CALIFORNIA SALES TAX Deal Paves Way for AMAZON Affiliate Reinstatement
By Kenneth Corbin
September 12, 2011
The California legislature late Friday passed a bill that would give Amazon and other online retailers a moratorium on collecting sales taxes through next September, a compromise measure that, if signed into law, will see the ecommerce giant reinstate its advertising affiliates.
In June, Amazon had terminated its affiliate network in California following the passage of a law requiring online retailers to collect sales taxes if they engage website owners to advertise for them in exchange for a cut of the revenue from referrals, even if they don’t have any brick-and-mortar operations in the state.
Now, the company is poised to bring its affiliates back into the fold.
“This bipartisan, win-win legislation will allow Amazon to bring thousands of jobs and hundreds of millions of investment dollars to California, and welcome back to work tens of thousands of California-based advertising affiliates,” Paul Misener, Amazon’s vice president of global public policy, said in an emailed statement.
Word of the agreement broke late last week, which marked a reversal of course for California Democrats, who had only recently announced that there would be no deal.
The agreement followed tense negotiations between lawmakers and Amazon, which had poured millions of dollars into a ballot initiative to overturn the law.
By deferring the sales-tax collection requirement until next September, California will forgo an estimated $200 million in revenue. The bill now awaits the signature of Gov. Jerry Brown, who reportedly has not indicated whether he plans to sign it into law.