Your days of making a quick buck off of a major bookseller and fleecing the general public are over, at least if you live in California. That’s because governor Jerry Brown signed a new law last week that required online retailers like Amazon.com to start collecting California state sales tax. Amazon hadn’t collected taxes before because it has no stores in the state. With the new law, any California resident with a web site that redirects readers to Amazon.com as part of its Affiliates program would count as a store. I’m a store!
Supporters of the law called it a win for California; that’s what supporters do. Here is what was supposed to happen.
- Companies like Amazon.com would collect taxes and submit them to the state
- Sacramento would enjoy a new stream of tax revenues
- In-state companies that compete with Amazon would now have a level playing field, with both sides saddled by the same tax rules
- Employment in California would rise thanks to more purchases at local retailers
- Puppies and other small pets would have more playtime thanks to their owners spending less time online
Here is what actually happened.
- Amazon.com terminated its Affiliate contracts with all California participants
- Sacramento received no new revenues from retailers who followed Amazon’s lead
- Tax-collecting local companies continued to compete against tax-not-collecting online retailers
- Unemployment in California stayed woefully high
- Puppies and other small pets didn’t notice any change because they lack the higher cognitive functions of their human owners
So in effect, nothing changed. Well, one thing did change; I’m no longer a store. All of those California-based Amazon Affiliates that had a business relationship with the online behemoth lost a source of income. My direct sales were low enough to make it a moot point. But one non-profit organization that I support was bringing in $600 per year from Amazon.com, funds it used to purchase books for low-income children in the state. That part of the program has come to an end. Where is the win for California again?