While many companies are preparing for the California Consumer Privacy Act (CCPA) to go into effect on January 1, there is another California law effective January 1 that is already causing companies to take action.
Amazon has been doing battle with states over the collection of sales tax for years.
It has developed a strategy for dealing with states that propose legislation that would force it to collect sales tax as a result of its affiliate relationships: threaten to terminate affiliates in the state if the legislation is passed.
Sure enough, the e-commerce giant has consistently followed through on such threats. The result: Amazon affiliates either have to say goodbye to revenue, or flee to another state. And the states themselves don’t generate any of the revenue they thought they were losing out on in the first place.
Yesterday, California became the latest state to pass an affiliate tax law.
With a single stroke of a pen, California’s governor signed AB 28 1x and may have struck the biggest blow ever to the affiliate business model in the United States.
That’s because California isn’t just home to a large number of
affiliates, it is also widely considered to be the center of the
technology universe.
If you’re an affiliate in the United States, there’s a good chance you’re not sleeping very well these days.
States continue to wage war against major online retailers, leaving some affiliates cut off from the affiliate programs that they depend on for income. And new battles look set to break out in some of the largest, most important states.