NPR: Amazon Cuts Ties with Calif. Associates
NPR’s Morning Edition had a report today on the news that Amazon is canceling the accounts of thousands of California affiliates.
Savings.com is one business that got a termination notice. It used to make a sizeable amount of revenue from referring customers to Amazon. Now, says Savings.com’s Thomas Swalla, that income is gone.
Mr. THOMAS SWALLA (Savings.com): I definitely understand the intention of what the lawmakers are trying to do. Unfortunately they affected businesses that are going to hire people and invest in their state. And it’s a real effect. I mean, it has a real financial impact.
KAUFMAN: He says Savings.com may be forced to pack up its office and move to another state where it will still be able to get sales commissions for online sales referrals.
Danny Sullivan, an influential search engine blogger who had links to Amazon on his site and has received small commission payments, suggests that Amazon’s tactics carry a tinge of blackmail.
Mr. DANNY SULLIVAN (Blogger): It felt like Amazon wanted to use the affiliates as a kind of a pawn in all this, that by cutting loose these people, that they will go forth and try to get the law changed.
KAUFMAN: Amazon calls the new tax law unconstitutional and counterproductive. The company declined our request for an interview, but Amazon has argued that it’s unreasonable and unfair to compel online retailers to collect sales taxes in 50 states with different rules and different rates. The company has said it would support some sort of national standard on the sales tax issue.
But for now the focus is on California. While Amazon is terminating payments to those who send them business, the company still has offices in California. And the state will no doubt try to get the sales tax it thinks it’s entitled to. Amazon will surely fight, just as it’s done in the six other states that have passed similar tax laws.