Amazon Cuts California Affiliates Loose Over New Tax Law

Amazon has notified all California residents who participate in its affiliates program that a new tax law means they will no longer receive fees for referring site traffic that resulted in a sale.

The bill requires that online retailers charge sales taxes on purchases even where their “presence” is not physical but through affiliates. Amazon had warned participants yesterday that it would have to turn off the program later this year if the bill was signed, and Gov. Jerry Brown made it official later in the day.

There’s some question as to whether the law will be challenged in court on the grounds that it violates federal law, because it is broader than similar laws that have led to Amazon cutting affiliate programs in Connecticut, Arkansas and other states. In states where it has a physical presence, such as its Washington home base, Amazon does charge sales taxes.

In a statement, Paul Misener, Amazon VP of Global Public Policy, said, “This legislation is counterproductive and will not cause our retail business to collect sales tax for the state.”

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work