For several years now, the military museum in Old Sacramento has quietly earned a nice little income by acting as a sales rep for Amazon.com.
But this small nonprofit, along with thousands of other California organizations and businesses, has been caught in an epic standoff between Amazon and state officials...
While legal experts expect Amazon to sue the state, the online giant already is taking action of a different sort. Hoping to exempt itself from the law, Amazon has fired its 10,000 California affiliates, cutting off their commissions. Scores of other e-commerce companies affected by the law, including Overstock.com and a slew of smaller firms, have done the same...
But they (decisions to cut off affiliates) will affect organizations like the California State Military Museum, which earned about $2,000 a year as an Amazon affiliate.
Good job, state legislature. Idiots.
Update: Instapundit reports the following:
Meanwhile, reader Spencer Martin — a professor of Finance — emails:There would be no constitutional problem if Congress regulated this, as it absolutely, positively interstate commerce. Congress hasn't yet decided to do so, but that doesn't mean the states can step in. Besides, when the states do unconstitutionally step in, look at the mess they make of things!
Perhaps someone could clear up *why* States think enacting these internet tax collection mandates will raise any revenue. The biggest target, Amazon, merely sidesteps these laws by shutting down its Associates program and thereby escaping jurisdiction. That leaves only the potential net revenue *loss* from taxable income that the Associates were receiving. Are State budget authorities dumb enough (as CBO is) to score these bills as revenue-enhancing?
I guess so.