Governor Schwarzenegger Remains Committed to No New Taxes, Announces Overstock.com Will Continue to do Business in California
Following Overstock.com’s announcement that it will pull its affiliate advertising from California due to the legislature’s proposal to increase taxes and the announcements of other companies such as Amazon.com threatening to follow suit, Governor Schwarzenegger today reiterated his deep commitment to not raising taxes to solve our state’s budget deficit and announced Overstock.com will reinstate California-based internet affiliate advertisers:
“After passing the largest tax increase in California history, it makes absolutely no sense to go back to the taxpayers to solve the current shortfall - that’s why yesterday I vetoed the majority vote tax increase passed by the legislature. With unemployment at an all time high, we should be doing everything we can to - keep jobs and create jobs - in California. That is why my Administration immediately contacted Overstock.com when we learned of this news and, I am pleased to announce Overstock.com has reversed its decision and will continue to do business with affiliates here in California. I will continue to fight to keep jobs and businesses in California.”
California lawmakers proposed a tax on affiliate advertising and sent legislation to the Governor, but as promised he vetoed it because we cannot solve our budget deficit by raising taxes and driving businesses out of the state.
Overstock.com estimates its internet affiliate advertisers in California create millions of dollars in revenue.
| Another large merchant was forced to terminate affiliates, this time in California. From Overstock (this is an excerpt of their email to affiliates in California):
Dear Affiliate:
We regret to inform you that the North Carolina, Rhode Island, California and Hawaii state legislatures have or are about to pass unconstitutional tax nexus and collection laws in an attempt to force Internet retailers to collect and remit sales tax on all sales to residents of these states.
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These legislative measures purport to establish a state tax nexus on the basis of contracts with local advertising affiliates, even when none exists under U.S. Supreme Court precedent.
Due to the passage or eminent passage of these unconstitutional laws, Overstock regretfully must discontinue its relationships with all of its advertising affiliates in these states.
This is only the beginning, I fear. What can you do? Read up on the latest news and action items here on our blog.
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advertising tax, affiliate tax, california, internet tax, supreme court
| Just when you thought California was getting there act together…
Earlier this spring, California seemingly decided to at least delay enacting their version of an advertising tax. The hearing on AB 178 never happened and was not scheduled to be heard again until January 2010. It seemed like victory for affiliate marketers, at least a temporary one. Numerous affiliates and merchants rallied to the cause and established a grassroots campaign to fight AB 178. No doubt, the fight was not over by any means, but things were looking somewhat good. |
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Now, it seems California is back on track to join New York as a state that…well hates affiliates. All 25,000+ of them!
Amazon and other programs have already sent emails out stating that if the bill passes, they will terminate all California affiliates (they recently did the same for North Carolina affiliates as well).
This is not just a California issue. This is an affiliate issue. No matter what state you are in, this is a YOU issue. This is your livelihood at state. History shows us that when a handful of states enact legislation such as this, that most of the other states will follow. If you don’t think your state is at risk, you are probably mistaken. Even Tennessee, which is one of the last states I would have thought would even try to do this, recently attempted to pass an advertising tax into law. Thankfully it has failed so far.
So what action can you take? Here are some steps that you can take…but you must take them now!
1. Educate Yourself - Read the fact sheet here and read the actual bill here
2. Visit the ABestWeb California Tax Forum to follow the conversation and connect with other affiliates on the issue.
3. Contact Your State Representatives - In California or elsewhere. Here is a list of the CA Reps to contact.
4. Talk about it with your friends
5. Twitter about it, blog about it, use other social networks to spread the word
6. If you have friends or family in the media, contact them about it and see if they can help
7. Join AffiliateVoice
Whatever you do, remember that you are representing not only yourself, but other affiliates. Keep it civil and businesslike, but be passionate about it.
Lastly, feel free to ask me or anyone else about it. We are indeed all in this together.
advertising tax, affiliate tax, california, internet tax, nexus
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