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Thursday, June 30, 2011

California Killed My Business - And Said Buh Bye To High Tech

The California budget included the so-called Amazon tax in it - which besides being unconstitutional, just made a California business address a liability. This means, businesses from outside of California will not work with affiliates who live in California and 3 or 4 other states.

Oregon, which has no sales tax, will come out of this as the big winner, as will every other country in the world, because an affiliate living anywhere else can put up the same ad as an affiliate in California. It will be on a different website, of course, but after the dust settles, nobody but the thousands of destitute California affiliates will know the difference.

Apparently, the little thieves in Sacramento tried to be clever by including the affiliate networks themselves in the definition of those who give a company nexus. There are two big players in California, Google Affiliate Network, and Valueclick's Commission Junction. While it may not happen overnight, once they start to feel the pinch of their California address, they will begin to exit the state as well. If they do not, they will most likely watch their customers jump ship as advertisers sign up with networks who are not burdened by their location California.

The winners in this? None. Walmart and Home Depot and other brick and mortar stores think they will see big gains, but they won't, because Amazon and Overstock got rid of their nexus. Nothing changed for them. The state might see a little bit of revenue at first, but my guess is that it will not be as much as what they will lose in income and sales tax - since they made thousands of affiliates paupers overnight, those affiliates won't be buying much, and don't have any taxable income anymore.

June 30th, 2011 will mark the day that California killed its technology industry. This state is in the business of subsidizing the corrupt Mexican government, and it is pretty clear that we will be the leader in that for decades to come.


PS - California's anchor baby program was left fully intact. They cut services to the elderly and disabled, but "did not make cuts to children's programs" meaning each baby an illegal alien female pops out on California soil, the rest of you Californian's will be supporting, for the next 18+ years.


"We've done further analysis of ABx1_28, the so-called "Amazon tax," passed by the Democrat legislators and signed by Democrat Governor Jerry Brown. And we must correct our initial view that it will subject all online purchases to sales tax. Actually, hardly any new online sales tax will come from the new online sales tax law. Why? Because it only applies to online sellers that have workers, affiliates, offices, or property in California.
And already, online companies are taking steps to avoid the new tax, which enables their customers avoid the new tax. And in the 48 hours after the "Amazon tax" was signed,,, and other out-of-state online sellers have sent notices to more than 25,000 California small businesses notifying them that they can no longer be affiliates. 
Therefore, when Californians purchase from an out-of-state online seller, you are not likely to be charged sales tax because those sellers have severed ties with their California affiliates, and thus no longer have a "physical presence" in the state. They will have successfully skirted the new law and consumers will be "safe."
So what's the effect of the new online sales tax law? More than 25,000 small businesses in California will be harmed or eliminated, the economy will be further harmed, and the state government will end up losing revenue, not gaining it. This is the stupidity of Jerry Brown and the Democrat legislators. But consumers won't likely pay any more tax online than they've already been paying."

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