Everyone knows by now that that the federal and state governments are practically broke. With everyone in Congress rummaging in every corner for any sign of a little money that's been overlooked, they have suddenly hit upon something that they have toyed with off and on for a while now - and that is a plan where they require everyone to pay a state sales tax and local sales tax every time they buy anything on the Internet by following an affiliate link somewhere. They call it the Main Street Fairness Act. What does this have to do with fairness on the main street, you ask? It's just that each time you buy something from Amazon, you end up not paying any sales tax; that means that Amazon is able to offer you such a low price that they undercut your local main street shop that has always to pay a local tax and a state sales tax. The lawmakers want to make it easier for your local businesses to compete with Amazon. In some states like Alabama, you have to pay three taxes - one to your state, one to your county, and one to your town. Suddenly, buying from out-of-state on the Internet is no longer a bargain if you live in one of the states that have local taxes. The latest to jump on that bandwagon is the state that is most famously broke of them all - California.
California especially, is aiming its legislation at Amazon. Amazon is gearing up for a fight and threatening to fire all its affiliates. Why fire the affiliates? California considers affiliates living in California with webpages with links to Amazon's merchandise to be businesses that actually have a physical presence in the state. California is just trying to find a way to tax Amazon. Of course, those affiliates are a valuable commodity; Wal-Mart, Sears and other online retailers are trying to get all the ex-Amazon affiliates to come to them. They offer to help them make up for lost revenue by offering the Buy Now links on their websites to retailers like them rather than Amazon. Some states have a law that asks consumers to pay a state sales tax on their own - even if it isn't tacked on to the price of what they buy. But no one actually pays it, and the states don't pursue it. Wal-Mart and Sears have actual stores in every state; Amazon does not. So the law affects Amazon and no one else.
Amazon has a huge distribution center in Texas. That makes anyone buying from Amazon in Texas liable to pay sales tax. Apparently, Amazon never did this. And when they got a quarter-billion dollar sales tax bill from the state, they threatened to close down their distributor center and fire all their employees. If California or any other state manages to enact that law that says that going to Amazon and buying something through an affiliate banner ad attracts sales tax, that'll be bad news for everyone who makes a living this way. Anyone in California who now needs to buy stuff from Amazon will have to make sure that they go directly to Amazon, and that they don't follow a link elsewhere. If they do, they'll be slapped with state sales tax.
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