[markwelch]

As I re-read the text of this bill (AB 178 (http://www.leginfo.ca.gov/pub/09-10/bill/asm/ab_0151-0200/ab_178_bill_20090202_introduced.pdf)), I suddenly realized that it would NOT just affect out-of-state merchants, but would impact one of California's largest e-commerce players: eBay.

eBay is a "California resident," and it is paid by its sellers for referring them customers. Merchants who sell more than $10,000 of merchandise to Californians on eBay would be required to collect and pay sales taxes. Ironically, most sellers using the Amazon Marketplace would generally NOT be required to collect and pay sales tax!

[TrishaLyn]

eBay's affiliate program really isn't on my radar, but for any eBay publishers, have they addressed this to you at all like CJ has?

[markwelch]

I actually was not referring to eBay's affiliate program.

eBay's entire business model is founded on collecting a percentage of the sale price (a commission), and eBay is a California resident. Unless the bill is amended pretty carefully (and I'm sure that eBay, ValueClick/CJ, and others will seek this), the law would force ALL non-California merchants using eBay or ValueClick to either start collecting California sales tax, or else stop doing business with these firms.

[Convergence]

Google and Yahoo - both "residents" of California.

Any retailer having any representative, agent, salesperson, canvasser, independent contractor, or solicitor operating in this state under the authority of the retailer or its subsidiary for the purpose of selling, delivering, installing, assembling, or the taking of orders for any tangible personal property.

And both "refer" traffic to retailers...

This bill would include in the definition of a “retailer engaging in business in this state” a retailer entering into an agreement with a resident of this state under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link or an Internet Web site or otherwise, to the retailer, if the cumulative gross receipts or sales price from sales by the retailer to customers in this state who are referred pursuant to these agreements is in excess of $10,000 during the preceding 4 calendar quarterly periods, except as specified.

Not a lot of wiggle room...