California Senate will have their third reading and a vote on the budget, AB1625 tomorrow, August 31. As you are probably aware, the current version of the California budget includes several measures, including “Affiliate nexus tax” also called the “Amazon tax”.
If the budget passes with this amendment intact, some merchants may decide to terminate their relationships with California Affiliates.
The California Internet sales tax could require remote merchants to collect sales tax on sales to California residents. Rather than collect and remit the sales tax, merchants may opt to remove California Affiliates from their advertising channel in hopes of removing the nexus.
Opinions are mixed as to whether or not the budget will pass with the affiliate tax amendment included. It also remains to be seen whether or not the Governor will veto if it does pass. I know most of my California affiliate readers have already contacted their legislators but there is still time to act if you haven’t already done so.
At the very least, you want to email your Senators. If time permits, reach out to other Senators. Use the guidelines suggested in How to Voice Opinions on Bills. In that post I have included a general guide as well as a sample letter. Remember, be sure to make your letter personal; explain the potential impact and loss of income.
If it passes and takes effect the impact of the law will vary depending on your business model. It is important to be be proactive in terms of preparing your business model and be active in voicing your opinion to legislators. Actually, this is always sound business advice.
Diversify and always have a back up.