Amazon Warns It Will Fire Affiliates

John Seiler:

Update, 6:13 pm, June 29, 2011: Gov. Jerry “Kill Businesses” Brown just signed this jobs-killing bill. It also slams Internet commerce globally, something anyone in California should oppose because of our huge Internet companies. Brown fashions himself a hip, with-it, high-tech kind of guy. He’s really a Luddite — an opponent of technological progress. Message to all California businesses: Drop dead.

Another L.A. Times article reported on one affiliate who’s already leaving:

Many of about 25,000 affiliates in California, especially larger ones with dozens of employees, are likely to leave the state, said Rebecca Madigan, executive director of trade group Performance Marketing Assn. The affiliates combined paid $152 million in state income taxes last year, she pointed out.

That’s what Ken Rockwell of San Diego, the owner of a 12-year-old photography website, said he planned to do.

“Will it be Las Vegas or Scottsdale or Ensenada?” he said. “It’s a question of where, not if.”

(Earlier post begins here:)

It didn’t take Amazon.com long to warn is California “affiliates” that soon all could be fired because of the venal actions of the state’s union-owned Legislature.  These affiliates, about 20,000 of them, mostly are small Mom and Pop outfits that use Amazon’s selling and marketing system. If you bought a used book or CD or DVD online, you probably bought through an affiliate.

This isn’t Amazon’s fault. It’s the fault of an out-of-control Democratic Legislature that hates businesses — and especially hates small businesses. It’s a Democratic Legislature that is owned by the government-worker unions that feed, like locusts, on the productive dues of their members, which in turn are funded by tax dollars.

The matter isn’t entirely over because court challenges, or some other unforeseen action, could cancel the tax. The tax is expected to collect some $200 million. But how can the tax be collected if all the affiliates are fired — and either go on unemployment and food stamps, or leave the state?

Our reporter Katy Grimes found the letter Amazon is sending out its affiliates:

Hello,

For well over a decade, the Amazon Associates Program has worked with thousands of California residents. Unfortunately, a potential new law that may be signed by Governor Brown compels us to terminate this program for California-based participants. It specifically imposes the collection of taxes from consumers on sales by online retailers – including but not limited tothose referred by California-based marketing affiliates like you — even if those retailers have nophysical presence in the state.

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 andincome 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 theAmazon Associates Program as of the date (if any) that the California law becomes effective. Wewill send a follow-up notice to you confirming the termination date if the California law isenacted. In the event that the California law does not become effective before September 30,2011, we withdraw this notice. As of the termination date, California residents will no longerreceive advertising fees for sales referred to Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com. Please be assured that all qualifying advertising fees earned on or before thetermination date will be processed and paid in full in accordance with the regular paymentschedule.

You are receiving this email because our records indicate that you are a resident of California. If you are not currently a resident of California, or if you are relocating to another state in the nearfuture, you can manage the details of your Associates accounthere. And if you relocate toanother state in the near future pleasecontact usfor reinstatement into the Amazon AssociatesProgram.

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

We have enjoyed working with you and other California-based participants in the AmazonAssociates Program and, if this situation is rectified, would very much welcome the opportunityto re-open our Associates Program to California residents. We are also working on alternativeways to help California residents monetize their websites and we will be sure to contact youwhen these become available.

Regards,

The Amazon Associates Team

June 29, 2011