By Dave Bryan

ANAHEIM (CBS) — A controversial budget-related bill that was signed into law by Governor Brown Wednesday has already touched off a political war between the largest online retailer and the State of California.

The new law imposes a California sales tax on online purchases made by people living in this state.

Independent recording artist Glenn Richards, based in Anaheim, is an affiliate. This means that he earns a commission from on any item sold to a customer, who was referred by a link on Richards’s musical website.

But Richards and about 10,000 other Amazon affiliates, got emails from the company announcing they will no longer be a part of the affiliate program. Amazon shut down the program for California entrepreneurs, because the State of California is forcing Amazon to collect sales tax on California purchases.

“As a result, we will terminate contracts will all California residents that are participants in the Amazon Associate’s Program. As of the termination date, California residents will no longer receive advertising fees for sales referred to,” said Richards reading the letter from Amazon.

Richards, whose “fright wig” has become his calling card as a performer, said he feels like he has been caught in the middle of a political battle, which was not of his making. Now he and other small affiliates are being crushed by the angry big corporation, whose message — disenfranchising about 25,000 California-based affiliate websites — is very clear.

“You’re out of business. Sorry, we don’t like what your government is doing. And I don’t think that is a fair message… It’s wrong. They’re fighting the wrong people. They’re fighting the people, who make them money. I mean, I don’t have anything to do with politics,” Richards said.

With California desperate for additional revenue, the Internet was an easy target. Supporters claim the tax could bring in about $200 million in additional revenue at a time when it’s sorely needed.

But opponents claim the law forces companies like Amazon to exclude Californians from the affiliate program and with it will go thousands of jobs and millions of dollars in business revenues for small entrepreneurs.

Some of them blamed the state and said they will move out of state to save their affiliate revenue.

But Richards blamed Amazon and its CEO, Jeff Bezos, who he charged are unfairly punishing he affiliates.

“No discussion, no consideration. It’s just them versus the government or they disagree with the tax policy and so they’ll put you out of business for it, because they don’t want to deal with it,” Richards said.

Amazon called the new law is unconstitutional and destructive to states like California, claiming it would actually reduce revenue.

Amazon said it would continue to fight the law. In the meantime, the law reportedly goes into effect immediately, which means the State of California will be getting sales tax revenue from Amazon and other online retailers.

Comments (14)
  1. Alex says:

    What a bunch of idiots we have in our California government. I wish we could elect people who at least took Economy 101. The only thing they accomplished is to leave 10,000 people without source of income. And they think that by creating more unemployment they will create more income. Wake up people.

    1. Duh! says:

      Yeah, the Democrats obviously didn’t give this one much thought.

      Just like Obama saying that raising the taxes on the rich would not hurt the middle class. Hello!!! The products that the rich buy provide jobs to the middle class. If they are no longer buying products because they have less money due to taxes, then there will be job cuts at the places that produce the products.

  2. Cruiser says:

    Amazon did the right thing. I hope others follow.

  3. Rick says:

    Poorly written article riddled with typos. CA will not be getting tax revenue from Amazon if they put sellers and affiliates out of business due to the new law. Duh…

    1. Jesse says:

      I feel your faittrrsuon with Amazon’s decision. We had to deal with it in Illinois as well. My guess is that in the long run Amazon will open back up to affiliates as they will be forced to collect taxes nationwide.

  4. cbs4game says:

    We are a Marxists radicals . Please join us at CBS Miami for the dawning of a new Peoples’ Revolution.

  5. GS says:

    Congratulations California, You just passed a bill that will cost more then it will ever raise.

  6. Aj says:

    Its sad to see that my taxes pay for idiots on CA’s capital hill…Instead of solving budget problems within the state itself, they target out of state business for a quick buck. CA has a bad spending habit and money mismanagement, and they keep playing hand me down with the bills to ca residents and now out state business. I don’t blame Amazon for cutting CA off, i wouldn’t like someone else dipping into my cookie jar for seconds when I’m already sharing my cookies. Need to get California off the coke…not feed the habit til you’re bone dry…

  7. ginny says:

    Amazon and others have made it very clear the past few years that they would cease to provide a source of advertising for vendors. Other states did the same as our brilliant elected officials have done, and Amazon haa acted in those states. So, in all their brilliant wisdom, they have decided to ignore these warnings, believing that Amazon would not do anything in response to their actions. Now Jerry and the Legislature, where is that 200 million you counted on from this tax gone bye-bye going to come from? Seems to even my feble mind that you’re in a bigger hole already and the budget is only how many days old?

  8. Joe says:

    Abolish GOVT. unions, SLASH state workers over the top health benefits and pensions and we will have BILLIONS in the bank. Has anyone ever been to the DMV?

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