Tuesday, August 16, 2011

Amazon vs. California

In a recent move to try and bring revenue to the State, California lawmakers added a provision to their new budget requiring internet sites such as Amazon (and aimed specifically at Amazon) to pay sales tax on sales to customers residing in California.  The State used the argument (this is simplified) that while Amazon doesn't have a physical presence in California, they have "Associate members."  These are folks who add Amazon "widgets" to their site so customers can click the widget and be taken to the product page at Amazon (Feathered Quill uses these widgets on our site).  This, argued California legislators, proves that Amazon has a "presence" in the state and those sales should be taxed.  Amazon fought back, removing all Associate accounts in California and asking the customers to fight back.  There was even talk that Amazon was trying to get the issue put to a ballet question.  California is not the first state to try this tactic, there have been a few others.  And each time, Amazon has fought back by removing Associate accounts from people living in those states.

It seems that Amazon's overreaching attempts at controlling what states can/cannot do has backfired.  There is a growing movement in California to boycott the company.  Lots of stories about the issue are flying around the web.  A quick search finds:

HHS Network California

TechFlash

Puget Sound Business Journal

It will be interesting to see where this goes.  Stay tuned....