Thank You Governor Schwarzenegger
I just received this amazing announcement from Governor Schwarzenegger’s office. Turns out that all of our hard work and persistance actually has paid off (even if they did end up blocking our emails last week, which frankly was incredibly annoying).
The fight’s not over…last night, the nexus proposal appeared in a new bill, ABX3 19, which is identical to SBX3 17, and it was passed by the Senate (24-14). It appears that our legislators are fond of playing the shell game, so we must continue to be vigilant in our efforts until a solid resolution is obtained.
GAAS:355:09
For Immediate Release:
Wednesday, July 1, 2009
Contact: Aaron McLear
Rachel Cameron
916-445-4571Governor Schwarzenegger Remains Committed to No New Taxes, Announces Overstock.com Will Continue to do Business in California
Following Overstock.com’s announcement that it will pull its affiliate advertising from California due to the legislature’s proposal to increase taxes and the announcements of other companies such as Amazon.com threatening to follow suit, Governor Schwarzenegger today reiterated his deep commitment to not raising taxes to solve our state’s budget deficit and announced Overstock.com will reinstate California-based internet affiliate advertisers:
“After passing the largest tax increase in California history, it makes absolutely no sense to go back to the taxpayers to solve the current shortfall – that’s why yesterday I vetoed the majority vote tax increase passed by the legislature. With unemployment at an all time high, we should be doing everything we can to – keep jobs and create jobs – in California. That is why my Administration immediately contacted Overstock.com when we learned of this news and, I am pleased to announce Overstock.com has reversed its decision and will continue to do business with affiliates here in California. I will continue to fight to keep jobs and businesses in California.”
California lawmakers proposed a tax on affiliate advertising and sent legislation to the Governor, but as promised he vetoed it because we cannot solve our budget deficit by raising taxes and driving businesses out of the state.
Overstock.com estimates its internet affiliate advertisers in California create millions of dollars in revenue.
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And the exodus begins…
Unfortunately, with the threat of the California budget hanging over their heads like Damocles sword, the first merchant has pulled their affiliate program from California.
According to David Lewis of Cashbaq.com, Overstock.com sent a boiler plate rejection letter out to their affiliates via CJ’s internal email this afternoon.
I’m sorry to see the impasse come to this, but Democratic legislators flat out refused to see the light here and as other large and small companies follow suit, we will simply see more money leaving the state.
I would urge affiliates that receive these sorts of removal letters to send them directly to your representatives and ask them point blank why they stood idly by and did nothing to protect your business, your income, and your families from financial devastation.
Click here to find your Assemblyperson and Senator.
**UPDATE**
Here is the full text of the “official” letter from Overstock that affiliates received tonight:
June 30, 2009
Dear Affiliate:
We regret to inform you that the North Carolina, Rhode Island, California and Hawaii state legislatures have or are about to pass unconstitutional tax nexus and collection laws in an attempt to force Internet retailers to collect and remit sales tax on all sales to residents of these states.
These legislative measures purport to establish a state tax nexus on the basis of contracts with local advertising affiliates, even when none exists under U.S. Supreme Court precedent. Overstock.com, Inc. (“Overstock”) has no tax nexus in any state other than Utah.
Due to the passage or eminent passage of these unconstitutional laws, Overstock regretfully must discontinue its relationships with all of its advertising affiliates in these states.
Accordingly, it is with reluctance that Overstock hereby gives notice of termination of your participation in Overstock’s Affiliate Program.
Any money owed to you, based on your advertising services prior to termination, will be paid in the normal course of business.
Overstock regrets that it has been put in this position. In the future should these laws be vetoed, declared unconstitutional, or repealed, we will cheerfully resume our former business relationship.
Respectfully,
Jonathan E. Johnson III
President
Overstock.com, Inc.
AB178 Nexus language added to CA budget bill
And it’s time for round three apparently…
On Monday, June 22nd a group of us will be headed to the California State Capitol yet again to fight what is now known as the “Amazon Tax” or “Internet Advertising Tax”. We’d love to have you in attendance if you can make it. Please contact me for more details if you are available.
If you are unable to make it on such short notice (believe me, they sprung this on us last minute), please give us your support by contacting your Legislator via email, phone and twitter using the contact list I created below.
They prefer to hear from their own constituents of course and honestly, it’s people that live in their own district that seem to make the biggest impact. They don’t like upsetting their own voters. You can locate your representative via zip code here.
Also, please feel free to contact the Governor’s office and twitter him your concerns at @Schwarzenegger.
Amazon Makes a Move
Looks like the sleeping giant is starting to stir. On March 19th, Amazon informed Hawaii of it’s intention of removing all Hawaiian advertisers from its Amazon Associates program if the Hawaiian legistlature persisted in passing HB 1405. Almost as if they were trying to flaunt their power and call Amazon’s bluff, the bill passed the first hurdle to becoming a new law.
Don’t think that Amazon didn’t notice.
This morning, Amazon made a dramatic change to their Associates Program. As of May 1, 2009, Associates located in the US and Canada who use PPC as their way to drive traffic and sales to Amazon WILL NO LONGER BE PAID FOR THEIR EFFORTS. This new change applies to Amazon.com, Amazon.ca, and Endless.com That’s right. Amazon just cut the legs out from under all their paid search affiliates.
In addition to forbidding paid search, Amazon is removing data feed access to advertisers who do not notify Amazon prior to May 1 that they will only use the feed content as specified in their Web Services Customer Agreement.
Amazon has provided a no nonsense FAQ on this change. They are very specific on the use of interstitials especially, so don’t think that that is an easy end run around the situation…they’ve already got their eyes on it.
All the merchants are watching Amazon. They are setting the standard for how the rest of the industry reacts. As much as it pains me to say it, expects other merchants who have previously allowed PPC affiliates to follow suit in short order.
I would also venture to say that Amazon will be making other modifications to its program as these controversial nexus laws that unfairly and specifically target their company spread.
AB 178 Hearing Update
It was announced this morning that the hearing for AB 178 in California has been postoned until Monday, April 27th at 1:30 pm. It is still in room 126 at the State Capitol.
We urge you to become the proverbial squeaky wheel!! Call your Assemblymember, write them, email them, visit them at their district office or at the Capitol, pester their staff. Explain to them that taxing advertising is a terrible precedent to set!
