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Amazon Will Drop Its CA Affiliates If Taxed

From a ticked off (at Amazon) Associated Press:

Amazon to cut off California-based Web affiliates

June 29, 2011

SAN FRANCISCO (AP) — Amazon.com Inc. said Wednesday that it will stop working with online affiliates based in California since the state passed a new rule that forces online retailers to collect sales tax there.

In an email Wednesday to California-based affiliates — individuals or companies who run websites that refer visitors to Amazon and then get a cut of any resulting sales — the Seattle-based company said it would cut ties with those who reside in the nation’s most populous state if the law became effective. Gov. Jerry Brown signed the law Wednesday as part of a larger state budget package.

The rule requires online retailers such as Amazon to collect sales taxes if they have in-state affiliates. In its email, Amazon called the bill "unconstitutional" and "counterproductive."

When has that ever stopped anyone from raising taxes? In fact, it is probably an incentive for most Democrat legislators.

Passage of the law, which is projected to net $200 million annually, adds California to a growing list of states that have enacted such legislation in hopes of bringing in more tax revenue.

And how much money will California lose when the people who need Amazon for their livelihood move out of the state?

Billions of dollars are at stake as a growing number of states look for ways to generate more revenue without violating a 1992 U.S. Supreme Court ruling that prohibits a state from forcing businesses to collect sales taxes unless the business has a physical presence, such as a store, in that state.

Which, of course Amazon does not have in California. But that won’t stop the Democrats in the California legislature or Governor Brown. They see a source of money which they can use to buy votes, and they aren’t going to let any petty Supreme Court rulings get in their way.

When consumers order from out-of-state retailers, they’re supposed to pay the tax that is due, but they rarely do and it’s difficult to enforce.

States are trying to get around the Supreme Court restriction by passing laws that broaden the definition of a physical presence.

And why not? Since according to leftist thinking, law – even words — are just tools to power. They have no real meaning.

Online retailers, meanwhile, are resisting being deputized as tax collectors.

California will become the latest state in which Amazon has parted ways with members of its Amazon Associates Program. Already it has said goodbye to affiliates in states including Arkansas, Connecticut and Illinois due to the passage of similar online sales tax laws. Smaller competitor Overstock.com Inc. has shuttered its affiliate programs in several states due to the laws as well.

So it’s pretty sure that Amazon is not bluffing. By the way, note how the AP does not give an estimate as to how much revenue has been lost in those states.

California passed such a law in 2009, but then-Gov. Arnold Schwarzenegger vetoed it.

Proving once again that despite everything there still is a dime’s worth of difference between the two parties in California.

This article was posted by Steve on Thursday, June 30th, 2011. Comments are currently closed.

9 Responses to “Amazon Will Drop Its CA Affiliates If Taxed”

  1. oldpuppydixie says:

    GOOD for Amazon. A corporation actually showing a backbone in the face of leftist confiscation tactics. It might be a FIRST!!!

  2. usmcmgb says:

    Connecticut did the exact same thing as part of it’s budget and Amazon did the exact same thing. They cut ties with all of their afflliates in the state. Good on Amazon!

  3. Rusty Shackleford says:

    When one thinks about it, democrats simply think that charging for the movement of money, which is what a tax is, without actually doing any labor at all, is the most often practical method for stealing money. No democrat I’ve ever talked to has been able to explain how such a thing is justifiable. For example,I’ll pull out a dollar and a quarter and tell the democrat that, in the perfect utopia, if they borrowed that dollar and a quarter from me to buy a Coke, they would never be able to buy the Coke to begin with because the government would want their quarter first. This usually results in a curious, crumpled brow from the democrat.

  4. Right of the People says:

    The libs have been looking for a way to tax the Internet almost since its inception. The idea that commerce is going on that they can only tax once (when the retailer has to pay their corporate income tax) pains them so much they get an ice cream headache.

    the libs figure if they can tax other people enough, they won’t ever have to work, that is their utopia, each to their needs and they need a lot.

  5. David says:

    This isn’t just about big business like Amazon. Sure the largest chunk of money will come from them but the internet is the business platform for the majority of small business (like my wife who makes specialty wedding decorations). As people who try and follow every onerous tax rule this would make it nearly impossible. Are we going to have to file taxes in every liberal state? We receive no benefits from the state of CA, we will not give them a dime!

  6. Tater Salad says:

    California, you now will become “isolated” from the rest of the country except with any other state with the same type of tax on the internet. Have fun going bankrupt. You thought the loss of business’s in California were bad up until now, watch, it is going to get worse and rightfully so. You really are a progressive/liberal taxing type of state. Bankruptcy is your only outcome………wait and watch! It is going to happen. I for one will not purchase any items over the internet from companies in Calfornia.

  7. BillK says:

    Cutting off their affiliates has become Amazon’s standard response to this type of thing, and good for them – they did the same thing in Colorado.

    Colorado also required that Amazon report a total sales amount to residents so they can self-report – and Amazon refuses to do that as well. (Once again, good for them.)

    Personally I think there would be a far greater outcry were say, Amazon to refuse to sell to Californians than Amazon’s business would be hurt by the move – a move I could completely see Amazon making should worse come to worse.

  8. usmcmgb says:

    Connecticut (and other states as well I’m sure) actually has a block on their state income tax form (grrrrrrrrrrr…) where you are supposed to fill in all purchases made on the internet (or anywhere out of state for that matter) and pay the 6% (6.35% as of today) state sales tax on those purchases. It’s the only time I get a chuckle while doing my taxes every April. Riggggggght. I wonder if all those libs so eager to raise taxes every time you turn around actually pay that tax. I highly doubt it. As a matter of fact, I wonder if they actually recover the cost of the ink they use to put that on the tax form. Probably not. Like every other liberal idea I’m sure it’s do as I say and not as I do. Reminds me of when I was at our local trash transfer station a few weeks back. I had a pick-up truck full of cardboard that I was throwing away and some burned out 60’s love child (female) came up to me and started berating me for not throwing the cardboard into the special cardboard bin about a half mile away. I started in on my anti-recycling tirade which I use on all liberals who start in on the wonders and beautifulness of recycling (uses more energy than it saves, yada, yada, yada) and then I told her if she’s that concerned, I’d happily throw the cardboard into her car and SHE could drive it over to the cardboard bin herself. The peaceful, tolerant of all, Mother Earth worshipper promptly gave me the finger, a big F**k Y*u and stalked off with me telling her have a good day. Oh yeah. She was driving a new Chevy Suburban too. Go save the earth somewhere else honey.

  9. tranquil.night says:

    Amazon is gone without remorse, and they won’t be the end. Good on CEO Bezos for asserting a business’ rights.

    Stacy McCain on Tax as Tarriff, Bezos as Galt, and California off in Moonbeam land: http://theothermccain.com/2011/07/01/jeff-bezos-is-john-galt/

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