You don’t have it quite right. This issue is a little confusing, mainly because of the amazon “affiliate” terminology which can mean two things. Amazon affiliates in California who sell through the amazon storefront already are responsible for collecting sales tax. There are also affiliates who simply refer traffic to Amazon and collect a small commission of the sale. There is no sales tax collected on the referrals, because it is Amazon, making the transaction. The change in the law is that California says because Amazon has these affiliates in California, it therefor has a presence in California, and must collect sales tax on every single transaction with a California resident, regardless of whether an affiliate is involved.
Ok, thanks, MrShoop. I was trying to think this through again, and how a Washington company can be forced to pay taxes to California when it already does pay taxes to that state (as you say, really the affiliates collect sales tax, but the point is Calif is getting their share).
Every company in the world has affiliates with other companies, it seems unethical to pass a law saying because Amazon has a relationship with XYZ company, tax their sales in Calif....or any other state that may determine to pass that type of law! They already collect sales taxes for their home state of Washington.
I live in Oregon, buy a zillion things from Amazon, and never pay tax here. I do pay tax when I have the item shipped to a friend in Washington. And that we expect, but not additional taxes.
If Amazon did not aggressively make the move they did, my wacky governor here would look at Calif and say, hey, way to get more tax revenue (although I’m sure there are fewer affiliates in Oregon), and this could spread. It seems double-taxation to me and puts a burden on buyer, affiliate and seller because the total cost of the product goes up (and therefore sales go down).
As it is, it’s a new law and a new tax which has hopefully been rendered null by Amazon cancelling certain relationships. Let’s hope that bold stroke will keep other states from trying this idea.
Thanks for the info.