California had joined other states in passing its own e-commerce affiliate tax. Amazon dropped affiliates in many other states as similar (but unequal) laws have been haphazardly passed, but their reinstatement is a surprising move that shows Amazon hasn’t turned their backs on the issue.
When Governor Jerry Brown signed the repeal, Booth emailed Amazon to ask the question many of us California affiliates had: would Amazon now reinstate their California-based Associate accounts?
He received this reply from Amazon today:
As you may have heard, California Governor Jerry Brown has signed legislation repealing the law that forced us to terminate our California Associates.
We're working to relaunch the Amazon.com Associates Program in California as soon as possible. In the next few days, we'll reach out to all affected past Amazon.com Associates with information how to re-open their accounts.
We look forward to seeing you again soon.
The passing of California's state tax law blindsided many, and the issue is a complex one involving State and Federal tax laws, big-box retailers, booksellers and doublespeak PR campaigns, and an array of small business owners caught in the crossfire.
California Governor Jerry Brown signed a tax bill that forced out-of-state retailers to collect sales tax on purchases made by California residents if those retailers had a "nexus" within California. Upon the signing of the bill, Amazon immediately terminated its thousands of California-based Associates thus eliminating the "nexus". Shortly thereafter, Amazon began a referendum process to allow California voters to overturn the new law.
After the Board of Equalization declared that Amazon still had nexus in the California, on July 7, Amazon formally filed a request with the California Attorney General’s office for a voter referendum to overturn AB 28X.
Still, then-former Amazon Associates held no hope of getting their accounts back, there was discussion about small business owners dependent on Associate income leaving the state, and those of us Associates with thousands of links (in my case, links going back ten years) felt like we'd been hung out to dry in more ways than one.
Now it looks like they will put their money where their mouth is and welcome back their California Associates.
Scrambling for tax money, states have been trying to redefine ‘physical presence’ - and plainly put, Amazon thinks what these states are doing is unconstitutional.
In case you're wondering about Amazon and the state-by-state sales tax fight, it’s not as simple as saying that Amazon is “trying to avoid paying sales tax.” In fact, that’s not the case at all. The new state laws are specifically for affiliates: Amazon collects sales tax in Kansas, Kentucky, New York, North Dakota and Washington - the states where Amazon has stores or offices.
In the U.S., the Constitution prohibits states from interfering in interstate commerce, and there was a Supreme Court case decades ago that clarified that mail-order companies, because the Internet didn’t exist then, would not be required to collect sales tax in states where they didn’t have what’s called a nexus.
Bezos also flat-out stated that Amazon would like Congress to create a national sales tax system, and said Amazon would support the ongoing Streamlined Sales Tax Initiative. Its aim would be to unify sales tax practices in all U.S. states.
What emerged a month after the California tax law Amazon Associates incident is that big-box retailers like Wal-Mart stand behind the the state tax law push.
California’s internet tax battle revealed a clash of retail titans Amazon.com and Wal-Mart. Turns out that Wal-Mart and company also had no problem making pawns out of American booksellers and consumers.
Wal-Mart (along with Target, Overstock.com, Target, Best Buy, Home Depot and Barnes & Noble) are behind the propaganda-heavy “Alliance for Main Street Fairness” PR campaign. They’re the ones pushing states to make the new tax laws, while making no bones about the fact that they’re after Amazon.com on a nationwide scale.