Well, I got up this morning, and, as I do every day, clicked on my Amazon Associates account link to see how things were going. In large red letters across the top of the page, I was informed that my account had been closed.
I knew it was coming. I knew the greedhead leftists and wreckers who are destroying California were going to steal my money. It’s just sad to see that it has actually happened, after I spent a great deal of time and effort at building up my Amazon sales to the point that they put a significant sum of money into my (retired person’s) pockets.
And, of course, the most infuriating thing about all this is the futility of it in terms of the stated reasons for it. Oh, and the morons who think that Amazon is somehow supposed to do what no other out-of-state corporation has to do – collect the state’s sales taxes for it. In fact, Amazon is constitutionally protected (a notion reinforced by a modern Supreme Court decision) from being forced to do so.
What this all hinges on in the idea that only if a company has a “nexus” in a state can it be forced to collect state sales taxes on sales made to customers within that state. California has advanced the claim that the mere existence of people operating web sites that have links to Amazon products, on which they receive commission for sales, is somehow a “physical nexus.”
Examine the logic. Let’s say mail order company “A”, located out of state, runs targeted magazine ads in California with enclosed coupons. And let’s say that those California magazines have a deal on these ads, in which the company will pay them an extra ad commission for each coupon redeemed from their ad. Can these companies be forced to collect California sales tax on these purchase?
No. And nobody, not even the leftist greedhead wreckers running the California state government, is trying to claim otherwise. The law is quite clear on the matter as well.
Still, California passed this law, claiming that the Associates program gave Amazon a “physical nexus” in the state, so Amazon did exactly what it said it would do in any state that tried to run this extortion on them, and shut down their Associates program in California. Amazon will also ignore any demands based on the Associates Program/nexus idea, and will continue not to collect any Californa sales tax. Net benefit to California greedheads? Zero. Even worse, the ten thousand or so Associates in California who paid California income tax on their earnings from Amazon will no longer be doing so. Nor will they be spending their money in California to help build the economy. Net benefit to California leftist greedhead wreckers? A big minus of tens of millions of dollars.
And the truth is, California legislators knew this would happen going in. They knew Amazon would kill the Associates program in the state, collect no income tax, and that the state would also be deprived of the income, and income tax, generated by the program. So why did they push this law through?
Did I mention that these people are leftists, greedheads, and wreckers? Let me add that they are also corrupt bribe-takers on a massive scale. They pushed this law through, and are more than happy to see the Amazon Associates program permanently shut down, because that is the goal the real backers of this law were after in the first place. It has nothing to do with sales tax collections. It is, in its entirety, designed to use the government as a club to shut down Amazon’s Associate Program in the biggest states in the country.
Big companies like Wal-Mart, (an out of state corporations itself) who have associate programs that are much less effective at driving sales than the Amazon Associate program is, can’t handle that competition head on by beefing up their own programs. Or at least they don’t want to. So what these sponsors were really after was not to collect additional sales tax for California, but to shut down the competition in the state. They got what they wanted. The politicians behind this bill will get what they want – more money and support (bribes) from companies like Wal-Mart. And the state will get nothing, in fact, will lose money.
But of course the big drive now is to somehow make Amazon the villain in all this. And too many people are buying the propaganda. Sad.
And I’m out big bucks (for me) so that Wal-Mart no longer has to compete with Amazon’s Associate program in my state. That makes me sad, too. And angry.
I’d like to thank all of those who clicked my Amazon links and helped to support me and my websites through no cost to yourselves, and bought things that you wanted on needed at good prices in the process. I am very grateful to all of you. Unfortunately, thanks to the leftists, greedheads, and wreckers of the California government, we will no longer be able to participate in this mutually beneficial exchange. I’ll be taking down those links today sometime. I hope you will wish me well. My state government certainly doesn’t.
These California web-based companies earn income from ads placed on their websites. In 2010 they paid $151 million in state income taxes. The result of ABX1 28 will mean these small businesses will go out of business or move out-of-state to preserve their incomes. As a result, California’s current deficit and economic outlook will get worse.
“I hope the education community in California is ready for those trigger cuts, because in January not only will income tax revenue from these small businesses be lower, the illusory ‘sales tax’ will not have been collected, putting California in a more precarious economic situation,” Madigan concluded.
That’s right. California just dumped $151 million bucks down the tubes, in order to collect…um…zero sales taxes. What a great move!
UPDATE: Welcome, Instapundit readers!