Thread: Amazon and Overstock.com Cut Off California Affiliates

California passed a law last week that orders online retailers to collect sales tax on purchases in California if that retailer has any presence in California. Therefore, Amazon and Overstock.com cut off approximately 25,000 affiliates immediately (and as they said they would if the law passed).

Has anyone here been affected by this?

I got into affiliate marketing a few months ago (I live in California) with knowledge that this law was coming but hoping it wouldn't pass. I forgot about it until I went to sign up with Amazon's affiliate program today! Oh well.

I bet a lot of other affiliate programs will be flooded with applications from those trying to make up for lost income.

Poor NewEgg and other California based online retailers. Their choice would be to collect the tax or move a huge operation out of the state. It will make it hard for them to compete in this very competitive market.

California joins with New York and, I think, North Carolina in this.

Colorado, Illinois, Rhode Island, and Connecticut have passed these laws too.

Fortunately, a fair amount of affiliate firms are based in California (like CJ), so there will still be options for us. Just not as broad and deep as Amazon.

CA affiliates will need to register a business in one of other states to keep their Amazon accounts, I guess. I saw in some other forums people start planing to relocate since their Amazon income is too much to give up.

Some of the larger people will have the money and wherewithal to shift their business nexus to another state while still remaining in CA (doable but not easy at all). The little guys have to move or give up the income.

Once again the little guys suffer in a fight between big businesses (Wal-Mart, Target v. Amazon) with a mildly retarded government as the judge. It's an unfortunate but common theme in American history.

I'm still interested to see what effect this will have on affiliate firms based in CA like Commission Junction. If anybody comes across news on it, please post here.

CJ is based in CA so I don't see why they should have problem with it. Amazon is based at Seattle so they don't have any advantage paying taxes or collecting it on behalf CA.

with a mildly retarded government as the judge

Mildly, you say??

CJ is only a clearing house. They do not make sales directly or collect taxes.

It is up to the online merchant to decide if they will accept affiliates from the affected states and implement the tax collection and payment procedures. The freedom from the taxation has been a boon for many online businesses. Collecting the taxes reduces their competitive advantage.

Small affiliates are the ones who loose their revenues because of these tug wars.

I'm in Connecticut and we just got cut off too!

I found this thread! I think I should update you that Amazon Associates has opened up their affiliate program again to California resident. Now they’re able to market Amazon products and earn commissions. Congratulations to affiliate marketer from California!

Thanks for updating the thread Akira. I didn't know that. This is really a good new for Californians who are into IM.

Yeah, this will be a breeze for them because Amazon is the most high converting affiliate company compared to the others. However, this will also be an alarm for me because I know that competition in 2012 will be tougher...