If you live in California, you probably already know that Amazon is terminating the Amazon Associates Program for all residents of California.
I discovered this potential bad news yesterday when Amazon emailed me this following email:
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
This was followed up by the following email:
Hello,
Unfortunately, Governor Brown has signed into law the bill that we emailed you about earlier today. As a result of this, contracts with all California residents participating in the Amazon Associates Program are terminated effective today, June 29, 2011. Those 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 before today 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 your 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. As mentioned before, we are continuing to work 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
This is an interesting series of events.
I can certainly understand why many states would want to impose sales tax on sales of items by online companies that sell to its residents. It’s been long settled that companies that have an in-state presence would have to charge sales tax. Amazon has been able to avoid that by never establishing a state presence in California.
This has allowed many residents of California to be able to make online purchases from Amazon without having to pay sales tax to Amazon. (Though they are still required to report those purchases and pay those taxes at the end of the year)
The main affect of this new law is that it makes Amazon responsible for collecting and paying the taxes for us, since often times these taxes go unreported. Obviously, this ends up costing Amazon money.
I find their solution in the email a bit unsettling and heavy handed.
Amazon tries to make it sound as if they are taking a moral and ethical stance in their email.
Notice that the stance they’ve taken is to cancel their affiliate program for California residents. However, they make a point of saying that they will still sell their products here in California.
This tells me one thing.
This has nothing to do with the morals or ethics of the law. It has everything to do with money. If I am in their affiliate program, it just makes it more expensive for them to track my sales and deduct the sales tax from my payouts. So rather than take that extra step, they’ve decided to terminate the program for California residents altogether.
I think this is a rather weak and frankly disappointing response from Amazon regarding this law.
What do you think?
You may also like -
Richard is a full time professional, husband, father and blogger juggling all the responsibilities of life and running a blog. Richard enjoys writing about life and online money matters.
10 Unusual Places to Find Finance for Your Start Up
nRelate Review: A Better Related Post Plugin
How to Get the Best Out of Your Personal Loan
5 Ways to Invest Your Money Besides a Savings Account
Start Your Business Website Free
Richard,
My brother lives in Ca. and got the same thing. really the writing has been on the wall for a while. I think it has been almost a year since Amazon drew the line in the sand when this first happened in Colorado.
It is certainly 100% about money. It is mostly the big-box stores (wal-mart etc.) who are trying to push this. Of course the governments think they will make more money, and Amazon wants to fight it to keep their costs low (and market share high)
Personally I think the State Governments and box stores are in the wrong, although regardless of who is "wrong" it is an absolute fact that the people who suffer are the "little people".
It is quite unfortunate that it is always the "little people" who get crushed in these circumstances.
- spam
- offensive
- disagree
- off topic
Like