According to this piece at Big Government.com, more than 70 businesses with affiliate relationships to online retailers like Amazon.com and Overstock.com have closed their California businesses and relocated elsewhere. Many others simply dropped their affiliate programs, or had their affiliate programs terminated by retailers. This comes in the wake of California’s “Amazon tax”, which forced online retailers to collect and remit sales tax from California affiliates. And now, according to the report, “Online businesses and entrepreneurs are leaving the state, thus risking an actual reduction, as opposed to marginal increase, in California’s tax revenue.”
Backers of the legislation seemed to believe that affiliates would be happy to work with other retailers who also operate affiliate programs, or that online retailers targeted by the law would not end affiliate relationships and the threat was idle. In neither case do those assumptions now seem correct.
Oh, well. Looks like California will suffer more “bad luck”. Unexpectedly, of course.