Unintended consequences

California tries to tax a specific business -- that business stops doing business in California.
Net result, zero increase in tax revenues and 10,000+ Californians lose their income.
From American Power:

Amazon Ends Affiliate Program in California
See San Francisco Business Times, "Amazon threatens to drop California associates" (via Instapundit):
Last night, California Democrats reached an agreement with Gov. Jerry Brown on a proposed state budget that, among other things, would force online retailers like Amazon.com and Overstock.com to collect sales tax in California.

Already, Amazon has made its objections clear, threatening to drop the thousands of "Amazon Associates" in California who make money by referring web users to Amazon.com to buy goods.

Pitting the wealthiest and most populous state in the union against the premier online retailing conglomerate, this is a battle of two amazons -- Goliath vs. Goliath, if you will.

But caught in between are thousands of bloggers, marketers and publishers who make money through Amazon's affiliate program, called Amazon Associates. Basically, if a blogger links to Amazon products on a post and a reader ends up buying something through that link, then the blogger gets a percentage of the sale for making the "referral." Small retailers and marketers also use the Associates program.

All these people are at risk of being cut off from this revenue source should the California budget pass on Tuesday.
And it's a done deal.
At the Sacramento Bee, "Brown signs tax bill; Amazon tells California affiliates it will drop them":
Amazon.com today said it will sever ties with some 10,000 affiliates in California to protest the Internet sales-tax law signed by Gov. Jerry Brown Wednesday.

The big online retailer has been threatening to cut those ties since February. In emails today to its California affiliates, Amazon called the bill "unconstitutional and counterproductive. " The bill is part of the budget package passed by the Legislature.

The affiliates are businesses and nonprofits that have Amazon links on their websites. When someone clicks through that link and buys something from Amazon, the affiliate gets a fee.

Under the bill, Amazon will have to collect sales tax on all sales to Californians.
Nice to see that the California legislature is as clueless as always. The natural wealth of the state has allowed those governing it to not run a tight ship and still get away with it. Their actions are hurting the businesses, forcing those that can to flee to Texas while still promising more and more to the parasite classes of in-duh-viduals and entitled businesses and unions.. Now the debit has become something that must be dealt with and what do they do? Create more idiotic job-killing taxes.

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This page contains a single entry by DaveH published on June 29, 2011 8:11 PM.

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