On a party line vote the Assembly Revenue and Taxation Committee this afternoon passed out Assembly Bill 153 by Assemblywoman Nancy Skinner (D-Berkeley).
Although not surprised, I’m disappointed by the Committee’s decision to move forward with a tax measure that will cost California jobs and hurt state revenues. There are as many as 25,000 internet affiliate businesses based in our state that could be wiped out by this bill.
Leading online retailers, including Amazon and Overstock, have informed me that passage of this bill will force them to terminate their relationships with their California-based affiliates.
Out-of-state retailers, with no physical presence in the California, have no legal obligation to collect California’s sales or use taxes. AB 153 is trying to redefine ‘physical presence’ to include the use of online affiliate advertisers based in California.
The bill simply won’t work. Out-of-state retailers will cut ties with their California affiliates and continue selling to California consumers. The only thing AB 153 does is kill up to 25,000 affiliate jobs in California. That’s the last thing we need.