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Re: “Taking on

I agree that Amazon should collect California sales tax, but this bill won't achieve that goal.

Amazon is already re-structuring its business to prevent the law from applying. Amazon has already announced that it will terminate its advertising relationships with web publishers , if similar bills pass in two other states that have held hearings (California's first hearing on this bill will be April 27, so Amazon hasn't yet announced whether it will take the same position here).

The "real impact" of the law is on web publishers who accept "performance-based advertising" (nearly all publications, perhaps even the Express). Since they are being used as the "hook" to capture merchants, hundreds of New York merchants simply terminated their advertising relationships with New York publishers, after the New York law was enacted. They'll do the same thing to California web publishers -- including me.

Very few folks oppose the idea of sales-tax collection by Amazon and other large retailers for whom the cost would be trivial; but the U.S. Supreme Court has made it clear that the huge burden on smaller retailers (who would have to develop software to conform with thousands of sales-tax districts in dozens of states) prevents such laws from being imposed. The U.S. Supreme Court even recommended the solution: states should work together to create a multi-state sales-tax system, providing either technological tools OR a simplified set of rules for sales-tax collection. California refuses to participate in such efforts.

I'm a web publisher in Hayward, California.

Posted by Mark Welch on 04/21/2009 at 5:06 PM

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