Over 5,000 small sellers have joined together to oppose California’s affiliate nexus bill, AB 153.
This legislation attempts to force out-of-state sellers to collect California taxes on sales to state residents. Presently, the US Supreme Court regards state sales tax systems as unreasonable burdens on interstate commerce, so sellers only have to collect taxes for states where they have a physical presence.
AB 153 would extend the physical presence classification to any business that pays sales commissions to California websites, known as “affiliates”. This trick has failed in other states like North Carolina, Illinois and Rhode Island, when big retailers just abandoned their affiliate relations with websites in those states. And in Illinois, a leading affiliate company actually relocated its jobs to Wisconsin to avoid the effect of this law.
In less than 24 hours, eBay small sellers and buyers sent more than 17,000 letters to Sacramento to oppose AB 153.
What makes AB 153 worse than previous affiliate nexus bills is that since eBay is based in California, it might be considered an affiliate business. This may mean that AB 153 could require every eBay seller to collect California taxes on its sales to Californians.
Also, California is a state legislation leader, and if California expands Internet sales taxes, other states will follow suit, enacting legislation that will force sellers to meet their costly and difficult sales tax collection requirements.
To help its sellers protect themselves, eBay launched a “Main Street” campaign to oppose this bill. In less than 24 hours, eBay small sellers and buyers sent more than 17,000 letters to Sacramento to oppose AB 153. And more letters are on the way.
- Amazon to shut down California affiliates over new sales tax law (arstechnica.com)
- Cash-Strapped California Goes After Internet Sales (themoderatevoice.com)