Stealth Amazon Tax Law Passes in California

21 replies
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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#amazon #california #law #passes #stealth #tax
  • Profile picture of the author SteveJohnson
    Originally Posted by kindsvater View Post

    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.
    Wonder if they will also close/move their subsidiary companies out of California...
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  • Profile picture of the author charlesetna
    I wonder if this means Amazon affiliate commissions are taxable as well? There are several other online retailers that should be pissed about this.

    I'm used to paying outrageous sales taxes here (8-10%) so it's all the same for me.
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    • Profile picture of the author kindsvater
      Originally Posted by charlesetna View Post

      I wonder if this means Amazon affiliate commissions are taxable as well? There are several other online retailers that should be pissed about this.

      I'm used to paying outrageous sales taxes here (8-10%) so it's all the same for me.
      Affiliate commissions have always been taxable in California. They fall under the income tax.

      The sales tax is not all the same under this bill. Last month you could make money referring buyers to Amazon. Next month you may be banned. Big difference when that "outrageous" tax (which is going up in this bill) must be paid by Amazon.

      Of course, maybe Amazon will pay the tax? Or not nuke affiliates while it sues in court if it can get a delay on implementation of the bill.

      .
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  • Profile picture of the author kindsvater
    P.S. - If there is a California address in your Amazon Associates account, what the heck are you waiting for?

    Are you just meekly sitting there with a deer in headlights expression waiting to be punched in the face? Waiting to be drop-kicked? Waiting to have less money to put food on the table?

    Or are you going to spend the next hour figuring out how to fix this problem?

    Get off the forum - unless it is to search for other threads on what people are doing to fix their address problem. Get moving. Now.

    .
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    • Profile picture of the author flyngryter711
      Originally Posted by kindsvater View Post

      P.S. - If there is a California address in your Amazon Associates account, what the heck are you waiting for?

      Are you just meekly sitting there with a deer in headlights expression waiting to be punched in the face? Waiting to be drop-kicked? Waiting to have less money to put food on the table?

      Or are you going to spend the next hour figuring out how to fix this problem?

      Get off the forum - unless it is to search for other threads on what people are doing to fix their address problem. Get moving. Now.

      .
      Is there anything you recommend to legally get around this or can link to to get us started in the right direction if we live in CA?
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      • Profile picture of the author Gaz Cooper
        Can't you just get a virtual office or mail forwarding address in a state that is not affected.

        That way you have an office outside of CA and Amazon will never know the difference and you would have an address to send your checks to.

        For the ones who make bigger checks just open a Corp in Delaware real cheap these days


        Kickin It On Amazon

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        • Profile picture of the author Heidi White
          Originally Posted by GazCooperOnline View Post

          Can't you just get a virtual office or mail forwarding address in a state that is not affected.

          That way you have an office outside of CA and Amazon will never know the difference and you would have an address to send your checks to.

          For the ones who make bigger checks just open a Corp in Delaware real cheap these days


          Kickin It On Amazon

          Gaz Cooper
          Anyone got a list of non-affected v. affected states? Any forums devoted strictly to Amazon sales not on Amazon.com?
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  • Profile picture of the author mnonline
    we are already paying income tax. Why on earth we have to pay sale tax online again? Isn't offline sale tax is already a burden? I'm not in favor of the govt on this. There are just too many taxes already. Taxes will only hurt consumers and retailer like Amazon during this kind of economy.
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    • Profile picture of the author Martin Luxton
      So if Google got an exemption why couldn't Amazon? Martin
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      • Profile picture of the author CDarklock
        Originally Posted by Martin Luxton View Post

        So if Google got an exemption why couldn't Amazon? Martin
        Amazon doesn't employ a bunch of highly-paid Californians who pay state income tax.
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  • Profile picture of the author sbucciarel
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    Another states bites the dust. I'm in VA and it doesn't affect me except that I build sites to sell to others, and have in the past geared the monetization towards Amazon and I will change that now.

    As for Virginia, I've never made much on Amazon anyway, so it wouldn't be a personal loss to me if VA does this. But there are enough states doing this now that I will eliminate Amazon as a monetization method from my sites.
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  • Taxes have to go up and nothing will ever stop that, this example shows the direction we are going in.
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    • Profile picture of the author kindsvater
      Update:

      Governor Brown immediately vetoed the entire budget package in a stunning move. That included the Amazon provisions.

      But before you get excited, that was just temporary collateral damage until a new budget bill can be drafted.

      It was reported today in Sacramento that Brown and the Democrats who control California's legislature have now agreed upon a new budget bill and it will include the "Amazon tax".

      .
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      • Profile picture of the author Peter Clark
        Originally Posted by kindsvater View Post

        Update:
        Governor Brown immediately vetoed the entire budget package in a stunning move. That included the Amazon provisions.
        .

        Originally Posted by kindsvater View Post

        But before you get excited, that was just temporary collateral damage until a new budget bill can be drafted.

        It was reported today in Sacramento that Brown and the Democrats who control California's legislature have now agreed upon a new budget bill and it will include the "Amazon tax".
        .


        So basically, its still going to happen. Yikes.
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    • Profile picture of the author Blazon1
      Originally Posted by HelpingYouBeAnExpert View Post

      Taxes have to go up and nothing will ever stop that, this example shows the direction we are going in.
      Taxes go up because our politicians have a spending addiction that actually surpasses the taxes they collect. And it never ends, but it has to or the economic collapse will be swift and devestating.
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  • Profile picture of the author aeros
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    • Profile picture of the author myob
      It's easy to have such a flippant attitude when obviously you're not making any money as an affiliate. But there are hundreds of Amazon affiliates in California who are earning 5 figure monthly incomes or more. As discussed in other threads, there are several options available for affiliates in nexus states where the law has passed.
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    • Profile picture of the author OneManSEO
      Originally Posted by aeros View Post

      Don't whine, always look for the "opportunity" in any situation. Now you can go out and find independent affiliate programs that pay a decent commission, I never cared for Amazons attitude anyway, if they are willing to dump their affiliates so easily who have made them a **** load of money I say screw Amazon, like most businesses these days they only care about their bottom line, fact is they could afford the tax and be just fine. BoycoTt AMAZON!!
      Go move to Illinois or California....they need your money.
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    • Profile picture of the author Mike Hill
      Originally Posted by aeros View Post

      Don't whine, always look for the "opportunity" in any situation. Now you can go out and find independent affiliate programs that pay a decent commission, I never cared for Amazons attitude anyway, if they are willing to dump their affiliates so easily who have made them a **** load of money I say screw Amazon, like most businesses these days they only care about their bottom line, fact is they could afford the tax and be just fine. BoycoTt AMAZON!!

      Every politician only cares about themselves. They think they are better than us. They create laws at will but they are not subject to the same laws. They are paid a pension for the rest of their lives, they conduct insider trading. Did you know an elected official's net worth increases dramatically after entering office. It's because they decide who they help and who they screw. Do you think their money is in the companies they end up screwing? I think not... this is insider knowledge (a.k.a. insider trading)

      You think big businesses like Amazon only care about themselves but what about these crooked politicians?
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  • Profile picture of the author tecHead
    Learn to diversify. If you can't do it in-house and control it; diversify what you outsource.

    You know that age old adage that says.. "Never put all your eggs in one basket"
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  • Profile picture of the author OneManSEO
    I've lived here 30 years...this state has gone to hell. The corruption angers me so much...write in an exception for Google, but screw Amazon. That is so unAmerican to me.

    I was born and raised here, but soon enough I'll be an ex-Californian and will never return. Good riddance.

    Of course, I've been saying that for years...I almost have my wife on board - a few more slaps to our faces by those who "represent"(the Unions) us and she'll be on board. She really likes Colorado, so hopefully we'll be able to make it a reality before too long...
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