California tax law forces Amazon to withdraw associates program

amazonAmazon has been butting heads with many states that feel the e-commerce giant needs to be paying taxes alongside brick-and mortar businesses. Now, Amazon has vowed that it will terminate its Callifornia Associates Affiliate program in response to a sales tax bill part of an effort to balance the state’s budget. The Amazon ax was just waiting for Jerry Brown to sign the bill into law, and since he’s done so, there’s nothing standing in the way of making good on their threat.

The new law, starting friday, collects sales tax when commissions are paid to Internet sites in California (affiliates) as well as from companies with a physical presence in the state. There are roughly 25,000 affiliates located in California garnering referral fees from the program.

Both Amazon and Overstock.com say that they will stop paying out commissions on those referrals. According to the LA Times, these affiliates combined paid $152 million in California income tax in 2010, but many will most likely be leaving the state thanks to the legislation. Here’s a link to Amazon tax reactions on twitter.

Amazon protests that this bill is unconstitutional. Dubbed the Amazon Tax, this piece of legislation closed a supposed loophole that allowed online companies to skirt through. In 1992, the US supreme court ruled that states couldn’t collect a sales tax on business without a physical presence in the state, which included the Seattle based Amazon company.

California officials expect to raise $317 million annually from the new budget legislation. The basic sales tax will also be dropping to 7.75% by the end of the week, so these new events may lighten the blow of Amazon pulling out. The sales tax passed two weeks ago, but Jerry Brown had vetoed the entire budget bill at the time. Amazon sent out the following email to affiliates, detailing its position and the consequences if the law become reality.

“Hello,
For well over a decade, the Amazon Associates Program has worked with thousands of California residents. Unfortunately, a potential new law that may be signed by Governor Brown compels us to terminate this program for California-based participants. It specifically imposes the collection of taxes from consumers on sales by online retailers – including but not limited to those referred by California-based marketing affiliates like you – even if those retailers have no physical presence in the state.

We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.

As a result, we will terminate contracts with all California residents that are participants in the Amazon Associates Program as of the date (if any) that the California law becomes effective. We will send a follow-up notice to you confirming the termination date if the California law is enacted. In the event that the California law does not become effective before September 30, 2011, we withdraw this notice. As of the termination date, California residents will no longer receive advertising fees for sales referred to Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com. Please be assured that all qualifying advertising fees earned on or before the termination date will be processed and paid in full in accordance with the regular payment schedule.

You are receiving this email because our records indicate that you are a resident of California. If you are not currently a resident of California, or if you are relocating to another state in the near future, you can manage the details of your Associates account here. And if you relocate to another state in the near future please contact us for reinstatement into the Amazon Associates Program.

To avoid confusion, we would like to clarify that this development will only impact our ability to offer the Associates Program to California residents and will not affect their ability to purchase from Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com.

We have enjoyed working with you and other California-based participants in the Amazon Associates Program and, if this situation is rectified, would very much welcome the opportunity to re-open our Associates Program to California residents. We are also working on alternative ways to help California residents monetize their websites and we will be sure to contact you when these become available.

Regards,

The Amazon Associates Team”

Apple

Leaked memo: If your MacBook keyboard dies, Apple will fix or replace in one day

If your Apple MacBook keyboard is problematic, getting it fixed at a Genius Bar just got a lot easier. Apple has now mandated that its Geniuses repair or replace MacBook keyboards by the next working day.
Movies & TV

The best movies on Amazon Prime Video right now (April 2019)

Amazon Prime Video provides subscribers with access to a host of fantastic films, but sorting through the catalog can be a major undertaking. Luckily, we've done the work for you. Here are the best movies on Amazon Prime Video right now.
Movies & TV

Skip the flowers and sunshine this spring and watch the best shows on Hulu

It's often overwhelming to navigate Hulu's robust library of TV shows. To help, we put together a list of the best shows on Hulu, whether you're into frenetic cartoons, intelligent dramas, or anything in between.
Movies & TV

The best shows on Netflix right now (April 2019)

Looking for a new show to binge? Lucky for you, we've curated a list of the best shows on Netflix, whether you're a fan of outlandish anime, dramatic period pieces, or shows that leave you questioning what lies beyond.
Computing

Worried about your online privacy? We tested the best VPN services

Browsing the web can be less secure than most users would hope. If that concerns you, a virtual private network — aka a VPN — is a decent solution. Check out a few of the best VPN services on the market.
Computing

In 2019, laptops are better than ever. Here are the best of the best

The best laptop should be one that checks all the boxes: Great battery life, beautiful design, and top-notch performance. Our picks for the best laptops you can buy do all that — and throw in some extra features while they're at it.
Product Review

Still waiting for a new Mac Pro? Corsair’s mini PC has all the power you'll need

With a modern 12-core Intel Core i9-9920X processor, Nvidia’s RTX 2080 Ti graphics, and 32GB of RAM, the Corsair One Pro is designed to woo creatives who demand more power from Apple’s Mac Pro. Like the Mac Pro, the best part of this PC…
Computing

USB drive issue blocks some PCs from receiving Windows 10 May 2019 update

A USB drive error resulted in some PCs being blocked from receiving the Windows 10 May 2019 update. Microsoft decided to block eligible PCs with USB drives or SD cards attached from getting the update until the error is fixed.
Photography

Free your digital memories, and frame them, with the best photo printers

Printed photos are experiencing a revival at the moment, but you don’t need to go to a special lab. Here’s our favorite options for making quality prints, from pocket-sized printers to wide-format photo printers capable of spitting out…
Cars

Nvidia agrees with Tesla’s take on self-driving cars, but corrects specifics

Nvidia vice president Rob Csongor agreed with broad statements by Elon Musk at Tesla's April 22 Autonomy Investor Day. Csongor then took exception to what he termed were inaccuracies about Nvidia's self-driving car chip.
Computing

Tablet or notebook? Our favorite 2-in-1 PCs give you the best of both worlds

If you can’t decide if you need a tablet or a notebook, then don’t bother. The best 2-in-1 laptops are both, and they can provide all the power you need. Check out our list for the best 2-in-1s for any user.
Computing

Amal and George Clooney want to change the world. Can Microsoft help?

Microsoft and The Clooney Foundation for Justice (CFJ) unveiled the TrialWatch app Thursday morning, a new tool in CFJ’s ongoing TrialWatch effort to shine a light on injustice in courts around the globe – which too often are simply…
Computing

These are the best 13-inch laptops you can buy right now

With so much choice out there, how do you know which are the best 13-inch laptops? They should have beautiful screens, long battery life, and remain light and portable. This is a list of our favorites.
Computing

These gaming monitors will transport you to another dimension

What are the best gaming monitors you can buy right now? We select five that are all priced under $900 packing premium technologies like G-SYNC and FreeSync, high resolutions, and fast refresh rates.