California to Out-of-State Online Retailers: Collect State Sales Tax

June 30, 2011 -

California has told out-of-state online retailers to start collecting sales tax for customers residing in the state Beginning July 1. This includes Amazon.com, Overstock.com, and GameStop.com. Beginning Friday this new requirement for retailers takes effect, along with a 1-percentage-point drop in the tax. The new tax collection scheme is projected to raise $317 million a year in new state and local government revenue.

Besides the slight cost to California customers, there are other adverse effects for companies connected with Amazon and similar retailers. Amazon and online retailer Overstock.com have reportedly told thousands of California Internet marketing affiliates that they will stop paying commissions for referrals of click-through customers. This is due to the fact that the new requirement applies only to online sellers based out of state that have a connection to California, such as workers, warehouses or offices.

The LA Times reports that "both Amazon in Seattle and Overstock in Salt Lake City have told affiliates that they would have to move to another state if they wanted to continue earning commissions for referring customers."

California's law was drafted to circumvent a 1992 U.S. Supreme Court ruling that retailers can't be forced to collect sales taxes unless they have a physical presence in the state. The new law establishes that presence by redefining it in two ways: when a seller pays commissions to affiliate sites in California, that refer buyers; and when sellers have a related company operating in the state.

Many of those affiliate companies said that they plan to move or are considering a move.

Meanwhile, Governor Jerry Brown is praising the new law, calling it a "common-sense idea." He signed the bill into law on Wednesday.

Amazon sees it differently:

"We oppose this bill because it is unconstitutional and counterproductive," Amazon wrote to its California business partners Wednesday. Amazon has said what further actions it might take to challenge the California law.

Source: LA Times

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Comments

Re: California to Out-of-State Online Retailers: Collect ...

Submitted by udx on Sat, 07/02/2011 - 10:03.

Apparently, Barnes and Noble welcome the new law

http://blogs.publishersweekly.com/blogs/PWxyz/?p=5643

“We thank Governor Jerry Brown for demonstrating his commitment to California businesses by signing e-fairness into law. This legislation will directly benefit California businesses by creating a fair marketplace,” said William Lynch, Chief Executive Officer, Barnes & Noble. “We believe that e-fairness will improve the economy, add jobs, and help struggling businesses everywhere in California. By signing this law, the Governor has made clear that his priorities are to help bolster economic recovery. This is a huge win for business in the state of California.”

What is a game?(throws wine glass on the floor and it breaks to pieces) A miserable little pile of secrets.

Re: California to Out-of-State Online Retailers: Collect ...

Submitted by ecco6t9 on Fri, 07/01/2011 - 16:03.

I was watching TV the other night, North Dakota came up about it's amazing job growth through some backwards extremeist idea that "Bussiness Friendly Laws" are good for jobs.

I guess Califorina is far too progressive for such bacwards thinking.

Re: California to Out-of-State Online Retailers: Collect ...

Submitted by sqlrob on Fri, 07/01/2011 - 15:08.

Gamestop isn't already collecting tax? They certainly have a nexus in CA.

Re: California to Out-of-State Online Retailers: Collect ...

Submitted by Grif on Fri, 07/01/2011 - 20:41.

Fun fact: Gamestop.com is a seperate entity from brick-and-mortar stores. Since it's based in Texas, and has no branches in California, it can enjoy the same non-taxing that Amazon.com and Overstock.com has. When you order from Gamestop.com, you're ordering directly from the warehouse (In Texas), and not a local location.

_____________________________________________________________________________

"Power means nothing without honor and pride."

http://grifsgamereviews.blogspot.com My video game review site.

Atlanta Video Games Examiner for examiner.com

Re: California to Out-of-State Online Retailers: Collect ...

Submitted by Shahab on Fri, 07/01/2011 - 02:13.

As a Californian myself I have to say this was stupid. We all knew exactly what Amazon and others would do, cut ties to all affiliates in California, thus causing small California businesses who rely on those programs to be hurt. This won't bring any signficant money into the state, on the whole we'll probably lose out.

California has to take a good hard look at what it wants to do about property taxes before we'll be solvent again. That and cut services.

Re: California to Out-of-State Online Retailers: Collect ...

Submitted by Mr. Stodern on Fri, 07/01/2011 - 00:07.

Thanks a lot to everyone who voted Jerry Brown into office. Good job. Real good.

CA is fucked.

Re: California to Out-of-State Online Retailers: Collect ...

Submitted by Grif on Thu, 06/30/2011 - 22:56.

I can see the tourism brochures now. "California: What Constitution?!"

_____________________________________________________________________________

"Power means nothing without honor and pride."

http://grifsgamereviews.blogspot.com My video game review site.

Atlanta Video Games Examiner for examiner.com

Re: California to Out-of-State Online Retailers: Collect ...

Submitted by Guamish on Thu, 06/30/2011 - 21:18.

Good bye jobs. Not like California needed you or anything.

Re: California to Out-of-State Online Retailers: Collect ...

Submitted by katiekat on Thu, 06/30/2011 - 22:27.

i spit out my milk when i red your coment it made me laugh so hard. but yea its redickulis how peaple seam the way to get out of det is to tax in sted of you know maybe cuting spending i know i know ratickel idea

am dyslexic and have a learning disablement from when i died as a baby and sustained brain damage do to lack of oxygen pleas pardon my bad spelling and grammar

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am dyslexic and have a learning disablement from when i died as a baby and sustained brain damage do to lack of oxygen pleas pardon my bad spelling and grammar-

Re: California to Out-of-State Online Retailers: Collect ...

Submitted by Bill on Fri, 07/01/2011 - 09:03.

Understood, but you can always run your text through a spell-checker before you post if it bothers you enough to feel the need to explain it.

Re: California to Out-of-State Online Retailers: Collect ...

Submitted by katiekat on Fri, 07/01/2011 - 11:10.

it doesint bug me what bugs me is when i get peaple acting like gramer notzies and herassing me over it so i put it in becuse for the most part it keeps ppl from sayingthings

am dyslexic and have a learning disablement from when i died as a baby and sustained brain damage do to lack of oxygen pleas pardon my bad spelling and grammar

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am dyslexic and have a learning disablement from when i died as a baby and sustained brain damage do to lack of oxygen pleas pardon my bad spelling and grammar-

Re: California to Out-of-State Online Retailers: Collect ...

Submitted by Conejo on Sat, 07/02/2011 - 09:02.

Spell Check.

If you're aware enough that you have an awful way with words, be productive enough to counter it rather than using your disability as an excuse for laziness.

Here are we -- and yonder yawns the universe.

Re: California to Out-of-State Online Retailers: Collect ...

Submitted by airford on Thu, 06/30/2011 - 20:34.

This bill is aready in New York, Illinois, Rhode Island, and North Carolina. I find this counter-productive in that the bill just makes Amazon, Overstock, drugstore, and E-bay remove their presence from the state rather than rework their entire site to accomidate individual states.

Rhode Island General Treasurer Frank T. Caprio was recently quoted, saying, "The affiliate tax has hurt Rhode Island businesses and stifled their growth, as they’ve been shut out of some of the world’s largest marketplaces, and should be repealed immediately."

Re: California to Out-of-State Online Retailers: Collect ...

Submitted by hellfire7885 on Thu, 06/30/2011 - 20:41.

It's just like the pre MPAA days.

Re: California to Out-of-State Online Retailers: Collect ...

Submitted by Cheater87 on Thu, 06/30/2011 - 20:20.

California has an unconstitutional bill hard on now.

Shout box

Technogeek: If the developer were male there wouldn't have been a "conversation" in the first place.10/19/2014 - 2:27am

Monte: trolls are just at their absolute worst when it comes to women and feminist. You could bet good money that if the developer were male the trolls would be silent and the conversation would actually focus on the journalism.10/18/2014 - 9:18pm

Monte: Papa: Not the first time we've had a journalism scandals before, but the harassment never got close to this level; the difference with this scandal is that feminists are involved. Without the feminist angle, their would be A LOT less harrassment10/18/2014 - 9:15pm

Papa Midnight: Monte: That's honestly rather short-sighted. As has been proven with other persons who have been targeted, if it wasn't Quinn, it would be someone else.10/18/2014 - 6:26pm

Avalongod: I think that's part of what gives an esoteric news story like this real life...it taps into a larger narrative about misogyny in society outside of games.10/18/2014 - 3:29pm

Avalongod: @Monte, well the trolls made death threats that came to police (and media attention). I think this is tapping into a larger issue outside of games about how women are treated in society (like all the "real rape" stuff during the last election)10/18/2014 - 3:28pm

Wonderkarp: Zippy : Havent tried the PS4 controller. might later.10/18/2014 - 2:37pm

Monte: Seirously, If Quinn was not involved and GG was instead about something like the Mordor Marketing contracts, the trolling would have never grown so vile and disgusting. There have been plenty of movements in the past that never sufferred from behavior..10/18/2014 - 1:57pm

Monte: We have seen scandel's before but the trolling has never been as vile as what we see with GG. Trolls usually have such a tiny voice you can barely notice them, but its like moths to a flame whenever femistist are involved.10/18/2014 - 1:53pm

ZippyDSMlee: Wonderkarp: You might be able to if you had a PS4 controller.10/18/2014 - 1:00pm

MaskedPixelante: http://store.steampowered.com/app/327940/ Night Dive starts charging for freeware.10/18/2014 - 12:21pm

Matthew Wilson: the sad thing is there are trolls on both sides of this. people need to stop acting like their side is so pure.10/18/2014 - 12:19pm

MechaTama31: So, only speak out on a scandal that hasn't attracted trolls? I wouldn't hold my breath...10/18/2014 - 10:49am

Monte: I feel like GG just needs to die. The movement is FAR to tainted by hatred and BS for it to be useful for any conversation. Let GG die, and then rally behind the NEXT gaming journalism scandal, and start the conversation fresh.10/18/2014 - 10:33am

quiknkold: and we dont have a Dovakin to call a cease fire10/17/2014 - 7:37pm

quiknkold: The whole thing is Futile. Both sides are so buried deep in their trenchs that there isnt a conversation. Its just Finger Pointing, Name Calling, Doxxing, Threats. there needs to be a serious conversation, and GG isnt it.10/17/2014 - 7:37pm

quiknkold: I thought it was a good article. Jeff is right. I feel like GamerGate did destroy its message. I am for Ethics in game journalism, but man. so much hate. and its on both sides. I've seen some awful stuff spewed on twitter. Its a big reason why I exited..10/17/2014 - 7:34pm

Matthew Wilson: while he focused on gg, he did call out both sides crap.10/17/2014 - 7:18pm

Papa Midnight: That was a damn good read offered by Jeff Gertsmann.10/17/2014 - 7:17pm

Matthew Wilson: http://www.giantbomb.com/articles/letter-from-the-editor-10-17-2014/1100-5049/ deferentially a nice write up.10/17/2014 - 6:44pm

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