California Calling…
California Governor Jerry Brown signed legislation today requiring any on-line retailer with affiliates located in the state to collect the state’s sales tax on all purchases made by Californians whether or not made through those affiliates. Supporters figured the California market was too large for on-line retailers to disown their affiliates.
Amazon.com terminated the accounts of all 25,000 affiliate residents in the state today. Overstock.com terminated all of their affiliates in California as well. Amazon.com itself continues to have no physical presence in California, so the state isn’t likely to begin collecting sales tax on Amazon’s internet sales. 25,000 Californians lost an income source, however. That worked well, didn’t it?
FWIW, Associates aren’t the storefronts and other sellers seen on Amazon and other websites. Sales tax has always been collected on any sales by businesses and independent sellers physically located in California. Associates are more likely to be bloggers and others who don’t actually sell or stock anything. They earn referral fees (commissions) if someone clicks through from their website and makes a purchase from Amazon.com or any of its independent sellers. Commissions are reported to the state as taxable income.
Depending on one’s point of view, this is sad or humorous. This Los Angeles Times article seems clueless to me, but that seems to be the way things are at the state’s largest-yet-ever-shrinking newspaper.
Ambiance 
Tim (formerly Theo Boehm) said,
July 1, 2011 at 3:13 am
Years ago when I lived in the formerly Golden State during the first Jerry Brown administration, I was friendly with a guy who eventually became mayor of a small, coastal town. He had been professionally involved with human services or academia for most of his working life and was a lifelong Democrat. But he was more of an expansive, old-fashioned Pat Brown Democrat of the sort Californians who can, now remember fondly.
Once, after another similar, now dimly-recalled performance by Governor Moonbeam, he said to me, “Looks like we’re going to change the state motto from ‘Eureka’ to ‘End Bothersome Commerce.'”
Even after shoveling 110 inches of snow this past winter, I can’t tell you how happy I am to now live in Massachusetts, where the state motto ought to be, “At Lease We’re Not Insane.”
karen said,
July 1, 2011 at 8:45 am
He seems right in sync w/our other Moonbeam son– Obama.
I saw a clip where Halperin called Obama ~dick-ish~ saw that on Althouse and read all of the comments, t’boot. I heard that presser and cannot for the life of me understand how Obama can come off as making any kind of sense. Holy crap– it’s 2011, not 2008. He sounds exactly like he did while campaigning against W way back then.
Right on ~Target~, but not through Amazon in CA.
wj said,
July 1, 2011 at 11:20 am
Dealing with sales from out-of-state vendors has been a problem for California (and, I suspect, other states with a sales tax) even when it was Sears Roebuck doing catalog sales, long before the Internet. Legally, any sale to a resident of California is suppose to result in the payment of tax, either “sales tax” or “in lieu of” sales tax; in practice, sales from out of state never do and never have. And over the years California has repeatedly (not just this time) tried various ways to overcome that.
This one is having negative consequences, and didn’t work. Guess what — none of the previous tries worked either. Think of it as a long series of experiments — not unlike Edison, before he finally found the answer for one of his inventions, we are still looking for the one that finally works.
So this isn’t a matter of this particular governor, or this particular legislature (whatever their short-comings in general). It’s about dealing with the need, as I see it, to significantly change the way that we fund the functions of the state. And, given out disfunctional government, and the lack of sanity among the general population on any subject containing the word “taxes,” the kind of change required is not real likely. Everybody would focus on whatever tax was being raised, and totally ignore the fact that another tax of the same size was being eliminated — and go ballistic as a result.
A said,
July 2, 2011 at 12:18 am
I’m already disappointed in Jerry Brown, just as I’m disappointed in Obama.
Not that both aren’t dealing with many, many difficult and entrenched situations, but for some reason I was (evidently naively) hoping for much more from them.
justkim said,
July 5, 2011 at 9:22 am
Here’s a story about Amazon’s dealings with Texas regarding the sales tax issue.
http://www.statesman.com/news/texas-politics/amazon-sweetens-job-offer-texas-lawmakers-dont-bite-1558831.html