Amazon terminates California affiliates

California tries to kill another golden egg-laying goose

California-based Amazon affiliates have been receiving this email from Amazon.com, in preparation for California's ill-advised and unconstitutional effort to force state sales tax collection duties upon Amazon.com.

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

So there you have it.

Amazon affiliates in California are going to get the shaft if The Big Brown One passes legislation establishing a sales tax nexus based on affiliate relationships with California-based web sites.

California won't see a dime of additional sales tax from Amazon. It will lose income taxes from the California-based Amazon affiliates.

California residents will continue to shop online at Amazon.com, and will avoid paying California sales taxes (yes, they are supposed to report and pay these sales taxes on their annual state income tax returns, but the legislation under consideration will do nothing to increase the compliance rate).

California Amazon affiliates suffer theft

Thousands of Calfornia-based Amazon affiliates will suffer a loss as a result of this travesty.

Loss of income. Loss of time. Loss of investment.

Loss of hundreds if not thousands of hours of time and energy put in to building an affiliate sales business around Amazon or Overstock.com.

They will not hold Amazon and Overstock to blame for their loss. They will blame the California retailers who supported this legislation, they will blame the California legislature, and they will blame Governor Jerry Brown if he signs the budget legislation.

Notice a trend? Source: Joseph Vranich

Perhaps it's time to organize a boycott of the big box retailers (K-Mart, Wal-Mart, etc), since they're a major force pushing this legislation.