Thursday, June 30, 2011

California Shoots Itself In The Foot With New Budget--Passed Without A Single Republican Vote

They'll have a hard time pinning this one on the Republicans, but it won't be for lack of trying:
Gov. Jerry Brown has signed into law California's tax on Internet sales through affiliate advertising which will immediately cut small-business website revenue 20% to 30%, experts say.

The bill, AB 28X, takes effect immediately. The state Board of Equalization says the tax will raise $200 million a year, but critics claim it will raise nothing because online retailers will end their affiliate programs rather than collect the tax.
Amazon has already emailed its termination of its affiliate advertising program with 25,000 websites...

Almost all the California Amazon affiliates have fewer than 75 employees and a large percentage have no employees, according to Rebecca Madigan, executive director of the Performance Marketing Association, a Camarillo-based nationwide trade association.

"This law won't impact Amazon that much but it is a crisis for website owners who make revenue by placing ads on their websites for thousands of online retailers," Madigan said. "Most of them don't have a physical presence in California."...

The U.S. Supreme Court in 1992 ruled that states cannot tax businesses that aren't physically within their boundaries. Such taxes would regulate interstate commerce, which is a federal government prerogative...

Board of Equalization Member George Runner blasted Brown for signing the law. "Even as Governor Jerry Brown lifted his pen to sign this legislation, thousands of affiliates across California were losing their jobs. The so-called 'Amazon tax' is truly a lose-lose proposition for California. Not only won’t we see the promised revenues, we’ll actually lose income tax revenue as affiliates move to other states."

Other states have passed so-called Amazon Taxes and seen Amazon cut affiliates in those states from the team; why would California's government think it would be any different here? Or do they not care about the jobs, and just hope that Amazon comes out looking like the bad guy here? I understand liberals believe in "hope" a lot.

1 comment:

Unknown said...
If you want a say in the budget, state or federal, you might want to be able to give something up on your side of the agenda.