California’s new tax bill, AB 28X has been signed into law. This new law “tax” on Internet sales through affiliate advertising will immediately cut small-business website revenue up to 30% some experts say.
This new tax is poised to generate $200 million a year in new revenue for the state, many critics claim this is not going to happen, instead online retailers will simply dump their affiliate programs to avoid getting smacked by the tax man.
Amazon has confirmed it’s termination of its affiliate advertising program with some 25,000 California based websites
Here what Amazon has released to the public in regards to this new tax law.
“(The bill) 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.”