Early in 2011, California Governor Jerry Brown signed legislation imposing a tax upon affiliates of Amazon.com which resulted in Amazon suspending affiliate operations in that state. Amazon took the stand that it should not have to collect sales tax based upon not having a physical presence in the state. California in turn felt that since Amazon was involved with a startup company called Lab126 in Cupertino, California, that in fact a physical presence did exist and therefore the sales tax could be imposed.
With the suspension of some 25,000 affiliates in California, the state cut itself off from another source of revenue. This would have been the tax on income that would have to have been reported form the affiliate commissions that were generated and paid to California based affiliates. I did come across instances where people were going to Nevada and other states so that they could maintain the business relationship with Amazon.
Months after the bill was enacted, it was later repealed and Amazon reestablished it’s affiliate operations in California. I must admit I was happy to see this because I enjoy promoting Amazon products. It also gives people an avenue to pursue business ventures in the online arena even when the time constraints of a regular job can get in the way. With this new development having taken place, let us all continue to be thankful for any opportunities to pursue business success that come our way.