Stealth Amazon Tax Law Passes in California

Facing a requirement to pass a budget or not get paid yesterday, California legislators used a "fake bill" that had quietly sat for a month to suddenly change it and add an Amazon / Internet sales tax, and pass it as part of a budget within the last 24 hours.

The other Internet bills that had been debated in California for months are still dead.

That is how California politics works.

Here's the details ...

AB28 aka AB28x aka ABX1 28 was just amended, passed, and sent to Governor Brown for signature. It provides that:

Any retailer worldwide, with total yearly sales to Californians (online and offline) of $500,000 or more of tangible personal property, with at least $10,000 referred by Internet affiliates, must pay the California sales/use tax.

The referral is direct or indirect. Thus, using Commission Junction should invoke the $10,000 test.

There is a Google exception so buying Adwords does not count.

There is an additional provision saying any retailer worldwide, with wholly owned subsidiaries or businesses in California, like Amazon does, is also subject to the tax.

This is what happens next ...

Governor Brown has less than 2 weeks to sign the budget. The last second budget deal also raised the sales tax on all Californians, raised the fee to license cars, added a firefighters fee on some homeowners, and gutted state colleges.

Unless Republicans come up with a better budget solution shortly, Brown will either sign or veto the bill.

Brown has wanted a special election where voters agree to numerous tax increases, but Republicans have refused. Given recent polling showing a proposed tax vote would go down in flames, there are really good odds before the end of the month Brown will sign this bill and Amazon will immediately drop California affiliates.

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