Amazon.com to terminate affiliate contracts in retaliation for California tax law [Update]

29 Jun
June 29, 2011

Currently a law California is in the process of being passed that would force online retailers to start charging sales tax to California residents, in retaliation to this, major online retailer, Amazon, has threatened to terminate all affiliate accounts that belong to anyone who resides in California. Amazon has already punished, other states, Illinois, Hawaii, Connecticut and North Carolina for passing a similar law. Amazon says it should not have to collect sales tax in states where it has no physical presence.

Amazon already started notifying its affiliates, myself included, of the potential termination via email as you can see below.

For well over a decade, the Amazon Associates Program has worked with thousands of California residents. Unfortunately, a potential new law that may be signed by Governor Brown compels us to terminate this program for California-based participants. It specifically imposes the collection of taxes from consumers on sales by online retailers – including but not limited to those referred by California-based marketing affiliates like you – even if those retailers have no physical presence in the state.

We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.

As a result, we will terminate contracts with all California residents that are participants in the Amazon Associates Program as of the date (if any) that the California law becomes effective. We will send a follow-up notice to you confirming the termination date if the California law is enacted. In the event that the California law does not become effective before September 30, 2011, we withdraw this notice. As of the termination date, California residents will no longer receive advertising fees for sales referred to Amazon.com, Endless.com,MYHABIT.COM or SmallParts.com. Please be assured that all qualifying advertising fees earned on or before the termination date will be processed and paid in full in accordance with the regular payment schedule.

You are receiving this email because our records indicate that you are a resident of California. If you are not currently a resident of California, or if you are relocating to another state in the near future, you can manage the details of your Associates account here. And if you relocate to another state in the near future please contact us for reinstatement into the Amazon Associates Program.

To avoid confusion, we would like to clarify that this development will only impact our ability to offer the Associates Program to California residents and will not affect their ability to purchase from Amazon.com, Endless.com,MYHABIT.COM or SmallParts.com.

We have enjoyed working with you and other California-based participants in the Amazon Associates Program and, if this situation is rectified, would very much welcome the opportunity to re-open our Associates Program to California residents. We are also working on alternative ways to help California residents monetize their websites and we will be sure to contact you when these become available.

Regards,

The Amazon Associates Team

I don’t make much from my Amazon affiliate account, some months I barely make even $20, but I still enjoy trying. Even though I don’t make much, I’m sure a lot of people in California rely on Amazon Affiliate earnings and this is going to be a major blow to them. I’m really hoping this doesn’t happen, as I’ve enjoyed working with Amazon for the past 2 years as an affiliate, and an extremely loyal customer. I don’t mind having to pay sales tax, but taking away the affiliate account is definitely a bummer.

[update]

So that settles it, Jerry Brown signed the bill, and Amazon terminated our affiliate accounts as promised. The email below was sent out to California affiliates moments ago.

Unfortunately, Governor Brown has signed into law the bill that we emailed you about earlier today. As a result of this, contracts with all California residents participating in the Amazon Associates Program are terminated effective today, June 29, 2011. Those California residents will no longer receive advertising fees for sales referred to Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com. Please be assured that all qualifying advertising fees earned before today will be processed and paid in full in accordance with the regular payment schedule.

You are receiving this email because our records indicate that you are a resident of California. If you are not currently a resident of California, or if you are relocating to another state in the near future, you can manage the details of your Associates account here. And if you relocate to another state in the near future please contact us for reinstatement into the Amazon Associates Program.

To avoid confusion, we would like to clarify that this development will only impact our ability to offer the Associates Program to California residents and will not affect your ability to purchase from Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com.

We have enjoyed working with you and other California-based participants in the Amazon Associates Program and, if this situation is rectified, would very much welcome the opportunity to re-open our Associates Program to California residents. As mentioned before, we are continuing to work on alternative ways to help California residents monetize their websites and we will be sure to contact you when these become available.

Regards,

The Amazon Associates Team

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1 reply
  1. Arthur Michelson says:

    There should be a public response to Amazon’s heavy handed actions and their attempt to cow California and other states from requiring them to collect sales tax. Doing so just evens the field with California businesses. I don’t really like paying taxes, but I do want good roads, good schools, effective police and fire departments, etc. Time to boycott Amazon.

    Reply

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