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Friday, February 04, 2011

How Nancy Skinner and Charles Calderon Of The California State Legislature Killed My Home Business

February 4, 2011

Dear California Affiliate:

values your advertising efforts, and hopes to continue our business relationship for years to come.
However, we are writing to inform you the California state legislature has once again introduced bills which put our continued relationship in jeopardy.

There are two bills that deserve your attention. The first is AB 153 and the second is AB 155. If either AB 153 or AB 155 passes in any form, will have to sever its relationships with all California Affiliates before either bill becomes law. Both bills are currently in committee, and may pass any day.

AB 153 targets the affiliate relationship directly. This bill is similar to "affiliate nexus" bills we have seen in a few other states, modeled on the law first passed in New York. If AB 153 becomes law in California, it will mean that if we use your affiliate advertising services we would be required to collect sales taxes on all our California customer sales.

AB 155 contains traditional affiliate nexus language, similar to AB 153, but also has a tattle-tale reporting requirement similar to a law passed in Colorado last year (which was recently enjoined due to constitutional concerns).

We believe both bills are harmful to business, unconstitutional, and contrary to decisions by the U.S. Supreme Court. Where similar bills have passed in other states we have summarily terminated our affiliate relationships in those states rather than submit to the unconstitutional burdens these laws impose.

However, you can prevent this from happening in California. In many other states, the voices of local affiliate
advertisers were heard. They pointed out to their legislators and governors that such legislation was
unconstitutional, would be bad for local business and would not increase state revenues. Those bills were either not passed or vetoed by informed governors.

You may want to make your voice heard on the matter. AB 153 was introduced by Assembly Member Nancy Skinner who may be contacted by telephone (916) 319-2014. AB 155 was introduced by Assembly Member Charles Calderon who may be contacted by telephone (916) 319-2058. However, it is more important that you contact your state representatives, and any others you personally know, and tell them they should not support these unwise bills. We encourage you to do this without delay.

Again, values your advertising efforts and is hopeful that, like other states recently examining and rejecting this legislation, including California in previous years, will once-again see that these bills are bad for business and bad for California.


Jonathan E. Johnson III
President, Inc.


Thank you for your participation in the Boden USA Affiliate Program!

We've been watching the Internet Tax laws closely, as we do not have brick and mortar stores in the United States.

Your state has come up as one that is looking to introduce legislation.  If these laws pass, we may not be able to continue our relationship in the affiliate program, due to the fact that we cannot charge state tax on our website.  We wanted to give you notice as soon as possible about this, even if the legislation may not be passed for months.  If you plan on moving your business to another state or you have a way to exclude consumers from specific states, we may be able to work something out.

If the legislation does not pass, it will be business as usual.


And then there's The Home Depot's take:

Dear Affiliates,

The Home Depot is proud to do business with you and values our relationship.  It is in this spirit that I am reaching out to you as our collective online success is intertwined with the health of both of our organizations.

There has been a great deal of media coverage recently regarding the sales tax collection issue (e-fairness) and its impact on the overall affiliate marketing industry.  We understand that has said it will terminate its affiliate program in California if e-fairness legislation passes that requires them to collect sales tax due on purchases by California residents.

We want to make you aware that The Home Depot strongly supports the retail fairness legislation. As we all know, the decades old loophole is using to avoid sales tax collection was intended for catalogs, pre-dates e-commerce and was decided before the technologies we use today to simplify tax compliance were available.

It’s our view that success online and tax compliance are not mutually exclusive.  Even during this recession, last year The Home Depot collected and remitted nearly $750 million in California sales taxes, while employing over 39,000 Californians and enjoying and expanding relationships with California affiliates like you.  It’s because we are committed to the very communities where we live, work and play that we strongly support a change in the law that will strengthen the local business community and support job growth. 

Thank you for your partnership and support in 2010. We are committed to our collective success and look forward to continued sales growth for both of our organizations. 

Hal Lawton


Gosh, I almost fell for it. Of course the Home Depot collects and pays California sales tax....they have a gazillion stores in California. Duh. And frankly, what is the difference between buying something out of a catalog, the paper version, and a catalog, the online version?

If I weren't so hopping mad at our government and their lying, cheating, swindling ways, I would really appreciate The Home Depot taking this approach. But right now I wish The Home Depot would inflict as much pain on the greedy, two-faced, good for nothing layabouts in Sacramento as they possibly could. Heads on a stick, I say! (Actually, John and Ken say it everyday, I am just parroting - squawk.)

Sign me one pissed off Retro Housewife.

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