Notice re Amazon Commission Cut-off for Californians

[Forum Boss]

We know that many Forum members have their own small businesses and websites. On some of those websites, you may have commission-generating links to Amazon.com, which operate under an affiliate program. Well, as of 6/29/2011, you are SOL if you live in California. Amazon has terminated the contracts with all California-resident affiliates (individual or corporate) in response to a law signed yesterday that tries to compel large web business to collect and remit sales to California.

Your only option, if you wish to retain your Amazon commission revenue, is to set up a new payee entity. This will have to be a person or business located in another state.

http://www.latimes.com/business/la-fi-amazon-tax-20110630,0,4344787.story

Quote:"Many of about 25,000 affiliates in California, especially larger ones with dozens of employees, are likely to leave the state, said Rebecca Madigan, executive director of trade group Performance Marketing Assn. The affiliates combined paid $152 million in state income taxes last year, she pointed out. One affiliate, Ken Rockwell of San Diego, the owner of a 12-year-old photography website, planned to move out of state: 'Will it be Las Vegas or Scottsdale or Ensenada? -- It's a question of where, not if.'"

Here at AccurateShooter.com, which is based in California, this Amazon policy change has just cut off a revenue source producing a few thousand dollars annually. That's not welcome, as you might expect -- hence we renew our request for donations to help support the site. If you use our FREE classifieds to buy and sell items, please consider making a small donation to help defray our site expenses. A dollar a month, or $12.00 per year is less than the price of cup of coffee.

You can quickly and easily make a secure donation via PayPal by clicking on the yellow "Donate" button on the right side of this page. You do not need a registered Paypal account to donate -- you can use a credit card or E-check. NOTE: please list your Forum nickname in the optional memo field if you donate. This lets us give recognition to those who are helping the site.

Thanks for all your support!

Paul McM
Webmaster

If you don't want to use PayPal, you can make a check payable to "Jason Baney".
Jason handles the direct donations for me. Please mail your check to:

Jason Baney
P.O. Box 105
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NOTE: If you send a check, please include a note with your real name and Forum "handle" so we can acknowledge you as a valued "Site Contributor".

 

[Thud]

Paul,
Please email me your address as I don't deal with paymaybepal.
Thanks, Thud

 

[jadams]

There are those of us that would like to make a donation to support the accurate shooter site. But,
making a donation thou Pay Pal is not ( read cold day in hell first ) an option for me or us.
I will be glad to send a check today to support the site:

Please give us a direct place to send our funds. Thanks, John

Yo: As you know by my past donations, I do have you home address. But
Hopefully there are a LARGE group of readers & or members that that do not have that
information that would like to make donations.

If I need to set up a postal box here in Fallbrook and open a bank account in your name to receive funds
for you I would be glad too,

 

[queen_stick]

Why would Amazon cut off the revenue sources out of CA, instead of simply collecting taxes and paying the state? That way sites like this could remain a source, but the payout would less the CA state tax. I'm sure there's some legal reason that I'm not aware of...

This law (if I'm reading it correctly) also assumes that any company/organization in CA, with links to Amazon, counts as a 'brick and mortar' presence for Amazon. I understand why CA would want to do that, but it doesn't really make any sense. In a sense, that would give Amazon (and all other online retialers) a footprint in every state in the country, even though they don't physically operate out of all of them. Just seems crazy...

From another perspective, the current laws are old... They were written before online sales really took off. Laws that are 20 years old simply don't apply to today's market. There are loopholes that companies can use to avoid paying out taxes and fees by using the Internet as a sales medium. Perhaps the old laws need amended, but new radical laws don't seem to be a good answer.

Anyway... I'm about due for a donation. I'll send er' over soon...

 

[wvuredneck09]

COMI-fornia does it again, so much for free trade and all that crazy stuff that built this country, the government must stick their noses in everyone's cracks. I hope states start using their sovereignty and that way we as Americans can fight for what is right in this country by moving out of socialist states to true conservative states like this whole country used to be.

 

[RJinTexas]

Paul,
I'm also due for another donation. My Paypal payment of 25.00 in on it's way.

Regards
RJinTexas

 

[CatShooter]

Why would Amazon cut off the revenue sources out of CA, instead of simply collecting taxes and paying the state? That way sites like this could remain a source, but the payout would less the CA state tax. I'm sure there's some legal reason that I'm not aware of...

Because it opens them up to all kinds of business problems, like audits from each state that passes a law like it (Connecticut has also passed a law called, amazingly, "The Amazon law").

One of the advantages that internet companies have, that allow you to buy stuff so cheap, it the tremendous reduction in paperwork and staff to keep track of all the paper work.

If they have to keep rack of all that crap and put up with audits from each state (and county, and city) that has such a law, they will go under, or raise prices.

From another perspective, the current laws are old... They were written before online sales really took off. Laws that are 20 years old simply don't apply to today's market. There are loopholes that companies can use to avoid paying out taxes and fees by using the Internet as a sales medium. Perhaps the old laws need amended, but new radical laws don't seem to be a good answer.

"There are loopholes that companies can use to avoid paying out taxes and fees"

No - Keep in mind that companies do NOT ever pay taxes, they collect them for the state or feds. Raise the taxes on business, and you raise the prices of the goods by 110% of the tax increase.

I don't know about you, but I (and about 100,000,000 people) think we already pay too much in taxes.

... and finely,

"... Why would Amazon cut off the revenue sources out of CA, instead of simply collecting taxes and paying the state?"

Businesses set up their operations models, based on the laws - when the laws are change (or states find loopholes) then maybe companies are just damn tired of the government that taxes everything, and makes laws to their convenience.

We often forget - the government is supposed to work for US, not the other way around!

Done with soapbox

 

[Forum Boss]

Why would Amazon cut off the revenue sources out of CA, instead of simply collecting taxes and paying the state? That way sites like this could remain a source, but the payout would less the CA state tax. I'm sure there's some legal reason that I'm not aware of...

Amazon would rather give up the California-origin referrals than collect and fork over 8.25% sales taxes to California. The amount at stake has been estimated at $170,000,000.

Thanks for your interest in donating -- we appreciate the help. It is tough when we establish a revenue source and then it is yanked out without warning. This happened first with Google's blackballing of the site ($90/day revenue loss), and now with Amazon. Google had approved the site a couple years back but then decided our gun content was "inappropriate". That's somewhat unfair as you'll see Google ads running on many other gun-oriented sites.

 

[jhord]

The time is coming when you will have to pay sales tax on any internet purchase you make. (well actually you do, they call it "use tax" and you are supposed to file it with your home state) The problem is trying to account for ~3100 different counties in the U.S. As an internet retailer that scares the crap out of me. I just hope whatever rule they come up with isn't stupid. (I know... fat chance)

 

[rcw3]

I can say flat out that if I was buying something off Amazon over the internet and in addition to the price and shipping an 8.25% sales tax showed up on on the checkout invoice - that would spell the doom for that sale. Amazon knows this will make them non-competitive in terms of pricing to the customers and they are doing this to stay alive and be competitive. I am sure Amazon does not want to do this, they feel compelled to do it!

 

[mgva]

As a small business, I have faced the CA problem. I had two sales reps in CA and according to CA that met I have a physical presence. Thus I owed sales taxes on all sales going back 10 years plus penalties and interest. The FED only requires records for 7 years. Doesn't matter.They will just use the highest sales figures for those three years. Cost me 10s of thousands of dollars in accounting fees and then have to figure each counties tax and city taxs. Don't do business in CA

 

[JRS]

There is a number of states with the same thing on their ballots right now. They are using every means available to come up with money to help balance the states budgets.

 

[queen_stick]

Thanks for your responses CatShooter and Paul.

It's an interesting topic that's worth paying close attention to... the Internet in general is still growing at an exponential rate. Laws like this will shape/define how it's used in the future. Much of what lawmakers face today, in regards to the Internet, is new territory. It's difficult to manage, maintain, and enforce rules, policies, and laws in a virtual monstrosity like the Internet; especially when "it" recognizes no physical boundary, like local, state, and federal lines. There is no clear and concise answer... that's why people will be upset, regardless of which group the law benefits (consumer, business, or government).

The people in CA might be somewhat happy... their taxes were just reduced!

This stuff can be as frustrating and confusing as it is interesting... that's the way she goes!

 

[CatShooter]

Thanks for your responses CatShooter and Paul.

"The people in CA might be somewhat happy... their taxes were just reduced!"

Actually, their taxes were not reduced. The people in CA just lost a convenient and economical source to buy stuff - so - ergo - their cost of living just went up

Remember this. You harass companies enough, and they move - first, it's to another state (Connecticut has lost 60% of it's small businesses over the past 15 years. Like Winchester, they went south!)

If you keep on harassing them, they go overseas - so keep on harassing Amazon, and they will move their corporate headquarters to the Cayman Islands - then what the hell do you do - they pay NO us salaries, NO corporate taxes, no nothing !!!

Our country is filled with cities that are barren and abandoned, like Detroit, because the "city fathers" saw the local businesses as a cow to be milked (just like CA and CT see Amazon as a cow to be milked) - when the businesses moved to a more friendly business climate, the cities just died!

My state is in a financial crisis because we drove our business out in the 80's and 90's cuz we wanted "the money".. now there are no jobs - we have aircraft engineers working at WalMart, stocking shelves.

Great thinking on the part of those "we" elect to make things better.

And they haven't learned yet, and in 2010, we elected the "spend-a-holic" of the century for our leader .

 

[wvuredneck09]

This truly is a shame but it is a mistake on the state level, dont forget that we all have bigger fish to fry on the national level that deserve just as much attention. Our federal government is blocking companies from moving plants now from "unfriendly" to friendly states, what exactly do you think they will do, HELLO CHINA! Also COMI-fornia supports china, just bought new bridges as part of the "shovel-ready jobs" from CHINA. So our tax dollars did support jobs, in China.

 

[JRS]

This truly is a shame but it is a mistake on the state level, dont forget that we all have bigger fish to fry on the national level that deserve just as much attention. Our federal government is blocking companies from moving plants now from "unfriendly" to friendly states, what exactly do you think they will do, HELLO CHINA! Also COMI-fornia supports china, just bought new bridges as part of the "shovel-ready jobs" from CHINA. So our tax dollars did support jobs, in China.

It is actually the CA. taxpayers who are paying for this. Bids were submitted by both union labor and their non union counterparts. As is usually the case, both were neck and neck. Not only did the steel come from China, the labor did also. How much of the clothing we wear, or our household items don't come from Asia or some other country? Take a look at the window sticker on your next auto purchase "made in USA". Final assembly, USA, 40% of parts from other countries, engine made in Mexico, transmission made in Canada, the remainder of the 40%..... you guessed it..... China.

 

[Forum Boss]

Amazon will continue to transact business with Californians and ship products to California. However, Amazon will simply stop sharing revenues with California "affiliates", i.e. both individuals and small businesses.

Amazon does have a physical presence in some stats, such as Arizona where Amazon maintains large warehouses. But Catshooter's surmise that a company like Amazon might eventually move overseas is not too far-fetched. Good luck then collecting all the taxes that may be due.

 

[wvuredneck09]

Agreed that on paper it looks like CA tax payers are paying for this but when you look at where the money really comes from it is every US tax payer. I'm not going to get into the union/non-union thing but the fact that my tax dollars are building a bridge made in china that I will never even use is a hard pill to swallow.

 

[nhm16]

I know Amazon has a competitive advantage over brick and mortar joints by not having to charge sales taxes for most places (their Seattle HQ was deliberately chosen over Silicon Valley for this very reason), but I think they realize sooner or later it will come to having to collect sales tax nationwide.

I bet the reason they are playing hardball with the states is that they are waiting/stalling and hoping for Congress to enact some sort of uniform measure, so that they don't have to deal with the sales tax vagaries of every city/state/county/other taxing jurisdiction in the country... having to do so would actually put them at a disadvantage over a local brick and mortar who really only has to worry about the sales tax laws of its specific locale.

 

[TheSnake]

Just sent 25.00 your way (PayPal). Love this site and want it to say afloat.