[mellie]

California Bill 178 has officially moved to the committee for action. This means that it can now be discussed and voted on at the committee convenience. Make sure you have contacted every member of the Com. on REV. & TAX, via email phone and snail mail. Also post your comment online.

A simple majority is all that is needed to send it out to the full Assembly. There is a small chance that you can at least keep it in committee so make sure to air your opinion.

Most important - keep preparing your business model to survive mass terminations.

Once law is passed pool together, hire a CA sales tax lawyer. It is important that they specialize in sales tax so you can get the best possible advice.

Merchants should all examine the possibility of collecting the tax as a long term solution.

[MichaelColey]

Merchants should all examine the possibility of collecting the tax as a long term solution.So true. That's what it's going to come down to. I know that several other states (Minnesota for one) are VERY close to pushing through similar things, and I'm sure many others won't be far behind.

Terminating NY affiliates might have seemed like a logical solution when it was just NY. Terminating both NY and CA affiliates is a much harder choice. Terminating affiliates from 5, 10 or 15 states will be impossible to justify, and it'll come to that MUCH faster than you expect.

Terminating affiliates is just going to come back to haunt you. The affiliates you terminate will be severely impacted and many won't forget or forgive what you've done to them if (or more likely, when) you change course.

As more states enact these kinds of laws, there will become more and more pressure to create a national internet sales tax, and then it won't matter if you've terminated affiliates in impacted states. You'll still have to collect it, and you will have lost much of your best marketing force.

[Brian - ShareASale]

Michael and Mellie,

Well said - this issue promises not to go away but only to get bigger. Everyone should be preparing for it no matter what state you live in or do business in.

[Merchant Consultant Team]

>>Everyone should be preparing for it no matter what state you live in or do business in.

That's what we are recommending.

[mellie]

If you examine the definitions on the books I think just about every state will use the term " solicitor", "representative" and similar words as instances that create a nexus. They can all be interpreted to include affiliates.

As complicated as it will be - best answer collect the tax. Residents of the state should realize the tax is due anyway as a use tax. Not remitting it is a crime.


As I have mentioned to many in emails, this will be a hectic year. The government is cracking down on all the sales tax loopholes.