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Amazon warning that it may abandon CA affiliates

Amazon may skip out on California, but that won't be the end of the passive-aggressive cycle

Financial trends and news by Faith Merino
June 30, 2011 | Comments
Short URL: http://vator.tv/n/1c2e

Good news and bad news for Amazon affiliates. The bad news is that if you’re in California, it’s quite likely that Amazon will be cutting all professional ties with you. The good news is that you can still shop on Amazon.

Amazon sent a mass Dear John email to all of its affiliates on Wednesday afternoon informing them of the plans to terminate Amazon’s California affiliate program if California lawmakers do, indeed, enact newly passed legislation requiring online retailers to collect sales taxes from shoppers. Yup, the above image is a picture of Jeff Bezos packing up his shit and leaving California. 

And so we start the ridiculous passive-aggressive game of Amazon chicken—the state needs to keep the jobs that Amazon provides, and Amazon knows it, but the state wants to stand its ground like any stern but loving authoritative parent would.  Thank you, Papa California, for looking out for our best interests.

So the cycle begins. Amazon is making its threats, the state will put the legislation into effect, Amazon will cut ties with its California affiliates—as it has with Illinois, Texas, Connecticut, and every other state that has gone down this path—and then the state will lose thousands of jobs. A few weeks or months will go by, the state will have time to realize how many jobs Amazon actually provided, and then Amazon will offer California a compromise: an online tax exemption in exchange for x,xxx number of jobs and Amazon’s commitment to invest enough money in the state to completely eclipse what it would’ve paid out in taxes.

At least that’s the route that the company went with Texas and Connecticut. Both states are said to be working with Amazon on the deal now, which would effectively exempt Amazon from having to collect online sales taxes. Customers are happy, Amazon pays its dues, and the states get the money they need to rebuild their economies.

Will Amazon end up going this route with California? Most likely.

In an email to California affiliates, Amazon wrote:

We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.

As a result, we will terminate contracts with all California residents that are participants in the Amazon Associates Program as of the date (if any) that the California law becomes effective. We will send a follow-up notice to you confirming the termination date if the California law is enacted.

But Amazon lightened the dour mood by ending on a happy note:

We would like to clarify that this development will only impact our ability to offer the Associates Program to California residents and will not affect their ability to purchase from Amazon.com, Endless.com,MYHABIT.COM or SmallParts.com.

...in case you thought I was joking about the good news part.

 

Image source: nytimes.com

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