is debatable given the use of ever more powerful computers–thus, the U.S. Supreme cold take a new look at the issue and decide otherwise.

    Moreover, even though there is a hugh anti-tax rhetoric in Congress, I am sure those same people will be in favor of using the Commerce Clause to require business to collect state sales taxes and remit to the states.

  40. says

    Again, thanks for all the comments, everyone. Wrote this post late last night, just got up and like I said, wow. I appreciate all the feedback, regardless of where you stand on the issue.

    Ben, Craig, Gremlin, thanks.

    Otto, Amazon does actually have subsidiaries in California with real, honest to goodness employees. But set that aside. Absolutely, the affiliates are pawns here. Pawns by the state, I should add, too. It’s using us as leverage to try and make Amazon collect sales tax. But Amazon is using us, too. And with little notice to us, and not because it necessarily has to. It could collect sales tax, hold in escrow as it apparently does in New York, and fight this on behalf of itself and its affiliate. Instead, it appears we can be tossed to the state wolves, and Amazon will “save” itself. I don’t think it has to go at it that way. That’s my view.

    George, I don’t think it’s necessarily a stupid law. As I said, I think there might be some good reasons why online retailers shouldn’t get a break over the real retailers that many communities depend on. Of course, if the communities want to keep buying online to save, even if that’s from merchants who can undercut their local merchants, then I suppose they have it coming to them if those business go away.

    Max, here’s an idea. If this is a bad law, perhaps Amazon — which has a real stake in this — could have organized those affiliates. Sending a note to them 9 hours before the law was to be signed saying “hey, this might happen and if so, we’re dropping you” isn’t doing much to stick with those affiliates.

    Hagrin, there’s no “woe is me” there. This totally is not how I earn a living. The loss of my Amazon income here simply is a non-issue to me from a financial standpoint. I explained this, but I’ll say it again. I simply don’t like the way Amazon handled it. I also encourage people to research it more. That’s why I deliberately placed that note at the bottom with links to other articles.

    Mike, I didn’t ask you to cry for me and already admitted that I and other affiliates helped Amazon take income out of the state from online merchants. But as I also explained, we still helped keep some of it here through our taxes that we paid. Now, none of that is happening. We won’t get taxed, and the money still flows out. Which, of course, is why some who support Amazon think this was an incredibly dumb law. It may indeed be that. But I think Amazon could have fought it much differently, in a way that didn’t treat its affiliates as some type of expendable children to be tossed to the wolves.

    Colin, as said earlier, think they could fight it in another way.

    Sean, my assumption is that Amazon affiliates in California have earned plenty of money for the company. I think they can afford the expense to collect sales tax, as they already do in some other places.

    Mike, yes, thank you.

    Offshore Presence, I’m not interesting in getting around it. It’s not a financial issue to me. I’m sure other affilates that really depend on it will do so. I hope the smaller ones but big enough that it’s their main living understood this was coming and took actions rather than got broadsided from the Amazon email yesterday.

    Greg, no, I didn’t. If someone wants sales tax from me, they can collect it when I made my purchase.

    Jay, the voters might indeed discover this. Then again, I think the number of Amazon affiliates in California is only 25,000. That’s a tiny amount for a state with 40 million voters. The bigger issue really is whether this will generate more income from sales taxes versus the loss of income tax on those 25,000. I have no idea.

    Greg, thank you.

    AK, I would have Amazon collect the sales tax and hold it in escrow as they fight the law. They apparently do this already in New York. I’m aware Amazon owes its loyalty to itself. It’s another thing to get a letter from them that makes that so painfully obvious. And encourages me to keep buying from them :)

    Ken, affiliates as I said in comments above, are absolutely pawns by both sides. But if you’re going to be a pawn, it’s easier to fight for your side if your side is still behind you. Amazon effectively told its affiliate “good luck” and cut and ran. Some of those affiliates may scream loud and get the law changed — but still be out some lost revenue. Some might move in a way to stick with Amazon. But I guess I expected more from Amazon.

    Barry, I asked Matt Cutts exactly that about Panda earlier this month. I’ve asked Google about it many times before. I’m not standing up for the “little guy” in this. I’m standing up for how Amazon, a company I like, is behaving in a manner I don’t like.

    As for censoring comments, I’m not. I wrote this. Went to sleep. Just got up and am now coming to these comments. All comments go through Akismet, which automatically filters comment. I have no control over what it grabs, as anyone who uses Akismet will tell you. I went through after your comment, scrolled through 150 real spam comments and found exactly one comment for this post that Akismet also caught. Freed that up. If you see others caught for some reason that you think are missing, let me know, and I’ll check again. And you can call me “buttboy” if that makes you feel better. But I don’t think it makes you look better.

    Epobirs, I’m absolutely, positively not only concerned because I had “losses.” My losses in this are virtually nothing. Moreover, I lived outside of California for years but deliberately continued to pay income tax to the state because of a home I still had here, even though legally, I probably didn’t. But it wasn’t worth trying to dodge paying that income, and call me crazy, I figured it helped others in the state. So it’s really, really not about some economic income loss I’m suddenly feeling. I just don’t like the way Amazon handled it.

    Kent, this is about all the energy I plan to focus on this. This is more a “get it off my chest” post.

    Thank you again everyone for your comments, regardless of where you fall in things. I’m clearly not happy with Amazon. That doesn’t mean that I think the state of California is necessarily right or smart in take the action it did. It’s perhaps very, very stupid. But I think Amazon could have handled this better. I don’t expect that much from government, which is sad, but I do expect a lot from Amazon.

  41. Chris says

    I’m in California, and affiliate and don’t consider myself a pawn. I think Amazon was trying to do everything it could to make this work, it didn’t. Would you have kept quiet if they won and no taxes would be collected?

    You seem to have that all to general mentality of “it’s all their fault, they’re the ones to blame.” Look, it happened, deal with it. Quit your whining. It is what it is.

  42. JS says

    I am tired of “big” companies being accussed of “avoid sharing their burden of social responsibility”. What does that mean?? They provide jobs, they contribute to charities, they offer and provide healthcare, work with local school districts/charities, c’mon.

    Governments are broke, not just State but the country of Greece is about to topple because of promises made that cannot be kept. CA isn’t exactly solvent is it?? Keep dumping on the poor people of CA and they will leave.

    Brainwashed?? Puhleeaz….. As a teacher I know that my retirement is not fully funded. Streets and roads in this state are some of the most lousy in the country. But, We do not pay near what the great people of CA pay in taxes, or for gas.

    The money is there it’s just going to the wrong places. I am glad I have a wife that works for a big company and the pay/benefits they provide my family. The work they do in our community is wonderful. I sleep well at night know I am personally “socially responsible” by paying Federal/State/County/Local/Property/Sales taxes.

    I agree, it’s ridiculous, and standing up to them is long overdue. But the “them” are the politicans.

    Have to back Amazon on this one.

  43. says

    I couldn’t disagree with you more. It is absolutely right for Amazon to fight this tax policy as this tax setup has been ruled unconsitutional numerous times. Your arguements of ‘fair’ seem to forget that *it will not be Amazon paying the tax, but rather the customers who will be charged [wrongly] more*.

  44. says

    This gets back to the integrity of affiliate links. Are people promoting the vendor and the product because of the quality of service and value, or because they’re getting paid to do it?

    I like Amazon on a lot of levels. I’m sad that the program is over, but I understand their position and it doesn’t deter me from referring business to them, or continuing to buy from them.

    Dave

  45. says

    Chris, I think they handled it badly. As for moving on, believe me, writing this up was getting it out of my system. My life doesn’t depend on getting my 4.5% cut from Amazon. I’m lucky, in that. Others who’ve helped support Amazon aren’t so lucky. But if it works for you, and you’re not bothered, honestly, that’s fine.

    Luke, yes, it would be right for them to fight it. They’re not. They’re just getting out in order not to have to fight it or collect. And no, I don’t think it’s unfair for customers to pay sales tax.

  46. says

    It’s interesting to see how many cite their opinions of California’s political system as reasons not to collect sales tax on purchase made to residents of that state. I’m a happy Amazon customer most of the time, but would prefer that they collected sales tax, and I prefer to shop at online stores that do collect it. It’s my obligation to pay a sales or use tax on the purchases I make, and Amazon’s system just shifts the administrative burden onto me. I’d much rather pay it at the time of purchase.

  47. says

    Danny – As I said, yes, Amazon can afford it, but what about the burden to small businesses that use affiliate programs as their advertising as I mentioned?

    It is the law that is broken, now Amazon.

  48. says

    Sean, I believe there was a provision in the law to help small businesses based in the state opt-out. And I totally agree, there should be something like that — or something improved — if it’s not already there. Small businesses especially need that type of help.

  49. Ross says

    “I don’t pretend to understand Amazon’s arguments with California or other states” says it all. Shouldn’t you understand the California law and the legitimate questions about its constitutionality before you write a long-winded rant that goes so far as to suggest a frivolous class action lawsuit against Amazon that would only clog up the already overburdended court system and cost taxpayers money?

    I’m sure you’ve made purchases from Amazon over the years, and you’ve been paying California income tax. So let me ask you this: have you declared your Amazon purchases on your California tax return and paid use tax? Up until the passage of this law, Amazon was not obligated to collect sales tax in California, but California residents purchasing from Amazon were required to pay use tax on their Amazon purchases. For you to credibly rant about what’s “fair”, I think your readers deserve to know whether you paid use tax on your purchases from out of state retailers.

  50. says

    I have to admit, this post by Danny was really good and pulled some emotional strings with me. I just previously moved back from California and have taken a close look at what’s going on here. I have thought about moving back to California in a couple years and this has honestly made me recalculate any possible moves. After reading Danny’s post I was ready to scream at Amazon. After reading the comments I think I’m back on the other side. I really do feel this is unconstitutional and a power grab by the state of California in a moment of budgetary crisis.

    Either way, with the size of California this is going to really make some major decisions happen quickly.

    I have to admit as well, this isn’t just about Amazon. I have received 5 other affiliate cancellation notices from other affiliate companies & the companies using them because I still had my California address in there. I quickly changed it to my Kansas address and I’m crossing my fingers that Kansas doesn’t fall to California money power grab tactics.

  51. says

    Sales tax must die. Really.

    There are four basic ways that governments can raise money: income tax, property tax, sales tax, and fees. Sales tax is the worst of the four; its effects are regressive (it tends to hit poor people hardest) and it suppresses otherwise beneficial economic transactions that should happen.

    The unevenness of sales tax causes a race to the bottom. Here in New England where the states are small, places like New Hampshire try to get a retail advantage by not having a sales tax. In California it’s not feasible for most people to drive out of state but online retailers occupy the same niche.

    The final problem for online retailers is that collecting sales tax would be horrendously difficult. It’s not just a question of collecting different taxes for 50 states; there are also all the county and city taxes to worry about. Even figuring out which taxes would actually apply to a customer is not a trivial problem (city and town boundaries don’t always match postal boundaries, so the name of the town on the address and the ZIP code are not definitive), let alone collecting all of them and paying them to the relevant authorities.

    The best way to level the playing field is not to levy sales tax on online retailers; it is to eliminate sales tax as a way of raising government revenue. At the very least we should eliminate it on physical goods; taxes on restaurant meals and other location-based services are a separate discussion.

  52. says

    Ross, I understand that Amazon has an issue with the state. I don’t know who is right. I understand enough to know that Amazon could fight this without dumping all of its affiliates. I’m not seriously suggesting there should be a class action over this. That was hardly the point I’ve made. I do think Amazon could have fought this, should have fought this if they really believed it was wrong, and done so in a way to maintain a relationship with its affiliates.

    I also already answered the sales tax question. No, I haven’t paid sales tax on anything where sales tax is not asked for. Practically no one does. Which is the main reason for the law — it makes much more sense to have merchants collect at the point of sale than to depend on millions of consumers to dig out receipts and keep a running total, much less know if sales tax is owed on a particular purchase — and until the law was passed, there was no sales tax owned on Amazon purchases.

  53. says

    Danny, I think you did hit a point that I don’t see emphasized enough.

    Amazon gave very little notice for anyone to constructively react, and the original email read like the actual termination notice.

    - Dave

  54. says

    The next person who says “quit your whining” deserves to be slapped. Danny has started a great discussion on a very important issue. Thanks, Danny.

    I see both sides of this issue. I’m upset with CA legislators for lacking the foresight to see that this half-assed attempt to tax amazon would only end up hurting CA affiliates. But I am also upset with Amazon for not engaging, informing, and empowering it’s affiliates to help fight this law. I’m sure yesterday’s email blindsided a lot of affiliates and I doubt they will change their links any time soon. Amazon will make millions in sales through affiliate links, but won’t be paying any commissions on them. Nice.

  55. says

    Amazon’s move is going to damage me and it makes me really made.

    I have thousands of Amazon links on music-focused sites I’ve developed over the last ten years. Now I feel like they’re ripping me off and I’m considering killing some sites. For examples, I’ve tracked new hip hop releases on one site for over 5 years. It’s the only archive of its quality available online. If I can’t kill the amazon links, I may just kill the archive.

    That would make me feel bad and regret all that work but I’m moving on to other projects and I don’t like regular reminders that I’m getting f*cked over by a company I’ve supported for many years.

    I think they just need to suck it up and start paying their taxes.

  56. says

    David, yes, thanks. The issue of notice seems lost by some.

    Justin, thanks. Though while I wouldn’t slap them, I didn’t feel I was whining about anything. “Quit your whining” to me comes across that someone really hasn’t actually read the piece.

    I think Amazon could have handled this better. I think there are ways it could have maintained the affiliate relationship and fought the new law which, if it’s really wrong, might be nice to have a major corporation actually take on. My views, but life goes on. I’m sure not crying about it :)

    Joe, yes, mostly. But I don’t see this as a Democratic versus Republican issue. Whether sales tax should be charged in general, maybe. But for me, the core issue really is:

    1) Could Amazon have fought against the law without effectively abandoning its affiliates.

    2) Does Amazon have an unfair advantage as a retailer over other retailers, since it doesn’t have to pay a sales tax.

  57. says

    Ah, that hurts to hear Clyde. There’s money out there for someone who can create a wordpress plugin that takes amazon aff links and monetizes them some other way (intext ads or a different affiliate program).

  58. matt says

    I think my math is right… 4.5% X $150K = $6750

    That’s not a lot of revenue over 7 years… but then again, money is money, i guess.

    Just let it go, Amazon’s affiliate program sucks anyways. It helped them years ago to grow to a giant, but now they just don’t need you.

  59. says

    Justin, Viglink and Skimlinks are possible options. I wrote about Viglink here:

    http://searchengineland.com/viglink-fire-forget-solution-to-turn-outbound-links-into-affiliate-earners-33315

    It covers how Skimlinks generally works, too — which is to take existing links and turn them into affiliate links.

    The problem for Viglink is that it is based in California. So it’s an affiliate, a super affiliate if you will, that just got terminated. Not sure how the situations is with Skimlinks.

  60. Ross says

    “I also already answered the sales tax question. No, I haven’t paid sales tax on anything where sales tax is not asked for. Practically no one does. Which is the main reason for the law — it makes much more sense to have merchants collect at the point of sale than to depend on millions of consumers to dig out receipts and keep a running total, much less know if sales tax is owed on a particular purchase — and until the law was passed, there was no sales tax owned on Amazon purchases.”

    You have been required to pay use tax on purchases of tangible personal property that will be used in the state of California. The use tax law has been in place since 1935. The fact that others don’t obey the law, or that having to calculate what you owe would burden you more than you’d like to be burdened, is no excuse for your individual failure to obey the law.

    It’s interesting your concerns that Amazon is “sucking purchases (and thus potentially jobs) out of my state” and “undermining” local retailers only came to surface after Amazon informed you that it won’t be cutting you checks.

    But that notwithstanding, if you want to argue that Amazon is being a bad corporate citizen, I would challenge you to do the “fair” (and legal) thing: calculate and pay the use tax you admit you have not paid to the state of California.

    Only then will your rant have any credibility.

  61. California Budget Whoahs says

    From Danny – “I don’t expect that much from government, which is sad, but I do expect a lot from Amazon.”

    Therein lies the greates problem. Amazon could go bankrupt tomorrow and it would be but a blip on the radar. The government failing would be mounmental. Your take on this is completely backward. Yes, affiliates got screwed, but its because the state has finally hit the wall with taxpayers. They soundly defeated extending the tax increases, and are overwhelmingly against them. Today is the last day we suffer them (thank god).

    The current budget is based on $4 billion of smoke, mirrors, and gimmicks. The Amazon affiliate deal is one of the gimmicks. Te state knew what would happen, but they did this anyway so they could have a line item on their budget (which will only add to next year’s shortfall when they don’t collect anything and affiliate don’t pay income taxes on their earnings).

    The government is failing and driving business out of the state, this is happening on a large scale and is driving business out of the country. When Mozana starts shipping for the same price but is based in Canada will we start attempting to tax international business too?

    Who’s social contract with the public is more important, the government’s or Amazon’s? We are being failed by our government, and you are more upset that you felt that you weren’t treated nicely by Amazon. Sorry, but I think your priorities are out of whack.

    That being said, yeah, Amazon could have done a better job :-)

  62. says

    Yeah, Matt, it’s not a lot. That’s what I keep saying. In a given month, it affiliate fees earn maybe $300 to $400. I don’t depend on that money. The loss won’t be a problem at all for me. I’m fortunate to have a real job that pays my bills. For affiliates who depend on this as their real job, life just became very tough.

    Ross, if my rant doesn’t have credibility with you, that’s fine. I’d suggest you move on then, rather than waste your time arguing with someone who apparently raised no important points worth discussing.

    To my understanding, Amazon purchases have not been subject to use tax because Amazon is outside the state. But if they were, or if other companies have been, then I expect them to collect it. I think it’s an unworkable system to burden consumers with trying to figure out what taxes they owe on various purchases (remembering that some items like foods aren’t subject to taxes at all).

    I literally have no way to figure out what possible use tax I might possibly own to the state of California on purchases from merchants outside the state — what was actually expected to be owed an so on. Sorry if you don’t feel that gives me any credibility.

    I will say that despite living outside of California, I continued to pay California state income tax because I maintained a home here, despite the fact that I probably wasn’t required to. Certainly those taxes I paid wouldn’t have entitled my children to tuition-free education in the state if we’d come back, not until we reestablished a year of residency. There are a number of other benefits I did not get, either.

    I paid it, and it was significant, because I felt it was both the safest approach and I could afford to. I could afford to pay that extra in taxes to help support my state. So I did.

    No one likes paying taxes. I sure as heck wish the state would figure out a way to do more with the taxes it already collects. But that’s a different argument.

    For me, I think Amazon has grown on the backs of real businesses in states all over the US, where it has a potentially unfair internet tax free advantage. It’s not an infant company. It no longer needs that type of protection.

    I also think that if Amazon disagreed with the law, it has the deep pockets to fight it — and could have done — without tossing its affiliates aside.

  63. says

    California Budget Whoahs, I’m not happy with the budget mess at all. Writing about this doesn’t mean I think this is a bigger priority. I also agree that it seems much more about smoke and mirrors. Darn right, I’d like our politicians to come up with some real solutions to the budget problem. Which, apparently, isn’t just a California problem but a US one, not to mention one that’s hitting countries around the world :)

  64. says

    Thanks for posting this.

    I’d say it’s time for Amazon to grow up and be a good citizen, but that’s years overdue.

    There’s no question that they’re using what amounts to a loophole to gain unfair advantage over local retailers (not all of whom reside in big boxes).

    I’ve been an Amazon affiliate for years, but never got around to posting the links on my community news site, mainly because I live in a small town, and I support my local retailers. I also buy a ton of stuff from Amazon, but I’m not going to actively support the gutting of my downtown.

    I have no sympathy for all those affiliates chasing “passive” income. I have a lot of sympathy for those affiliates who work hard to provide their readers with real value and are trying to make a go of it online. But they should be looking to Amazon for relief, not Sacramento.

  65. Dave says

    I see many of the commentators feel that the CA legislature suddenly woke with a hair brained idea and implemented it heedless of the consequences to all. These commentators show no respect for the legislature, politicians, nor the political process. They have no sense of the history of how we got to this point and why action needed to be taken to rectify a long overdue inequity.

    Sales tax income to the states has been steadily eroded by the development of digital commerce, commerce that has been able to take advantage of a tax loophole in interstate commercial transactions. This has been going on for well over a decade by this time and over this time has become a major drain of resources for the state.

    Business is always about finding a way to maximize profits and finding hidden advantages to exploit in the competitive market so it is natural that businesses in digital sales would take advantage of their position by not paying sales tax until they absolutely could no longer avoid it. I understand. Business is always done in a context of laws outlining your obligations so if you can circumvent taxes legally then that is what you would do, makes sense for that business.

    Blaming CA for bad business practices by forcing these businesses to pay their fair share of sales taxes is the most disingenuous whining imaginable. Really, do you get to chose when you want to pay taxes and when you don’t want to pay taxes? Do you feel that somehow you are entitled to all the tanglible and intangible benefits of public infrastructure that supports commerce here without paying for it? I hear complaints about “the welfare state” from the same people who are more than willing to accept assistance from the commercial infrastructure that is integral to their ability to do business here. Hypocritical! Disgusting! Grow up and share the responsibility you owe the state of CA for doing business in this state. What makes you so priviliged that you are singularly qualified to avoid your responsiblity?

    I read how hard it would be to set up sales charts for all 50 states (or is it more like 45 states that charge sales tax). Ah, let me see. I’ll bet I can set that up for you in about 2 hours. If you are already collecting for the state of NY then just copy and paste the formula for collections and payments and substitute the correct sales tax numbers for the other states as well as the addresses of that you send the payments to and voila – problem solved! That is just another example of a trumped up red herring argument used by irresponsible self entitled people who would rather fan the flames of fear of evil, inept, or corrupt govenment than to look into their own vacant souls and ask themselves some really hard questions.

    It is unfortunate that we as a people no longer see our interests as best served in common with each other but instead choose to grab all we can for our personal gain without regard how it affects others around us – that’s none of our business now. Nobody wants to pay taxes but taxes are how we fund our common business interests, whether we are in business for ourselves or serve in businesses owned by others.

    Sorry to blow so hard but it is irritating to hear people pontificate so self righteously as if they represent “business” interests when in fact they are reflecting their own narrow selfish interests without regard to their impact on others. Fair means fair for all without exemption for the privileged.

  66. Richard Dahl says

    As a California Contractor working in every County within the State, I would like to DEFEND Amazon’s outlook on Filing and Paying California State Sales Tax.

    First of all, there is a Basic California Sales Tax Rate; there is 58 Counties with their additional Sales Tax Rates; and there are 91 additional City Sales Tax Rates. The Quarterly filing of California State Sales Tax requires the maintenance of 149 different Sales Tax areas with their independently kept Gross Sales, Sales Exemptions, Taxes Collected, and Collected Taxes Submitted. THIS IS A PAIN IN THE ……. that I as a Calfornia Contractor must endure and I Totally understand why Amazon does NOT want to collect Sales Taxes and make the Quarterly Tax Filings.

    The “Big Box” stores have ONE location that pays Sales Taxes for ONE of the 149 State wide locations – each store is responsible for its Sales Taxes even if they are grouped together in Regional groups, which probably number less than the 149 Sales Tax groups within the State of California.

    Internet Sales Business should pay ONE Sales Tax amount of 5% (or what ever amount) to every State that requires Sales Tax be paid on merchandise shipped INTO their State! Having to pay sales tax of varing rates (149 of them in California) for each of the 51 States; plus Counties; plus Cities would be an accounting nightmare. Of course, it would “Create Jobs”.

  67. 4Gs says

    California Budget Whoas said:
    “We are being failed by our government, and you are more upset that you felt that you weren’t treated nicely by Amazon. Sorry, but I think your priorities are out of whack. … That being said, yeah, Amazon could have done a better job.”

    Well said! I am begging my husband to let me sell the house and move our two sole proprietorship businesses to another state. I’ve had to stop promoting my business in favor of looking for employment just so we can offset the deep taxes CA collects from my husband’s business. I don’t know how much longer we can hold out, because you can’t ever get ahead if you’re a business owner in CA.

  68. Don says

    RAG, the 8,000 jurisdictions collecting sales tax is not that big a deal. There are companies that provide a service to online websites that keep track of the different rates.

  69. Kevin in CA says

    It seems silly to assume people will do the “right” thing and pay use taxes. If the big-box stores didn’t collect sales tax and instead the philosophy was that individuals were supposed to keep track of what they bought and then pay it yearly with their taxes, what % of sales tax would actually be paid? I imagine a very low %.

    I’m all for online sites being required to put in the appropriate measures to properly collect sales tax (if required) and distribute it back to the state. I like what was stated for small business exemptions as well, although over time I would think the exemptions are lessened.

    Amazon cutting off affiliates seems like the wrong approach and I fully agree with Danny that at a minimum, the way they handled this was far less than ideal.

  70. Simonts says

    I fully agree with you!
    Mr. Bezos: I bet that an disproportionally large percentage of your loyal customers are from California, like I am. It is a VERY stupid business policy to alienate them. Given that we have to pay the sales taxes to the CA treasury anyway it will not make any difference for us financially whether we pay it to you (i.e. the simple, easy way) or at the end of the year to the CA Franchise Tax Board (the much more inconvenient way for us, your customers). So, for this one time Mr. Bezos, do the right thing and add CA sales taxes for CA customers. It is THE RIGHT THING to do.

  71. says

    Danny, thanks for your post and the follow up comments. The bulk of our customers use our search monitoring service to police affiliates running unauthorized PPC ads. Our customers include Amazon and many of the companies that are now dropping CA affiliates. So, while these laws aren’t direct impacts to our business, we follow them as they impact our industry. There were a few points in this discussion that I wanted to note:

    1. This happened very rapidly. Industry expectations were that this issue would likely tail into September. In IL, the bill was proposed and signed in a two day window – while the affiliate marketing industry was holding its largest conference of the year (Affiliate Summit in Las Vegas). You can see more about the organizing efforts of the industry here: http://performancemarketingassociation.com/category/state-legislation/2011-internet-tax-updates There have been efforts to lobby Sacramento, but my sense is that the speed of passage and subsequent signing was unexpected and caught the industry off-guard.

    2. Amazon has been very clear about their reaction should this law pass. While this might have been the first you’ve heard of it, they’ve taken the same action in several other states, and Bezos has publicly said that they would continue to terminate affiliates. The grass roots lobbying has been handled by the PMA and this is exactly the outcome. In most other states, there was a much longer time between the proposed bill by the state congress, the passage of the bill and the subsequent signing by the governor and that is usually in those stages that active grass roots campaigns were run.

    3. Amazon is fighting this in court. Their challenge to the NY law is currently at the appeals court level and many expect it to go to the supreme court. Since their argument is a constitutional one, I’d expect that they want to focus their resources on this one case that would then invalidate the state-by-state patchwork of laws.

    4. While this discussion centers around online retailers, catalog retailers are the original large businesses that have not had to collect sales tax and much of our existing law has been defined around their businesses. While the catalog companies aren’t caught up in the affiliate nexus laws, I think many people adopt a slightly different perspective when they realize that this isn’t really a new problem.

    Anyway, I just wanted to provide some additional perspective on this process from a semi-inside viewpoint.

  72. Charlie Rangler says

    Danny,

    If you purchase a product from an out-of-state retailer for use in California you owe use tax. See http://boe.ca.gov/pdf/pub79b.pdf. Calculating what you owe is not rocket science.

    Clearly, given that your tax strategy appears to be “Pay taxes I don’t owe, and don’t pay taxes I do owe,” I think you would be wise to retain a better accountant.

    If somebody from the Board of Equalization sees this post and your comments, you will probably be on the receiving end of an audit. “I didn’t know” or “I was misinformed about the law” does not eliminate the tax you owe or the penalties you may have to pay, unless of course you’re a member of Congress.

  73. John (Los Angeles) says

    what’s 4.5% of $150,000? Well, obviously it means nothing to you. You obviously do understand little about the constitutionality argument, because of your glib address in your letter. I mean, seriously, who cares about the Constitution anyways??!? (Only Congress has authority to regulate interstate commerce and the supremacy clause, start with those two concepts to educate yourself.)

    You didn’t like the short notice? Obviously you’ve been living in a cave for the past 4 months when this issue first hit the national debate. Every major newspaper in California reported that the Democrats were considering this. (Google: “California Amazon.com tax” and you’ll see plenty of archived articles.) Maybe your profession doesn’t require you to be up to date with the political and financial happenings. What do you do again?

    Yes, Amazon.com will surely miss your advertising business. I mean, they sold $150,000 in 4 years. Even to a multi-billion dollar corporation, that’s no small change, really. And I’m sure they’ll also miss your purchasing business. But if Amazon charges sales tax, don’t you think they would miss me more?

    “Fairness?” Bestbuy and Sears chose to set up shop in California. They have physical presence here. They can easily move out and become another Amazon or Overstock. But their business model obviously showed them that their profit is maximized having physical presence. So they cater to the none-online savvy shoppers (this is a huge segment of the consumer base). Amazon.com’s business model chose to keep themselves out of the non-online consumer base and chose to stick with me. This is a business decision. Wait, what do you do again?

    “Fairness?” California has no authority to charge a sales tax for a purchase contract made in Tennessee or where ever the contract is made, if it’s made outside of California. Is it fair if California tries to charge a tax or fee when you stay at a hotel on vacation in New York? “Well, but you’re physically in California when you made the deal!” So what? Amazon isn’t. What is California to Amazon? The contract is made online in Tennessee. Amazon then puts the good in a box and UPS delivers it to California. California’s border ends before Oregon, Nevada and Arizona. It doesn’t extend into Tennessee or any other state. California has no authority to compel a non-California company to do anything. Only Tennessee and the Federal government does.

    What do you do again?

  74. James Butler says

    Danny, I am completely behind you, even as I wished you had never become an affiliate in the first place due to the “can’t-tax-us” model Amazon and almost every other online retailer adopted.

    Californians who buy from Amazon should have to pay California’s sales tax, contrary to the weird claims made by many in this comment thread.

    Quick complementary story: Many years ago, a little town in Vermont, right next to the Connecticut River that separates Vermont from no-state-sales-tax New Hampshire, was a picturesque New England town with hundreds of buzzing mom-and-pop businesses, including hardware stores, clothing stores, supermarkets and more. One day, the people of the town across the river from them in New Hampshire elected to invite Wal-Mart to open up a super-sized store not 100 yards from the river’s edge. With the absence of state sales tax, Wal-Mart was able to undercut literally every business in that little Vermont town, and most of them were driven out of business within a year. It would be nice to be able to say that the people of that little town decided to support their own townsfolk and spend enough at those mom-and-pops to keep them open, but as we all know, people are selfish, and they cannot be expected to spend more to support their friends when a no-tax Wal-Mart opens up right next to them.

    The moral is … no or a lower state sales tax is a HUGE marketing element that drives many people across state line to make their purchases. When that business is online, then literally anyone can take advantage of the price break without needing to go anywhere.

    Amazon and many other online retailers have been ripping off states, and damaging brick-and-mortar businesses for many years due to their ridiculous perception that they are not part of any states’ commerce. It’s time they sucked it up and started playing on the same field that everyone else plays on.

  75. Steve G says

    “State of CA worst state at fiscal…”

    Really? Just a cursory Google search shows 43 states in financial straights unable to run a balanced budget and meet their obligations to employees and residents.

    Despite being the most populous state in the nation (by a margin of 13 million) and receiving just $0.78 back from the Federal Government for every dollar paid in taxes (i.e. we subsidize Federal programs in 32 states), CA’s shortfall as a percent of budget is lower than Nevada and New Jersey by nearly 10% in both cases. Even New Mexico which gets over $2.00 back for every Fed Tax dollar paid in, is $450 Million in the hole. So if you are looking for a poster child for the state with the worst fiscal control look elsewhere.

  76. says

    Richard, thank you. Agreed. If we could have more simplification of our tax system, that would be a huge help.

    4Gs, agreed, California could make life much better for businesses.

    Dave, thanks for the additional info. It’s appreciated.

    Charlie, if the Board Of Equalization decides that I’m one of the 99.9% of the people who doesn’t calculate what potential use tax might be owned on an out-of-state purchase, bring them on.

    John, I care very much about the US Constitution. But Amazon declaring that a new law in California is unconstitutional doesn’t make it so. It’s a new law, one that attempts to bring them into the sales tax structure since under preexisting laws, the constitution said they weren’t. We won’t know the constitutionality until someone challenges the new law — and Amazon’s not trying that, at least not in California.

    No, I haven’t been under a rock. I’ve been aware of how Amazon has treated states and affiliates in those states, if they try to apply sales tax. I wasn’t seriously learning about this news from Amazon. But yes, I’m seriously saying that if you’re a business concerned about your relationship with other business partners, you ought to keep them informed. Amazon could have handled this much, much better. My view.

    If Amazon was to start to charge sales tax, they might miss you, but I imagine the vast majority of people would simply pay it. I doubt they’ll miss me. As for their affiliates, they’ll make up those lost revenues in other ways, I’m sure.

    As for the Amazon virtual business decision, I have no problem with that. But they do have an advantage in a set of sales tax laws that probably need to change. Yes, we had mail order before. The interent is an entire different creature.

    As for the authority of charging sales tax, the state does have that authority if it declares that it does and finds a way to enforce that. California’s new law is designed to do this. Amazon has reacted by pulling out, negating any enforcement there.

  77. says

    Danny,

    I don’t even live in California, but I’ve been following this for months. If you haven’t been, and the letter was your first indication? I can only assume that you don’t pay attention to anything beyond search.

    Seriously, look up every once in a while.

  78. Jay Margolis says

    Wow you are a huge idiot. Complain to your congressman who just passed this illegal bunch of nonsense. Amazon is the victim here.

  79. says

    Hi, Enjoyed your post, and I wholeheartedly agree.

    This country won’t be sound unless double standard tax laws of Delaware, Nevada, and Wyoming are banned.

    Yes, I know that would affect some of you here directly, who register your businesses in your wife’s name in Nevada, and send the profits through sham boards to the Caymans, so that taxes aren’t levied on those profits.

    That is California’s biggest loss: companies who send the profits out of the country to avoid taxes.

  80. Ric says

    You know Danny, if you had any insight into what this is really about and why – rightfully – Amazon is telling the states to eff off, you would be a wee bit more supportive of their efforts.
    1. This is not about leveling the playing field its about funding ineptitude, state government budgetary ineptitude.
    2. If you had any sense of team player loyalty, you would at least give Amazon some lip service. this is a prime opportunity to bring awareness to the anti-business mentality that is becoming prevalent in this country and has trickled down from the Federal level.
    3. You are saying its okay for a fundemental aspect of the way Amazon does business to be compromised by a sudden change in regulations that they agreed to for all these years and not want to look out for their best interest?

    I think you need to get clear on the real facts of this issue. Sic em Amazon, large change can often start in a small arena.

    Oh and how bad is unemployment in your state anyway Danny? … I thought so

  81. says

    Jay, if you wouldn’t open a face-to-face conversation with someone by calling them an idiot, then perhaps you might give a second thought to doing that with your online conversations.

    Amazon’s not a victim. This won’t hurt Amazon much at all, other than potentially cause it to lose some short-term traffic from referral sales out of California.

    Amazon’s affiliates are victims, pawns in this battle between California and Amazon. And since those affiliates have supported Amazon, it seems reasonable to think Amazon might have stood behind them and fought what it believes to be a bad law.

  82. says

    Danny and all,
    To all the affiliates who are being dropped, whether in California, Colorado, Illinois or any other state, I would suggest either of the following.
    1) Business, move your company to a state that does not tax the internet or have a sales tax. An LLC is simple enough to set up.
    2) Individual, see above, form an LLC out of state, let them own the site and you can continue to earn your income.

    In defense of Amazon, there are over 8000 different sales tax bodies in the USA. If every internet business had to comply with each taxing body there would be NO new sites, NO new businesses. Could you imagine the cost of the software to deal with all these, include the different items covered by each taxing authority. Food is taxable in some states, not others, toilet tissue, again, different for every state, county, city, town, etc. And don’t forget that they probably have to get authorization to collect taxes and send them quarterly statements whether or not they sold a thing in their area.

    So how is that business plan for a small internet retailer looking now???

    It is another example of government hindering business

    Personally, I support Amazons move, if they had to comply with 8000 taxing bodies prices would go up, service down.

    Enough of government and their greedy mitts looking to get into every pocket. Jeff, i hope you have a jet and use it!!!

    Tom

  83. Mike says

    Here’s a novel idea. How about Amazon provide the facility to the purchaser to decide if they want to pay the tax in the state they live. I for one would happily click on it to ensure I paid my way. For others they can choose to send in their tax to their states the way they do today – oh, hold on a minute, they don’t.

    Sorry for all the junk comments you are getting. We often mock other countries for living according to laws created hundreds of years ago, yet here we are, doing the same. Good luck.

  84. Arthur says

    I’ve been an affiliate since 10/02/2003. I’ve only earned around $50 in advertising fees since 2006 (as far back as the records go.) So, I’m not particularly incensed by the move; however, I’d still like to have access to up-to-date traffic and sales data related to my links. I guess I’ll have to use bit.ly or some other service.

  85. Steve G says

    “Wow you are a huge idiot. Complain to your congressman who just passed this illegal bunch of nonsense. Amazon is the victim here.”

    Wow is right! We have now reached a point in our culture where COMPANIES, not human beings, being required to pay taxes for partaking in commerce in a state are “victims.” Holy cr*p.

    BTW, if a bill is passed into law, it changes the legal code and is therefore part of the law. It may at a later date be found to be unconstitutional and repealed, but it was never “illegal.” You might want to be careful with your language when calling others idiots as you may self incriminate. I have met Danny on multiple occasions and I assure you he is not one

  86. Neil says

    From outside of the USA, America seriously needs to get a grip on this as it is insanity.

    In the UK it is a flat sales 20% VAT sales tax on qualifying stuff, with domestic fuel discounted to 8% and much like food, books, childrens clothing exempt.

    Within the EU you pay sales tax in the originating state at their rate, so if you buy from Germany the standard VAT rate is 19% and the reduced is 7%.

    By law, that’s all you have to pay and trade within EU states is barrier free with no further duties, or taxes to pay.

  87. SallyT says

    I agree with Richard Dahl’s points; if CA retailers are so angry about being dumped by Amazon, they should be pressuring their legislature to end the ridiculous tax structure in their state.

    Why do CA retailors believe a company should revise its operating systems at the whim of legislators looking for easy revenue sources? Why do CA retailors accept their sate’s unconstitutional power grab, and assume a private company should accept it, too?

    As Jay Margolis said: “Complain to your congressman who just passed this illegal bunch of nonsense. Amazon is the victim here.”

    I’m off to buy something from Amazon…

  88. Jim Henderson says

    Dear Jeff – and all the rest of the Liberal / Progressive / Socialist kool-aid drinkers,

    After 15 Years living and working in IT throughought Silicon Valley in the northern part of ‘the peoples republic’ I left the state in 2004.

    California legislators were then (and STILL are) running jobs out of the state faster than one could imagine, and raising taxes at an astounding rate to fund their liberal idiocity. The same moronic mindset you espouse – thinking that we should all pay taxes to California – WHY?
    The state is the MOST fiscally mis-managed in the US – giving them more money is like giving MORE drugs to a crack-addict.

    Assuming you are not completely Morally Bankrupt I suggest you revisit this issue and THINK it Through – this time, rather than parrot the Liberal ‘party line’.

    Here’s a starter question for you to ponder . . . . If simply ‘paying taxes’ is such a “good thing” (note that no one is asking the Real question – What are those taxes going to pay for???) then HOW is it possible the massive exodus from California is into Lower tax or No Tax states? Why are they thriving while CA is bankrupt?

    Living in the Real world now,
    JH

  89. Andrew says

    It’s easy to pay more taxes if you want to. If you think you should be paying more, simply send the CA Tax Board more money and they’ll be happy to process it for you.

  90. A. Friend says

    Kudos to Amazon! California and it Liberal viewpoints have destroyed…California. They have dug themselves into so much debt that now they want to blame someone else and profit form it at the same time. By what Amazon is doing just encourages me more to continue to purchase from Amazon. Stay strong Amazon!

  91. Jeff Mendenhall says

    As a small online retailer, I’d have no problem collecting (a streamlined) sales tax for all states, so long as all brick-and-mortar retailers are required to do the same.

    How do you think a brick-and-mortar merchant would react if it had to ask for a Drivers License / proof of address from each of its customers, and then calculate, collect and remit the appropriate tax depending on the state, county and city of residence and class of goods, for each customer?

    If brick-and-mortar retailers were required to collect taxes in this way, this would be a non-starter. Internet companies are being singled-out because they already have the customer’s address info and a technical infrastructure and are therefore an easy target.

    Danny, your argument that you shouldn’t have to pay your use tax because it is a hassle, and that Amazon should collect it for you, applies as well to ANY other online or brick-and-mortar merchant in ANY state that you visit. If you go to Oregon, buy a book from a small independent bookstore, and return to California to read it, then YOU owe the tax. Is it fair to place the hassle and expense of collecting and remitting YOUR tax on that small retailer in Oregon?

    Exempt small businesses you say? How is that fair to mid-size or “big” businesses? Perhaps the need to exempt small businesses is an indicator that the law itself is flawed and should be changed.

  92. says

    James, you probably missed my comment right above yours. Perhaps I was writing it as you were posting. Of course I’ve heard about this news, that it was coming, before I received Amazon’s letter. But if you’re Amazon — and you want to stop this law — your affiliates are potentially one of your best resources. So you reach out to them early. You don’t send them a “Hey, we’re sorry, all the best” message the day it hits.

    Ric, for one, I think others have already said this isn’t just some “California’s crazy / anti-business / whatever” issue. Indeed, when you seek to educate me about insight into what this is “really about,” you talk about Amazon telling the states to eff off. So it’s not a California thing. California is just the latest battleground.

    I understand that this is directly tied to California seeking to balance its budget with new revenue sources more than trying to make sure that all businesses are on a level playing field.

    That doesn’t negate my feelings that the playing field isn’t level. It’s something I’ve felt for some time — and felt despite being so heavily tied into the internet. I tried to explain that more in the piece.

    I would love to see this help bring in more pro-business decisions. Which is why I am giving Amazon some advice — why don’t you stand up and fight for that? Because they aren’t fighting. They’re running for cover. That doesn’t help fix anything, except for their own selves. But hey, they’re a business — it’s probably too much to expect them to fight unless they absolutely have to.

    That’s also my response to your third point. I’m saying that if the rules have changed, and Amazon felt it was useful to have affiliate there, then fight those rules. Fight the law, do it in a way that doesn’t cut-off your affiliates. But more likely, they don’t need those affiliates. They aren’t worth more than the perceived value of not having to collect sales tax.

    Tom, as said, I’m all for things being made easier for small businesses.

    Neil, from inside the US, from someone who lived in the UK for 12 years, trust me. We don’t have a monopoly on insanity. The EU has different sales taxes (VAT) for different countries. That’s absolutely no different than the US having different sales taxes for our different states. They have their own governments that set these, just as your states within your federal union do the same. We also have different levels of sales tax in some cases or no sales tax on particular items (food, for instance, isn’t taxed).

    Within the EU, you do pay sales tax at the originating rate of the other country. Unless, of course, there’s a reason why you might be deemed VAT-free. For instance, below around 60,000 pounds in the UK, a business doesn’t have to register for VAT — and so doesn’t charge it. And an Irish business might decide that a UK business isn’t Irish VAT-applicable and so not charge.

    As a former VAT-registered business, I could talk this stuff all day :)

    Anyway, it doesn’t matter. All of our US companies simple setup shop in Ireland anyway, to as to prevent channeling any of the income they earn back to the US. Or to the UK, for that matter. Google’s one of the most famous examples of this. And I’m stretching the point a bit — but there are some serious concerns of the tax dodges companies make.

    Jeff, if I go to another state and buy something, no, I don’t think that business that is solely present in that state should be trying to collect sales tax on those sales. Nor do I think the consumer should be worrying about it, either. Which is also why it just doesn’t happen.

    And yes, I think the laws are very flawed in many ways. It would be nice to see them reformed. Even better if I felt some businesses were working to do this. But Amazon doesn’t give the impression it has any real interest in that. All I get is the impression that it wants to cut-and-run to whatever gives it the best advantage.

  93. says

    While there are many legal issues at play here, and quite frankly I do not claim to be an expert on this topic, but it strikes me that the one issue we should absolutely be discussing is whether or not the high sales tax in CA is punitive. Amazon critics say the company enjoys an unfair advantage but fail to point out how a 10% (in some counties) sales tax is an obstacle for every business, Amazon or no Amazon.

  94. says

    I really dont understand your beef here? I get that you’re mad at the lack of notice, but the rest seems misdirected. Why not get pissed at your govenor for refusing to solve the states fundemental problem…TOO MUCH SPENDING, by trying to suck more tax revenue out of a business. The rest of the piece seems to be upset at Amazon for having a better business model, than say Barnes and Noble or Best Buy. I just dont get it.

  95. says

    @Jeff, I’m always amused by some businesses idea that a company that has less expenses because of thier busienss model, that it has an unfair business practice. lol

  96. says

    Don’t forget to send a letter to Jerry Brown and the Democratic Legislature for taxing the internet. They are more to blame than Amazon.com is.

  97. Josh says

    Amazon’s affiliates are the victims, but the blame rests on the state, not on Amazon. California’s 8.25% sales tax is the highest in the nation. Just imagine, suddenly they have to fork over 7.6% of their haul. With the number of customers they have in California, that’s a devestating loss. It’s obvious that their best option is to cut off their affiliates.

    Frankly, I’m shocked that you expected anything else.

  98. says

    Kiara, I’m not that mad about the lack of notice. It’s just an example of how little Amazon really seems to care about the affiliates — who are also customers.

    Also, you and Josh seem to misunderstand how sales tax works. Amazon doesn’t suddenly get sucked dry for that amount of money, the extra 8.25%.

    No, sales tax is a charge levied on the consumer. Amazon just collects it and pays it to the state. So no, Josh, Amazon doesn’t “fork over” any of its haul. It forks over what it collected on behalf of the state.

    If the did that, they almost certainly would not have a devastating loss. They’d have prices that might not be slightly cheaper than retail stores overall, because they’d have to collect the sales tax they do now. But many people like shopping with Amazon for reasons other than the potential tax savings, including the fact you don’t have to drive off and waste time shopping for many items.

    So back to you, Kiara. The piece is mainly upset that Amazon has decided that collecting sales tax would cause it to lose a pricing advantage against retailers with real stores, and so rather than fight the law (which perhaps might lead to a better one all around), it has cut loose its affiliates.

  99. Steve G says

    “CA and its liberal viewpoint… Ruined the state”
    @A. Friend must have forgotten conservative patron St. Ronald Reagan was R-Gov CA. And probably has failed to visit Orange County, SLO, San Diego, Stockton, Fresno, Sacramento, the whole of the central valley.

    Must stick his craw that so much technology and bio science success comes out of the “liberal” SF Bay Area and that Jeff Bezo actually supported the democratic governor in WA, and OMG contributed to Obama’s campaign.

    Why does every blog comment thread at some point have to devolve into a liberal vs. conservative pissing match?

  100. says

    @kiara it always amuses me when people talk out of their ass. AMZN’s gross profit margin is 24% and their EBITDA margin is 5.7%… Walmart, which does pay sales tax and has enormous physical infrastructure to support, has a 27% gross profit margin and 7.9% EBITDA margin.

    Amazon’s costs are shifted from retail operations to distribution and infrastructure, just because their operations are online does not mean their expenses have evaporated.

  101. Steve says

    As an Amazon merchant, and a small business, I am glad that Amazon is taking a strong stance on states who want to force out-of-state small merchants to be their tax collector. There is no way possible that we can stay in business and compete if we are required to comply with the thousands of various sales tax laws throughout the USA. You will destroy small businesses such as mine, and Walmart and other massive retailers will win.

  102. says

    I’m sorry you’re losing your Amazon income, but if Amazon were to start collecting sales tax and give into state pressure that ignores federal law, it would lose MANY, MANY of its loyal users to other merchants, including myself. California put itself in its financial troubles. NOT the people, THE STUPID FU$*^&$% GOVERNMENT PEOPLE IN CHARGE. They’re not overtaxing, they’re OVERSPENDING, BIG TIME. The cost of living in this state is ridiculous, but that’s in large part because the cost of doing business in this state is too. I still see wasted money every time I leave the house, and every time I visit a friend at a state or other government office, and every time I talk to co-workers who get food stamps that dont need them. They’re punishing the people by cutting back on education etc, but its not because they need more money, they need to manage what they get far better. The federal government does too, but this state especially. Now California is going to further hurt its own businesses and citizens by trying to take more money it shouldn’t get, and its only going to hurt them more. If I were you I’d quit blaming Amazon and move the hell out of California.

  103. Dave says

    Don’s post:

    “RAG, the 8,000 jurisdictions collecting sales tax is not that big a deal. There are companies that provide a service to online websites that keep track of the different rates.”

    Perfect!

    I thought we were only talking about state taxes being collected. Assuming that we are only talking about state taxes being collected then I would assume there is software available to on-line companies to collect the state taxes only (~45 states), not all 8000 taxing juridictions.

    There is much crying and gnashing of teeth at the prospect of having to do the right thing now that on-line businesses are required to do so by state law. Instead of working yourself up into a rage try looking up the software package you need and get on with business. There is way too much emotional content being vented on a simple fact of life – you don’t always get to take advantage of the system forever. Good grief! Grow up and behave like adults.

  104. says

    Will, I love California. It’s my state. It’s my home. And I’m going nowhere. It has problems, just like any place, and I hope we deal with those problems.

    I’ll say again as was in my original piece and follow-up comments. This isn’t about my income. This income loss won’t be noticed at all. That you and others keep writing this suggests that you aren’t actually reading the piece. And since I only have so much time, I’ll stop responding to clarify this shortly. And eventually, I’ll just close the comments. There’s only so much repeating of things over-and-over that anyone can take. And that includes readers here.

    I’ve also agreed that I don’t think this is somehow a magic fix for California’s budget woes, nor do I disagree that we can’t do better with the taxes we already spend. I didn’t write any of that. Nor did I blame Amazon for California’s budget problems.

    I am upset with Amazon for behaving in a poor business manner. It is entirely possible to be upset with them for this and not meant that you’re all cheerleading for “the other side.”

    Amazon could have, and should have, given their affiliates more notice. They didn’t. No, this didn’t catch me off-guard, as I’ve explained before. But it’s just not businesslike to send the notices out in the way they did.

    Amazon could have chosen to fight the law by collecting sales tax and holding it in escrow. Instead, it chose to cut-and-run, dropping the affiliates and not contributing to fixing the laws it disagrees with. I think it could have, and should have, done that.

    Others are entirely within their rights to disagree with my views on this.

    Also, coming to the close of this latest response, I pretty much feel all that’s needed to be said here has been said here all around. So I am closing the comments.

    I honestly do appreciate those who have contributed here with thoughtful responses. I wish I could keep it going, but as I said, I do have a day job. So I’m getting back to that.