Amazon.com’s Injustice Toward Bloggers and the State of California
Sunday, 3 July 2011
You may have missed this little bit of news last week, but the State of California just passed a law requiring the collection of sales tax on all internet purchases, regardless of where it is shipped from. As a result, with no notice, amazon.com abruptly terminated all advertising contracts with affiliates in California, including bloggers like me. At the same time, Amazon refuses to collect these taxes that are required by law to go to the state of California.
(Listen to NPR’s Morning Edition coverage here.)
First of all, amazon.com does not have to pay any taxes, they just have to collect them from the consumer and pass the revenue on to the state. This revenue is important, because until now Amazon has been taking away revenue from local businesses by offering a 10 percent discount when you buy something online without paying sales tax. Even though I have had Amazon ads on my site in the past, I support this law because I support local business. Amazon.com has become the Walmart superstore of online retailers, and this law is not going to affect them much because they are still able to offer the lowest prices and they have a huge industry that no one can compete with. But the law does help local businesses by not giving online retailers an advantage. In addition, the state of California, like other states, is broke! The states lose money to online retailers as well – we need that revenue to pay our teachers, firefighters & policemen, repair roads, feed the poor, send our kids to college, etc.
Secondly, what does this law have to do with bloggers? Well, the law states that any business presence in the state is what requires them to collect sales tax. Apparently, if there are affiliate bloggers who live in California with amazon.com ads on their websites, that counts as a business presence. I know that seems a bit murky (we are not the ones selling products, we simply refer traffic to amazon.com), but in effect, by terminating our contracts, Amazon is losing business that would otherwise be referred to them. So why do this? It seems we are simply pawns in a bargaining game, an attempt to create pressure from affiliates to change the law (or deter similar laws in other states). But I am not upset about the law, because I understand the necessity. I am upset with Amazon, because they are the ones who decided to terminate our contracts.
Finally, Amazon is not currently collecting any sales tax. I am not clear on all the legal requirements and whether they could be considered exempt without the affiliates, but it appears that they are waiting for a court challenge so they can try to overturn the law. Shame on Amazon for holding the affiliates hostage and for avoiding, if not disobeying, the rule of law.
Let’s boycott amazon.com!!! Shop in your neighborhood and support your local economy!!!