Thank god I don't make my living as an affiliate. Just received this email today:

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

stupid law in my opinion... Obviously the affiliates in California have to pay taxes on their earnings from retailers at the end of the year, so why does the State feel it necessary to also tax the end consumer because the affiliate is based in California? The retailer (Amazon in this case) is based elsewhere.

It's not Jerry Brown's fault alone. It's our entitlement state that will never address wasteful programs and pension plans that have gotten completely out of control.

Golden State lost its luster a long time ago. Speaking from personal experience, California (and especially San Francisco) is a decidedly business-unfriendly environment.

I say we flashmob them, steal their Kindles and rape their women.

yay more taxes.

BeggarEd;524149 said:

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stupid law in my opinion... Obviously the affiliates in California have to pay taxes on their earnings from retailers at the end of the year, so why does the State feel it necessary to also tax the end consumer because the affiliate is based in California? The retailer (Amazon in this case) is based elsewhere.

It's not Jerry Brown's fault alone. It's our entitlement state that will never address wasteful programs and pension plans that have gotten completely out of control.

Golden State lost its luster a long time ago. Speaking from personal experience, California (and especially San Francisco) is a decidedly business-unfriendly environment.

---

Is that why California is tied with Texas with the most Fortune 500 companies and would be the 8th largest economy in the world if it were its own nation?

Or does it have more to do with the fact that about half of all venture capital in the United States is found in California and California accounted for a little over a quarter of all patents issued in the United States in 2010?

Inquiring minds want to know.

yellerbear;524163 said:

---

Is that why California is tied with Texas with the most Fortune 500 companies and would be the 8th largest economy in the world if it were its own nation?

Or does it have more to do with the fact that about half of all venture capital in the United States is found in California and California accounted for a little over a quarter of all patents issued in the United States in 2010?

Inquiring minds want to know.

---

I'm sure this has nothing to do with the massive size of California.

Willgonnabaight;524162 said:

---

yay more taxes.

---

What is your alternative to this tax.

If I go into a store to buy something in CA I must pay a tax.
If I order something over the phone from outside of CA, I must pay a tax.
Why should a purchase be free of taxes just because it is on the internet and not in person or by telephone.

BTW I would rather this tax be paid by those who can afford it, rather than cutting critical services or cutting benefits to those who cannot afford it.

68great;524178 said:

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If I order something over the phone from outside of CA, I must pay a tax.

---

wrong

I equate Amazon avoiding charging/paying sales tax as corporations forming in Bermuda. They have found a backdoor to not paying/charging their fair share of taxes in order to have a competitive advantage and are bullying states around.

amazon's meteoric stock rise rivals that of apple. It can take the hit.

AU_Bears;524168 said:

---

I'm sure this has nothing to do with the massive size of California.

---

There are 33 Fortune 500 companies in the Bay Area alone. But how many were there 10 years ago when our population was still superior to all other states? Clearly, California isn't the anti-business state many attempt to paint it as. If it was, Wells Fargo -- the company with the longest tenure -- surely would have moved out by now. HP, Oracle, Cisco, Intel, Apple, Chevron, ConocoPhillips, etc etc etc seem to think California is a perfect place to start up a business.

Amazon wants to have its cake and eat it to. I, for one, will be avoiding them from now on as I don't like companies that attempt to brow-beat States into submission.

I don't make a living as an affiliate.

But I unloaded a bunch of stuff on Amazon in summer 2009, and I was thinking of doing the same thing again.

Oh, well, I guess I'll have to do ebay.

AU_Bears;524168 said:

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I'm sure this has nothing to do with the massive size of California.

---

Ah. Sure. California has 12% of the Nation's population.

That certainly explains why our economy is 65% greater than the Texan economy while we only have 47% more people.

And that really goes to show why California gets issued, per Capita, twice as many patents compared to any other state in the nation.

And it certainly explain why California is home to roughly 50% of the Nation's Venture Capital.

Sorry, when I hear people chime California being anti-business, it really is code for reducing business taxes and eliminating environmental regulations, two things which have contributed into making California great.

yellerbear;524216 said:

---

Ah. Sure. California has 12% of the Nation's population.

That certainly explains why our economy is 65% greater than the Texan economy while we only have 47% more people.

And that really goes to show why California gets issued, per Capita, twice as many patents compared to any other state in the nation.

And it certainly explain why California is home to roughly 50% of the Nation's Venture Capital.

Sorry, when I hear people chime California being anti-business, it really is code for reducing business taxes and eliminating environmental regulations, two things which have contributed into making California great.

---

Hello there intelligent argument, nice to finally meet you.

yellerbear;524163 said:

---

Is that why California is tied with Texas with the most Fortune 500 companies and would be the 8th largest economy in the world if it were its own nation?

Or does it have more to do with the fact that about half of all venture capital in the United States is found in California and California accounted for a little over a quarter of all patents issued in the United States in 2010?

Inquiring minds want to know.

---

Don't let the sheer mass of California's size and population fool you into this perpetuated myth of prosperity. Furthermore, just because there is a lot of ingenuity (i.e. patents) coming from CA, that doesn't mean it's a "business-friendly" state.

There is a reason why so many LLCs are organized in states like Delaware, and the disproportionately high state tax rates in California have a lot to do with that.

Another dumb California law - If you have an LLC, you get taxed on [U]unrealized[/U] gains at the end of the year. So basically, a business owner can't keep $20k in reserves in their business account at the end of the year without getting taxed on it.

Also, as an LLC, you get taxed on revenue in California. $800/year just for being an LLC, an additional $900 if you bring in more than $250k in a year, and it gets worse from there. Keep in mind that this is on top of every other tax.

With regards to San Francisco, between Payroll Tax, "Business Property Tax," and every other local ordinance, it's not easy to stay afloat.

Thankfully all this money helps fund the bloated pensions of government workers, social welfare programs that require no accountability from the recipients, and sex changes for city workers. :rant

yellerbear;524216 said:

---

Ah. Sure. California has 12% of the Nation's population.

That certainly explains why our economy is 65% greater than the Texan economy while we only have 47% more people.

And that really goes to show why California gets issued, per Capita, twice as many patents compared to any other state in the nation.

And it certainly explain why California is home to roughly 50% of the Nation's Venture Capital.

Sorry, when I hear people chime California being anti-business, it really is code for reducing business taxes and eliminating environmental regulations, two things which have contributed into making California great.

---

A different perspective:
http://super-economy.blogspot.com/2011/01/california-vs-texas.html

BeggarEd;524220 said:

---

Don't let the sheer mass of California's size and population fool you into this perpetuated myth of prosperity. Furthermore, just because there is a lot of ingenuity (i.e. patents) coming from CA, that doesn't mean it's a "business-friendly" state.

There is a reason why so many LLCs are organized in states like Delaware, and the disproportionately high state tax rates in California have a lot to do with that.

Another dumb California law - If you have an LLC, you get taxed on [U]unrealized[/U] gains at the end of the year. So basically, a business owner can't keep $20k in reserves in their business account at the end of the year without getting taxed on it.

Also, as an LLC, you get taxed on revenue in California. $800/year just for being an LLC, an additional $900 if you bring in more than $250k in a year, and it gets worse from there. Keep in mind that this is on top of every other tax.

With regards to San Francisco, between Payroll Tax, "Business Property Tax," and every other local ordinance, it's not easy to stay afloat.

Thankfully all this money helps fund the bloated pensions of government workers, social welfare programs that require no accountability from the recipients, and sex changes for city workers. :rant

---

Sounds like an LLC was not way the structure your business. Are you Michelle Bachman?

panoramicknob;524224 said:

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Sounds like an LLC was not way the structure your business. Are you Michelle Bachman?

---

A 2-person consulting-based partnership would not make lots of sense to structure as a C-Corp or S-Corp, at least for our purposes.

Why does a Minnesota congresswoman have anything to do with a debate about the business-friendliness of California? Oh that's right, because you want to dumb this down to a political Republican vs. Democrat, Liberal vs. Conservative p*ssing match. No thanks.

Maybe we should take a hard look at the most regressive tax that is in place in this country.

IMO, California should reduce the sales tax to ZERO. In other words, don't fight Amazon, join them.

Why? Because it is NOT deductible on the federal tax form (excepting specific instances). California should increase the state income tax to offset sales tax. That way, residents of the Golden State who itemize, would receive monies from the Federal Gov't (by listing their income tax as a deductible item on the Federal form) to offset the increase in income tax and wouldn't have to pay any sales tax.

I don't understand why the powers that be in this state don't stick the feds with the bill instead of us...

More evidence why Califonia is going down the dumper - stupid "leadership"...

BeggarEd;524223 said:

---

A different perspective:
http://super-economy.blogspot.com/2011/01/california-vs-texas.html

---

This doesn't lend a credibilty to your claims that, "California has lost it's luster" or that "it is anti-business". California has had more fortunate 500 companies sprout up in the past 10 years than any other state and it's not even close. 33 Fortune 500 companies currently reside in the Golden State -- just because you failed does not mean California is anti business.

yellerbear;524216 said:

---

Ah. Sure. California has 12% of the Nation's population.

That certainly explains why our economy is 65% greater than the Texan economy while we only have 47% more people.

And that really goes to show why California gets issued, per Capita, twice as many patents compared to any other state in the nation.

And it certainly explain why California is home to roughly 50% of the Nation's Venture Capital.

Sorry, when I hear people chime California being anti-business, it really is code for reducing business taxes and eliminating environmental regulations, two things which have contributed into making California great.

---

I don't think California's success has anything to do with environmental regulations or business taxes-this drives manufacturing away. The success is due to intellectual capital and Universities.

BeggarEd;524220 said:

---

Don't let the sheer mass of California's size and population fool you into this perpetuated myth of prosperity. Furthermore, just because there is a lot of ingenuity (i.e. patents) coming from CA, that doesn't mean it's a "business-friendly" state.

---

Well there are two issues that you are mixing together. First is a sales tax and second are taxes on business.

CA brick and mortor businesses are absolutely going to lose sales to internet companies that don't charge tax. That would be true whether CA has the best or worst taxes on businesses. It would be true whether the CA government overspends on wasteful programs or not. Charging sales tax on out of state mail order purchases will at worst have no effect on the business practices in CA, and at best it will help smaller retail business in CA by leveling the playing field, or any retailer with a physical presences that do hire local employees.

Basically, I don't see that your rant is on topic. I'm not disagreeing, but it's not really on topic.

BeggarEd;524220 said:

---

Don't let the sheer mass of California's size and population fool you into this perpetuated myth of prosperity. Furthermore, just because there is a lot of ingenuity (i.e. patents) coming from CA, that doesn't mean it's a "business-friendly" state.

There is a reason why so many LLCs are organized in states like Delaware, and the disproportionately high state tax rates in California have a lot to do with that.

Another dumb California law - If you have an LLC, you get taxed on [U]unrealized[/U] gains at the end of the year. So basically, a business owner can't keep $20k in reserves in their business account at the end of the year without getting taxed on it.

Also, as an LLC, you get taxed on revenue in California. $800/year just for being an LLC, an additional $900 if you bring in more than $250k in a year, and it gets worse from there. Keep in mind that this is on top of every other tax.

With regards to San Francisco, between Payroll Tax, "Business Property Tax," and every other local ordinance, it's not easy to stay afloat.

Thankfully all this money helps fund the bloated pensions of government workers, social welfare programs that require no accountability from the recipients, and sex changes for city workers. :rant

---

So? Delaware has a law that makes incorporating in Delaware easy. If you're in business in California, you know that most start-ups don't want to stay in the LLC stage, they usually go straight to or transition to a C-Corporation so it makes it easier for them to get bought out. One part of the legal business code a strong economy does not make.

BeggarEd;524227 said:

---

A 2-person consulting-based partnership would not make lots of sense to structure as a C-Corp or S-Corp, at least for our purposes.

Why does a Minnesota congresswoman have anything to do with a debate about the business-friendliness of California? Oh that's right, because you want to dumb this down to a political Republican vs. Democrat, Liberal vs. Conservative p*ssing match. No thanks.

---

Why did you want to supplement your views on business structure with gratuitous and rhetorical quips about taxpayer funded sex changes? Oh thats right, because you are homophobic.

No sales tax? But then people from out of state would come to California to buy goods, spurring growth. We certainly don't want that!

71Bear;524231 said:

---

Maybe we should take a hard look at the most regressive tax that is in place in this country.

IMO, California should reduce the sales tax to ZERO. In other words, don't fight Amazon, join them.

Why? Because it is NOT deductible on the federal tax form (excepting specific instances). California should increase the state income tax to offset sales tax. That way, residents of the Golden State who itemize, would receive monies from the Federal Gov't (by listing their income tax as a deductible item on the Federal form) to offset the increase in income tax and wouldn't have to pay any sales tax.

I don't understand why the powers that be in this state don't stick the feds with the bill instead of us...

More evidence why Califonia is going down the dumper - stupid "leadership"...

---

California has some very strong structural advantages that other states don't have. The tech culture is next to unbeatable in the bay area, and the fact that businesses can't enforce non-competes leads to more quality tech talent here than anywhere else.

Is the bay area the best place to start a small business unrelated to the tech industry? No, not by any stretch. For any tech business though, the benefits likely outweigh the negatives.

As for CA taxing unrealized gains - I don't think "unrealized" means what you think it means. If you're talking about gains that haven't been distributed to LLC members then you are thinking of a different concept. If you want the benefit of flow-through taxation, you have to pay your taxes whether or not gains are distributed. Otherwise, you should be in a C corp and deal with 2-level taxation.

BeggarEd;524220 said:

---

Don't let the sheer mass of California's size and population fool you into this perpetuated myth of prosperity. Furthermore, just because there is a lot of ingenuity (i.e. patents) coming from CA, that doesn't mean it's a "business-friendly" state.

There is a reason why so many LLCs are organized in states like Delaware, and the disproportionately high state tax rates in California have a lot to do with that.

Another dumb California law - If you have an LLC, you get taxed on [U]unrealized[/U] gains at the end of the year. So basically, a business owner can't keep $20k in reserves in their business account at the end of the year without getting taxed on it.

Also, as an LLC, you get taxed on revenue in California. $800/year just for being an LLC, an additional $900 if you bring in more than $250k in a year, and it gets worse from there. Keep in mind that this is on top of every other tax.

With regards to San Francisco, between Payroll Tax, "Business Property Tax," and every other local ordinance, it's not easy to stay afloat.

Thankfully all this money helps fund the bloated pensions of government workers, social welfare programs that require no accountability from the recipients, and sex changes for city workers. :rant

---

ColoradoBear1;524240 said:

---

Well there are two issues that you are mixing together. First is a sales tax and second are taxes on business.

CA brick and mortor businesses are absolutely going to lose sales to internet companies that don't charge tax. That would be true whether CA has the best or worst taxes on businesses. It would be true whether the CA government overspends on wasteful programs or not. Charging sales tax on out of state mail order purchases will at worst have no effect on the business practices in CA, and at best it will help smaller retail business in CA by leveling the playing field, or any retailer with a physical presences that do hire local employees.

Basically, I don't see that your rant is on topic. I'm not disagreeing, but it's not really on topic.

---

I don't disagree with you either, ColoradoBear1, but on the same token I'd be willing to make a friendly wager with you that this will most decidedly be used for the political argument that business taxes should be lowered and regulations loosened in this state.

Holmoephobic;524233 said:

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This doesn't lend a credibilty to your claims that, "California has lost it's luster" or that "it is anti-business". California has had more fortunate 500 companies sprout up in the past 10 years than any other state and it's not even close. 33 Fortune 500 companies currently reside in the Golden State -- just because you failed does not mean California is anti business.

---

Who said I failed? I just think the vision of a "business-friendly" California has been a myth for quite some time.

None other than CNBC would agree that California is NOT business friendly: http://www.cnbc.com/id/37516038/ (Ranked #49 of 50 states)

California IS great when you look at access to capital and the abundance of the innovation of technology: http://www.cnbc.com/id/37554006/. That does not mean the state is business-friendly.

ColoradoBear1;524240 said:

---

Well there are two issues that you are mixing together. First is a sales tax and second are taxes on business.

CA brick and mortor businesses are absolutely going to lose sales to internet companies that don't charge tax. That would be true whether CA has the best or worst taxes on businesses. It would be true whether the CA government overspends on wasteful programs or not. Charging sales tax on out of state mail order purchases will at worst have no effect on the business practices in CA, and at best it will help smaller retail business in CA by leveling the playing field, or any retailer with a physical presences that do hire local employees.

Basically, I don't see that your rant is on topic. I'm not disagreeing, but it's not really on topic.

---

I'm not sure that you understand the role that an affiliate marketer plays in the process of online sales. An affiliate earns commission from the retailer/distributor by doing marketing/lead generation for them. At the end of the year, an affiliate based in California still has to pay income tax to the state.

If I am an affiliate who drives a Texas consumer to make a purchase from a Washington-based retailer (Amazon), why should the consumer pay California sales tax on the transaction? California would still make money on the commissions I earn as an affiliate based on my income over the course of the year. It's in effect a double tax.

BeggarEd;524249 said:

---

Who said I failed? I just think the vision of a "business-friendly" California has been a myth for quite some time.

None other than CNBC would agree that California is NOT business friendly: http://www.cnbc.com/id/37516038/ (Ranked #49 of 50 states)

California IS great when you look at access to capital and the abundance of the innovation of technology: http://www.cnbc.com/id/37554006/. That does not mean the state is business-friendly.

---

OMG! The CNBC!? You mean the same news organization that was mocking the initial stages of the 2008 recession and telling people to buy buy buy!? How could they possibly be wrong. That chart is beyond flawed and I won't waste my time delving into all the specifics. Let's just start with the 'quality of life' metric, in which California is apparently tied for 15th with... Montana.
The chart also fails to list how it came up with any of it's rankings. I'm sure that didn't bother you in the least as you don't seem to be concerned about things like evidence or facts. Do you have any independent thoughts backed by evidence or are you consistent in letting blogs and unsubstantiated charts do the talking for you?
Here is a bit of information on CNBC http://www.theinvestigativefund.org/investigations/corporateaccountability/1197/waiting_for_cnbc%3A_a_tragicomedy_in_one_long_act
and http://stupidevilbastard.com/2009/03/the_daily_show_trashes_cnbc/

68great;524178 said:

---

What is your alternative to this tax.

If I go into a store to buy something in CA I must pay a tax.
If I order something over the phone from outside of CA, I must pay a tax.
Why should a purchase be free of taxes just because it is on the internet and not in person or by telephone.

BTW I would rather this tax be paid by those who can afford it, rather than cutting critical services or cutting benefits to those who cannot afford it.

---

As much as I enjoy not having to pay taxes, I have to admit that you are right. (BTW, if you purchase something over the phone from outside CA, you do not pay sales tax but are required to pay a use tax of the same amount.)

BeggarEd;524251 said:

---

I'm not sure that you understand the role that an affiliate marketer plays in the process of online sales. An affiliate earns commission from the retailer/distributor by doing marketing/lead generation for them. At the end of the year, an affiliate based in California still has to pay income tax to the state.

If I am an affiliate who drives a Texas consumer to make a purchase from a Washington-based retailer (Amazon), why should the consumer pay California sales tax on the transaction? California would still make money on the commissions I earn as an affiliate based on my income over the course of the year. It's in effect a double tax.

---

It's not a double tax. The brick-and-mortar store pays income tax as well as payroll tax, its employees (possibly including the proprietor if he or she earns an income) pays income tax, and sales tax is collected.

Holmoephobic;524254 said:

---

OMG! The CNBC!? You mean the same news organization that was mocking the initial stages of the 2008 recession and telling people to buy buy buy!? How could they possibly be wrong. That chart is beyond flawed and I won't waste my time delving into all the specifics. Let's just start with the 'quality of life' metric, in which California is apparently tied for 15th with... Montana.
The chart also fails to list how it came up with any of it's rankings. Do you have any independent thoughts backed by evidence or are you consistent in letting blogs and unsubstantiated charts do the talking for you?

---

You won't waste your time "delving into the specifics" because you can't provide any I'm sure... My "blogs and unsubstantiated charts" are more evidence than you have provided in any of your posts thus far.

Sorry you lost money in the market in the recession... it's not Jim Kramer's fault though.

yellerbear;524163 said:

---

Is that why California is tied with Texas with the most Fortune 500 companies and would be the 8th largest economy in the world if it were its own nation?

Or does it have more to do with the fact that about half of all venture capital in the United States is found in California and California accounted for a little over a quarter of all patents issued in the United States in 2010?

Inquiring minds want to know.

---

From a governance perspective, California IS a business unfriendly environment. And I am an entrepreneur who has started venture backed companies. This is especially true of SF. Some of the more visible startups in SF have strong-armed the SF govt to get tax breaks (e.g. Twitter and Zynga), but unless you have the political connections to pull that off you'd be foolish to start AND grow a company in SF.

BeggarEd;524259 said:

---

You won't waste your time "delving into the specifics" because you can't provide any I'm sure... My "blogs and unsubstantiated charts" are more evidence than you have provided in any of your posts thus far.

Sorry you lost money in the market in the recession... it's not Jim Kramer's fault though.

---

Wrong again. I won't waste my time delving into specifics because there's nothing to delve into. Can you tell me what information CNBC used to form that chart? That's what I thought.

As for evidence of a healthy business climate, all the evidence I need can be found in the bottom line. http://www.siliconvalleywire.com/svw/2011/05/30-bay-area-companies-crack-2011-fortune-500.html

If some of the world's most successfully business' thought California was anti-business, they would be out in a hurry. Stakeholders wouldn't tolerate anything less.

BeggarEd;524251 said:

---

I'm not sure that you understand the role that an affiliate marketer plays in the process of online sales. An affiliate earns commission from the retailer/distributor by doing marketing/lead generation for them. At the end of the year, an affiliate based in California still has to pay income tax to the state.

If I am an affiliate who drives a Texas consumer to make a purchase from a Washington-based retailer (Amazon), why should the consumer pay California sales tax on the transaction? California would still make money on the commissions I earn as an affiliate based on my income over the course of the year. It's in effect a double tax.

---

The affiliate based in CA has to pay income on what Amazon gives him (which is only 2-4% of the sale I believe). Sales tax lost is on the full purchase price which is how amazon gains a competitive advantage. An instate CA business selling a product to an instate CA customer also has to pay income tax and sales tax. You can call that a double tax if you like too. But the real question is whether it's an unfair tax (if you want to argue there should be no sales tax at all in CA that is a completely different issue, but that would at least address the fairness part).

I have not read the exact details of this law (and for that matter couldn't decphier it anyway) - it could be poorly written, poorly executed, or poorly conceived. If that's what you are arguing, throw me some details and I would probably agree with you. But as I see it, the amount of business tax derived from the amazon affiliates is miniscule compared to the sales tax lost. So it sucks for affiliates, but Amazon is the one doing bullying here.

But if you are saying that CA trying to tax out of state purchases is anti business, that is dead wrong. By the way, Texas sent Amazon a bill for $269 million in uncollected sales tax revenue last year. All states are after Amazon, but I think it will really take federal law to make it stick.