Archive for April, 2012

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Looking at Impact of California and Amazon.com


2012
04.15

In a fight that reached a national level of notoriety, the battle between Amazon.com and the State of California was eventually lost for Amazon when the state government pushed through a bill that would force online retailers to alter their methods of collecting taxes on online purchases. For a rather significant amount of time online retailers have been held to a different set of rules than those of brick-and-mortar companies but there have been several attempts in various state congresses to get rules changed so that states could collect more taxes from online purchases.

Many states around the country are experiencing difficult decisions in budgetary cuts and increased taxes is one of the ways some states – including California – have been deciding to deal with those financial difficulties. The case of Amazon.com is related to that company’s large number of affiliate marketers who sell Amazon products through their own websites but whose sales align with what Amazon.com has traditionally used which is that a purchase is only required taxable if it’s sold to a location in the same state from which it was sent.

With the change in the California legislature all affiliates in the state have been told they need to collect taxes on purchases whether they’re in state or not and Amazon has responded by banning affiliate sellers located in California. This new law has likely gotten other states to thinking about changing affiliate laws, but it’s not time for affiliate marketers and their SEO Firms to pack up their bags and shutter the doors of those online businesses quite yet. Amazon is launching a referendum to get the law repealed.

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