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PMA lays out its plan to stop California’s Amazon Tax
The following is a message from the Performance Marketing Alliance which lays out the alliance’s plan and argument against California Assembly Bill 178.
As you might have heard, affiliate marketing is under attack in California. Assembly Bill 178 is a California version of New York’s “Amazon Tax”. Plain and simple it is an ugly situation. This post is a summary of the situation and how you can help.
The situation
AB 178 – you can read the bill here - would establish that a nexus is created in California when any out-of-state retailer enters into any marketing agreement with a California resident or business in exchange for compensation or commission, such as by a link, website, or other form of advertising which generates referrals in excess of $10,000 in sales. Once a nexus is established, AB 178 would require retailers that receive direct or indirect referrals from online advertising on websites to collect sales tax in California.
When New York State enacted such a bill, hundreds of retailers immediately severed their relationships with affiliates residing in New York State including Overstock.com and the Home Shopping Network.
Bills like this will have a chilling effect on the affiliate marketing industry.
We need to stop this legislation and we can! With the support of CalChamber and CalTax, California affiliate marketers and the Performance Marketing Alliance is launching a coordinated grass-roots campaign that targets congressional representatives. A similar bill was killed last year by the CalChamber coalition, so we can get this done.
How you can help
We have an attack plan that includes sample letters, fact sheets, congressional contacts by zip code, and a “Visit Sacramento” day, to put faces in front of decision makers. We have two weeks to make a difference. Time is critical here.
Everything you need to make a difference is itemized below:
- Sign our group letter – we want over 200 California businesses to sign this letter. Click here to see the letter and sign up. It’s important we gather as many names, company names, as possible. We have made it easy, if you do nothing else do this! You just need to fill out a form.
- Write a letter to your State Assembly Member – this really does make a difference.
- Sample letter to write your State Assembly Member here - make sure to personalize it.
- Find your State Assembly Member here by zip code.
- Assembly member’s address here – click on the Assembly Member’s name, then find their contact info on their web page. Please sent your fax to their local office (not Sacramento). It’s best to fax AND email.
- Join our lobby day in Sacramento on March 31. We need to put a human face to this story and the best way to do that is to meet with your Assembly members face-to-face. Brook Schaaf and Karen Garcia are organizing this. You can get in touch with them via email here: lobby_day@performancemarketingalliance.com
- Visit your State Assembly member and tell them to stop this bad bill. This will have a huge impact! To find out more email caaffiliates@gmail.com
- Editorial board visits – you can email caaffiliates@gmail.com to participate.
Please note, we will have more on district visits and and board visits in the next few days and I’ll post those on ReveNews too.
The greatest strength of affiliate marketing has always been our amazing entrepreneurial spirit. We need to put that spirit to work to fight against this bill. If we work together we can win.
I applaud the work that you, the PMA, and others are doing to help get actively involved. This law should not be passed because ultimately CA tax revenue will decrease as a result.
I have 2 questions in general about this law, however:
1.) How are CPC marketing agreements not considered “compensation for generating an online lead that results in a sale” under this proposed law?
Nearly every online retailer currently tracks clicks from a pretty big CA company (name rhymes with Moogle *cough* *cough*) and the other search engines directly down to sales and adjusts their CPC bid accordingly. So why is there CPC Loophole?
2.) If there is in fact a CPC Loophole, why can’t the networks just offer Merchants and Publishers affected the option to convert their current links to a CPC compensation structure? I am sure the merchants and Networks could figure out what the appropriate CPC rate would be on a publisher by publisher basis and adjust for seasonal fluctuations.
I know the law should be killed, but wouldn’t this solve the problem if the law gets passed?
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