California has no way of charging them sales tax, nor should they, without a nexus. Imagine if you, living in CA, ordered something from a brick-and-mortar store in New York. If that store had to charge you sales tax and remit it to California, they'd simply say "no thanks" to your business. It's just not worth it for them to have to do all that work so you can get a $10 item (and so California can get their 82.5 cents).
Amazon shouldn't be treated any differently simply because they do a lot of business in the state. California knows this, so they come up with (well, Illinois came up with it) the idea that if some third party runs ads on their website for products on Amazon, that third party (an "affiliate") is actually an agent of Amazon. That's preposterous.
Amazon doesn't really have a choice, though. If they sue and lose, the entire affiliate program goes away. So they instead just drop the affiliates. They have to -- they're paying affiliates 6% of all qualified sales and paying the state 8.25%. And they are then open to audits and other nonsense from the state. It's just not worth the leads any more.
You can't be serious. It's not really the affiliates that make the difference here -- it's all of Amazon's operations in CA.
We're all futurists here except when that means losing affiliate revenue and/or no longer having a tax dodge. It's just a matter of time before there's uniformity between the online and brick and mortar worlds, and Amazon is simply seeking delay. Per Sinclair "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"
You're focusing way too much on the outcome here and not at all on the process. If you want Amazon to be taxed (which I'm fine with), it should be done federally or consistent with how every other company is treated. Amazon is being singled out here because they're so big. There are two possible paths here: (1) Amazon continues to be singled out and/or (2) Other companies also get dinged (wrongly) in this way.
Option (2) is really, really bad, especially for small businesses and startups. You don't want to all of a sudden have a successful brick and mortar spice business in New Hampshire and find out, holy cow, you're in arrears for lack of tax payments in California! That'd be a business-killer.
No, you're right, they're the shell companies designed to avoid asking customers to pay CA sales tax. Virtual presence is fun until it means you have to start competing on a level playing field.
The affiliate program might be the strongest legal argument for in-state presence, but it's far from the only one. Apart from the subsidiaries, there's also the more than $3 billion they get from CA residents.
I think everyone here should have to disclose competing interests on this topic:
full disclosure: I work for a company (part time) that makes most of its money from Amazon affiliate revenue (but I personally am not taking Amazon's threats very seriously).
I wonder what authority CA claims over entities with no physical presence in the state. What I mean by that is this: if Amazon wants to ignore this, and still ships to CA residents, what recourse will the state have? If anything, wouldn't this all fall under the interstate commerce powers of the Federal government?
It is likely interstate commerce, since the affiliates don't work for Amazon, but it would also likely land Amazon in court in a large court battle. That battle may eventually get to the US Supreme Court, but I don't think Amazon wants the distraction.
I do wonder at what point loss of sales from affiliates will cost more than collecting taxes. Apparently, Amazon thinks it's a long way out given how readily they cut ties.
I have doubts that there is any point where loss of sales from affiliates would cost more than taxes. The main reason for Amazon to have an affiliate program is not awareness but SEO. The tens of thousands of people placing links directly to Amazon product pages are what keep Amazon at the top of search results for hundreds of thousands of product names, in turn driving much of their search traffic.
Amazon would like to win this in the legislature, as they have in some states with lobbying and the pull-out threat. Or by gubernatorial vetoes, as previously in California and just a few weeks ago in Texas. Or in the courts, as they are currently challenging a similar New York law. (Amazon lost an early round; they're appealing.)
They'd rather win before going to the Supreme Court but I think they'd try that route if they had to. The distraction would be worth it; this is a very, very valuable price advantage against in-state retailers like NewEgg.
The Supreme Court might find this new crop of laws, and the affiliates-as-sufficient-nexus logic, sufficient. These were crafted with the previous Supreme Court decision in mind, the one from before Internet commerce (1992) that prevented sales tax on out-of-state sellers. Or Amazon might win an updated precedent which would leave only Congress with the ability to address cross-state sales.
Lab126 (which develops the Amazon Kindle) and A9 (Amazon's search technology firm) both are located in the SF Bay Area, and from the outside appear to operate as Amazon divisions. In addition, EC2 offers instances in Northern California, though I'm less familiar with their physical presence.
I'm sure that Amazon's lawyers have done a very good job at structuring things such that they meet the letter of the law, but come on -- they've been in California for years.
California is claiming that by having affiliates who are physically located in California , Amazon does have a physical presence in the state. If Amazon ignores it (and doesn't cancel the affiliate program in California, as they have said they will), California will sue them for unremitted taxes.
> ... if Amazon wants to ignore this, and still ships to CA residents, what recourse will the state have?
Charge a use tax on the goods, like sane states do. The trick would be incentivizing people to pay the use tax. (Oklahoma incentivizes by letting you pay estimated personal use tax. Pay a tiny, flat fraction of you income on your tax return and you are immune from use tax prosecution.)
> If anything, wouldn't this all fall under the interstate commerce powers of the Federal government?
The U.S. Congress could, if they chose, require that interstate vendors be able to collect and redistribute use tax. A standardized federally-administered database would make implementation tractable. The hard part would actually be dealing with businesses who plan to resell the goods, who are exempt from use and sales taxes.
Damn. There goes my $300-$400 a month passive income... And I already report my use-tax to begin with. Guess it's time to start calling up friends out-of-state for their mailing address.
And if I have to start filing tax returns with every state and county my small business happens to do business with (~$1000 / year business), I'll probably shut that down entirely for not being worth the bother as well.
Almost sounds inspired by crazy European Union VAT laws! American companies are technically required to register to collect EU VAT if their sales to any EU territory are over a certain amount. Thankfully, most smaller ones don't.
The level above which you have to register to collect the VAT is there precisely to protect the smaller companies which make a few small sales to the EU. If you are making enough sales to be over the threshold you should be able to afford to abide by the law.
Except it's a bizarre law because those US companies are not necessarily in the EU themselves. It'd be like California demanding a business in Poland should charge local California sales taxes for any exports to that state.
this is very anti-entrepreneurial. all the small business, affiliates (large and small) will now relocate to other states that are more friendly to their business.
All that this is business is going to accomplish is that it will collect less tax dollars, drive jobs and businesses out of state. Thank you to big box retailers like Best Buy and Staples for driving to have this bill passed.
This is the end result of the "pro-business" crowd pushing society's tax burden into regressive taxes like sales. Sooner or later those taxes have to go where the money is.
"all the small business, affiliates (large and small) will now relocate to other states that are more friendly to their business."
No, all of them won't. Many have physical locations in their state which they earn more from then they do from Amazon.
"Too bad California :("
Maybe you missed it but it's also too bad for Amazon. Affiliates add value, 40% of their sales. Now some will relocate and some will fold but the majority will keep selling their stuff and trying to chip customers away from Amazon.
No, this is the end result of a government spending more money than its citizens are willing to pay for. California needs to seriously get its spending under control including the unfunded liabilities (e.g. public employee pensions).
Of course they will threaten to cut fire and police to force the issue, when they have plenty of other budget expenses that can be cut first. Using fear to keep their donors in cash seems to be the current state tactic.
At some point, states needs to their expense, assign use tax (e.g. gas tax) to repair the infrastructure it is fixing and increase those taxes if they don't cover the infrastructure (or quit raiding them if they have a surplus).
PS: Depending on what the sales tax is actually taxing - it is not that bad on the poor. Going with that, "progressive" taxes aren't fair either.
PPS: I still want to know why sales tax doesn't apply from the state the item is being sold from.
I read parts of this and noticed the following exception for small retailers (<$10,000 annually), which may or may not be applicable to Amazon Affiliates (could be interpreted either way, because "retailer" includes "an entity affiliated with a retailer within the meaning of Section 1504 of the Internal Revenue Code."):
"This bill would include in the definition of a retailer engaged in business in this state any retailer entering into agreements under which a person or persons in this state, for a commission or other consideration, directly or indirectly refer potential purchasers, whether by an Internet-based link or an Internet Web site, or otherwise, to the retailer, provided the total cumulative sales price from all sales by the retailer to purchasers in this state that are referred pursuant to these agreements is in excess of $10,000 within the preceding 12 months, and provided further that the retailer has cumulative sales of tangible personal property to purchasers in this state of over $500,000, within the preceding 12 months, except as specified. This bill would also provide that a retailer entering into specified agreements to purchase advertising is not a retailer engaged in business in this state and would define a retailer to include an entity affiliated with a retailer under federal income tax law, as specified. This bill would further provide that these provisions would not apply if the retailer can demonstrate that the referrals wold not satisfy specified United States constitutional requirements,as provided."
The battle over similar issues in Texas has also been fun:
• Amazon has a distribution center in Irving, Texas but argued its clever legal structure freed it from having to pay sales taxes.
• The Republican Comptroller Susan Combs insisted on payment of a past tax bill, based on these operations.
• Amazon said it'd thus need to close the facility, and Republican Governor Rick Perry announced his opposition to the Comptroller's decision.
• The Republican-dominated legislature then passed a bill, similar to this California bill, further establishing Amazon's sales tax obligations, for not just the distribution center but the affiliates.
• Perry vetoed it.
• Amazon's hometown newspaper, the Seattle Times, then editorialized that it should stop dodging state sales taxes nationwide.
• The Texas legislature started working on a veto-proof way to obligate Amazon, perhaps by attaching the obligation to a larger budget bill.
• Amazon offered the legislature a bigger new distribution center, with 5000 (and then 6000) new jobs, in return for a full legislative exemption from sales taxes for the next few years.
The part-time legislature, which usually only meets every other year and (with no state income tax) takes sales taxes very seriously, has so far declined Amazon's offers.
Elsewhere on HN, I've read Amazon's claim that they would be happy to pay sales taxes, but that dealing with all the local taxing authorities would be a nightmare. If this is true, it makes me quite sympathetic to their position.
But if I understood you right, it looks like Amazon outright attempted to bribe the legislature for special treatment which other retailers in the state don't get. I realize this kind of shit happens all the time, but that doesn't make it right.
And the Texas legislature refused to play ball. If I lived in Texas I would be standing in line to re-elect these people.
I don't think that's really a fair treatment of the issue.
It probably doesn't make sense, from a business standpoint, for Amazon to maintain their facilities there if Texas can make them collect sales tax. So Amazon would probably save money by moving the facility. But it still costs money for them to move, which they'd rather not do.
So consider these two options:
A) Amazon is forced to collect sales tax. Amazon moves the facilities to a different state. Texas still doesn't collect sales tax, and also loses 5,000 jobs! Amazon has to pay for new facilities/relocation.
B) Amazon isn't forced to collect sales tax. Amazon stays. Texas retains the 5,000 jobs, but also gains 5,000 new jobs. Amazon doesn't have to pay to relocate.
Either way, the state isn't going to collect sales tax. So why bother enacting the law? It's really a choice between keeping or losing the jobs, not between collecting or not collecting sales tax.
Amazon recognizes this. So rather than both lose money, Amazon proposes to Texas that they invest more in their infrastructure their, create new jobs, and indirectly fund the Texas government through income and property taxes.
(It may also make sense for Texas to pursue enforcement as a way to blackmail Amazon into investing more into their state.)
Politicians would do well to recognize that their actions don't exist in a vacuum. Businesses will react to maximize profits. So even though something might on paper bring in money, it's possible that in reality it will only cost money.
Amazon promised 5000 jobs but they actually only employ 119 people in Texas:
"Deuell also said he was skeptical that Amazon could deliver on its promise of 5,000 jobs and $300 million in capital investments by the end of 2013.
"I don't see how in the world they can provide 5,000 jobs at distribution centers. Those operate very efficiently, with computers and mechanized things," Deuell said. "I don't want to doubt their word and their intentions; I just don't see how they bring 5,000 jobs to the state."
Texas and Amazon have been at odds over the collection of online sales taxes since last September, when Comptroller Susan Combs sent Amazon the $269 million bill, covering sales taxes it failed to collect from 2005 to 2009.
Amazon responded by saying it would close the Irving facility, eliminating 119 jobs. Amazon also said it was scrapping other plans to expand in Texas, accusing the state of having "an unfavorable regulatory climate.""
A straight, simple nation-wide sales tax with the proper exemptions and prebate system in place would go a long way towards making the tax code in the country reasonable and, yes, fair.
But to say that the mess of the current per-state sales tax system has any relation to the FairTax is nonsensical.
A nation-wide sales tax would be hazardous because it requires Congress to be involved in the restructuring. These are the same people responsible for the Internal Revenue Code and even after 90 years of experience, the Code fails to meet any normal standards for a simple, efficient, and effective tax on income.
why? i'd rather keep the money than give it to the state. why vote for people who want to tax you more? i realize it's nice to believe in integrity but i don't think this is an example of it
Do you drive on a road? Does the USDA inspect your meat? Did you or any of your kids attend a public school?
This demagoguing of taxes is getting a bit old. Reagan, Ike, and Nixon would all be chased out of the party at this point. Taxes are the price we pay for living in a society.
Edit for clarification: Obviously not all taxes are good, similarly not all taxes are bad. That is my point. Life is rarely black and white. I also think tax laws should apply equally and Amazon shouldn't be given any breaks that others aren't.
I, like most other working, educated people, pay every year more in taxes than I pay for food, clothing, vacations, gas and entertainment-- all combined. That's a big price to pay for driving on roads and inspecting my meat. You know why? B/c gov doesn't give a crap about efficiency or saving my money.
According to my grandfather (now 89 years old), who was a USDA inspector at a couple of meat processing plans from the end of WWII until he retired (in the late 1980s): There used to be an independent USDA inspector in virtually every processing plant. That inspector could shutdown the entire facility if he saw fit. Now most plants are self-regulating and only get pre-scheduled spot checks by the USDA.
He was pretty upset by the change in the system and the associated decline in the safety and quality of meats.
This is a false dilemma. It's not a question of whether taxes can be justified at all, but more of a question of whether all taxes and government expenditures can be justified. Certainly, there are some things that governments that are essential. However, I think it is folly to believe that all government expenditures are prudent.
"However, I think it is folly to believe that all government expenditures are prudent."
Agreed; however, for things such as schools and roads and a police-force, this is part of how they earn their money, so when you say no to sales taxes, you're not only saying no to all of its abuses, but you're saying no to the things that actually need it.
The problem isn't with the taxes, the problem is with where the taxes go; and if we don't like where taxes are going, then we need to vote with the mind to change it, and petition our elected officials to change their spending practices.
Will it work? Probably not, sadly, and I don't know where that leaves us.
End withholding taxes, just give people a big bill at the end of the year, and ensure that the names and faces of their elected representatives are on that bill, so they can be reminded of what magnificent service has been received that year.
Maybe, change tax due dates from April to the 3rd week of October?
That is actually a splendid idea. A quick Google search revealed it to be very easy to find where the US Government spends most of its money, but more difficult to find where individual states put the money they get. This would be incredibly interesting to see.
The problem here is that your reply is also demagoguery: no amount of taxes would be too much. No matter what the tax rate was, you could ask if folks like living in a modern society.
Very, very rarely do I find people who want no government or crippling taxes. The question, as you point out, becomes "how much is too much?"
So can we please stop describing other people's opinions in extreme ways? (I mean that for both sides)
I'm in favor of allocating a certain percentage of GDP to various governments. Say 15% to national, 5% to state, and 2% to local governments. Let the governments themselves decide how to collect it.
This does two things: it gives a real number instead of a bunch of arm-waving, and it puts government on a budget. Historical records show us that you're not getting much more than 20% out of a population anyway (and that's forgetting the Laffer curve)
You can always argue for more or less government and taxes. Both positions are perfectly fine. What's not fine is making this out to be socialism versus anarchy. It's really much more a conversation about finding compromise and being able to spend as much as you tax, instead of having politicians vote for programs nobody can afford and then pointing their fingers at the other guy when the bill comes due.
As for your question about living in a modern society, I'd argue we're paying about 20x more than we need to for these services, mainly because there's no choice involved. As governments continue to clamp down with taxes and more "help", there will be less and less choice, thereby making the multiplier even higher.
There's nothing wrong with believing that yes, we need these things, but no, this is not the way to have them. Doing the wrong thing with good intentions and a good goal is still the wrong thing. :)
If you sincerely want the legislature to tax you less, you should ask it to reduce or eliminate sales taxes on all retailers, not just on Amazon and not just on online retailers. To grant an exemption to one company or to one industry, the legislature would have to decide which lucky company or industry deserves it. The government thereby picks a winner before the market gets a vote. When they try this, governments usually pick wrong.
i agree on the overall sales tax issue (and in MA a year or two ago there was a ballot issue to eliminate it -- and for some reason beyond me, people voted to keep it). but if there's a loophole that lets me pay less, i'm going to take advantage of it and i'm not going to give the guys who closed it a pat on the back.
Well, technically you (the consumer) should be recording your Amazon purchases and paying the state your self-calculated sales tax. So, the rate does not change, only the responsibility for ensuring it is paid.
That said, almost no one bothers doing so, so in theory the rate would go up. However the rate would not be the "tax rate" but instead the "rate of taxes owed which are ultimately paid".
in theory, your income taxes are supposed to funnel back down to your state (same way state taxes go back to your city). you also pay a lot of money for state income tax, property tax, tax on every gallon of gas you use, heavy taxes on booze and cigarettes, taxes on utilities, taxes on your cell phone and cable bill, excise tax if applicable, tolls, parking and speeding tickets if you get them, and fees for doing just about anything related to the government (including fighting traffic and parking tickets).
i refuse to believe taxing out of state corporations is going to make a big difference. there's already plenty there, it's just used in the least efficient way possible. this whole thing with the affiliate programs is either a really lame money grab or good lobbying by big box stores.
It doesn't really make sense, though, to charge the same level of tax for a store that has a significantly lower impact on local infrastructure. Amazon doesn't have to build space-wasting parking lots, drive one car per person to the store, etc. The significantly more efficient distribution model should be taxed in consideration of its reduced resource use.
This argument assumes there are no societal benefits from having local infrastructure though, which I wouldn't agree with. Amazon may be more directly resource efficient, but I don't think that argument taken to its logical conclusion would build a community in which I'd want to live.
I don't mean to suggest that there should be no local infrastructure, only that the maintenance costs of any infrastructure that exists would be reduced, allowing a city/county/state to function with reduced tax income. Also, the land that would be used for parking lots could be used for other revenue-generating purposes.
You're advocating that there be no tax on consumer goods from other states. That's fine, but it's a different issue. There is tax on goods from other states, it's just that there's a lot of, ahem, non-compliance.
Your argument also assumes that the business is a net drag on the local environment unless it charges a sales tax. But I strongly doubt that the sales tax revenue a business generates is much more than the other economic benefits it brings (e.g. jobs). This is why so many local governments are willing to provide tax credits to businesses that move or start in their districts.
The school district that spends the most (D.C.) per pupil is one of the worst. Adding money to something with a broken process doesn't really help. Heck, there are a number of startups to use as examples.
Looks like there is a correlation between test scores and funding, but it's not statistically significant.
According to a review of over 400 studies, "there is not a strong or consistent relationship between student performance and school resources, at least after variations in family input are taken into account," according to a paper published in the journal Educational Evaluation and Policy Analysis.
Pay particular attention to the McKinsey report results, which found that a teacher that is a standard deviation better than the norm adds $20k to a student's lifetime earnings. Two standard deviations gets you $32k, or $640,000 for a class of 20. Teachers' starting salaries are $39k/year in the U.S., but in educationally top performing places like South Korea and Singapore teachers earn more on average than lawyers and engineers.
That's an old saw, but can you prove it? Can you prove a correlation between per student funding and student scores, graduation rates, or some other measure? Can you even prove that schools have reduced per student funding over the last years?
Unfortunately, some tax money also goes to bad locations, like people who abuse welfare and commit fraud, payoffs to politicians' allies, and overseas junkets for elected officials and their mistresses.
I live in Florida. We are middle of the pack as far as per student funding goes. Since $10,878 per student per year is insufficient, what funding level would you recommend?
It appears that the measure died. The enrolled form of SB1 (the Fiscal Matters bill) that was sent to the Governor today doesn't seem to include the sales tax provision.
IIRC Amazon has a pretty complicated legal structure where each of those companies - IMDB, A9, etc - are wholly owned subsidiaries of Amazon (or some other legal entity) and not considered the same entity as Amazon.com.
And A2Z, Zappos, the Kindle group. Search the job board and you will find those Amazon subsidiary job come up often. The are enjoying huge tax advantage over other retailers. You can be sure they will make every legal maneuver to work around this.
The core problem, from an outsiders' perspective, appears to be jurisdictional fragmentation. Amazon, not unreasonably, want to be able to regard the USA as a single market, yet this gives them 50 different sets of legislation and 50 tax codes under which to operate.
However politically unpopular this idea might be (it's certainly not popular in Britain with the EU, which itself started as a common market and legislation / regulation area) the most business friendly idea seems to be centralisation. Remove competency for this sort of issue from the individual states, create common legal frameworks, allow a one-size-fits-all management model rather than having to individually cater for the requirements of Wyoming, Vermont, Alaska, North and South Dakota, Delaware and Montana. Seven jurisdictions, seven legal codes, seven sets of tax law. Yet only one has enough population that it would even qualify for the top ten cities by population and even combined they would only be twenty-second in population ranking. They're not major markets and a legal framework designed like this is unduly expensive.
Way more than 50 different tax codes (Amazon could probably deal with that), many counties and municipalities have their own laws regarding sales tax too.
On top of that how would Amazon identify if I live inside Omaha 7% (state+local) sales tax, or just outside Omaha 5.5% (state only) sales tax? Nothing changed about my address between when I lived in an un-annexed suburb and after I was annexed.
Well 5 states have no sales tax -- including Oregon and Delaware. And another 5 states already collect sales tax from Amazon -- including New York and Washington. So there's really no need to get fancy -- there are plenty of good options for places to locate your company.
If you look to Europe, we have a sales tax in every country and yet Amazon manages to operate an affiliate service without problem.
If every state harmonised to a similar sales tax range and contributed a certain percentage of the earnings to a central pot (which is shared), then you wouldn't suffer from these problems. I know this is unpopular because people in the US tend to be strongly against tax, but it's a solution.
I'm curious, how is Amazon selling things online different from software companies offering software and services online ? Does this law pave way in future to tax these kind of services too ? Or is it that software companies already pay a sales tax for Software...
Frankly, I wish Amazon would just give up the fight and go ahead and charge sales tax for all 50 states. They're the only retailer that I do any business with that doesn't charge sales tax and, because it's a PITA to remember to save every single receipt from them for tax purposes I don't do so and, therefore, I end up paying stupid use taxes which probably end up costing me more than what it would've cost me if Amazon had just collected the sales tax in the first place.
How do you end up paying more in taxes? A majority of my spending this year was made on Amazon and in my tax return I didn't enter a single one of those purchases as "Out of State Untaxed Purchase" so I didn't get taxed, which I think was illegal but apparently I'm not the only one who neglects to do this.
In any case, all Amazon receipts can be viewed in your account history.
How do I end up paying more in taxes? Because I'm aware that I undoubtedly bought something from Amazon in the past fiscal year and, therefore, in compliance with my state's laws, I check "yes" in the box and pay the flat fee for use tax. That flat fee is set at a level that reflects what the state thinks an average taxpayer owes for their "out of state untaxed" purchases, but the "average" taxpayer in their model buys more stuff than what I would ever actually buy and, thus, they charge me more in use taxes than what it would have cost me if I had just been charged sales tax in the first place. I guess it just plain never occurred to me to look up my account history and compute an exact value instead.
That's what I do. Being the overly honest person that I am, I go through and total up all my Amazon purchases for the year. They should really have a way to compute the total automatically. It always takes me a while to do it by hand. But at least that way, you're paying the right amount.
Sales tax laws are different in all the different states. It's not like there's a lookup table matching state to tax rate. You've got different tax rates on different categories of goods, and different tax rates by county.
It is only a solved problem for all the jurisdictions that have a Target. Sales taxes actually differ beyond the 50 states. For example, MN has a couple difference that cannot be found with 5 digit zip code. You need the whole address / zip+ and map data.
yeah. I mostly avoid going through provantage.com for similar reasons. Keeping track of what I bought for use tax is a pain in the ass, and provantage does some ridiculous "ship it from CA to Oklahoma, then back to me in CA" scheme to allow me to evade sales tax. Well, i end up paying use tax anyhow, so it just costs me extra in shipping and bookkeeping costs.
it is a subsidiary. Ie. Amazon pays A9 for the technology, but A9 is a separate legal entity.
I worked developing for the Kindle, which is designed/engineering in Cupertino, by a company called Lab126, which is a subsidiary of Amazon. (basically Amazon pays Lab126 for technology transfer on the books, but really, internally amazon controls everything).
The Parent company/legal entity of the CA subsidiaries is called A2Z.
We were instructed not to travel around, we couldn't attract recruits by saying we were working for Amazon, etc. etc. But internally Amazon was controlling pretty much everything.
Why does legislation have to be some confusing. So I get that certain parts of the law have been signed, but what about the affiliate tax? Is that now the law. The article says
"Brown announced signing eight separate pieces of that package Wednesday, though not the main spending plan itself.
The online sales tax law, AB 28 1x, would seek to force online retailers who have no physical presence in California, such as Amazon.com, to collect the same levies as bricks-and-mortar stores."
The use of "would seek to force" seems to suggest this part hasn't passed yet. So the real question is did it pass or not?
It's amazing how 90% of the people here are so incredibly ignorant that they don't know that states don't have jurisdiction over the activities of their residents and non residents in other states. This community is not very smart.
California has no way of charging them sales tax, nor should they, without a nexus. Imagine if you, living in CA, ordered something from a brick-and-mortar store in New York. If that store had to charge you sales tax and remit it to California, they'd simply say "no thanks" to your business. It's just not worth it for them to have to do all that work so you can get a $10 item (and so California can get their 82.5 cents).
Amazon shouldn't be treated any differently simply because they do a lot of business in the state. California knows this, so they come up with (well, Illinois came up with it) the idea that if some third party runs ads on their website for products on Amazon, that third party (an "affiliate") is actually an agent of Amazon. That's preposterous.
Amazon doesn't really have a choice, though. If they sue and lose, the entire affiliate program goes away. So they instead just drop the affiliates. They have to -- they're paying affiliates 6% of all qualified sales and paying the state 8.25%. And they are then open to audits and other nonsense from the state. It's just not worth the leads any more.