[theslacker]

All I can say is wow. This news just came out. They really want to take away the people's vote....... Disgusts me.

Online sales tax proponents move to invalidate Amazon referendum - latimes.com

[Chuck Hamrick]

Looks like the opposition pushed the politicians to find a way to beat Amazon to the punch. Some of the feedback I got at summit this week was that Amazon wouldn't have a problem getting enough signatures for the referendum.

That's doable, said Bill Dombrowski, president of the California Retailers Assn. The latest bill, he noted, has raised a threshold for exempting small Internet sellers from collecting the California sales tax. The increase from annual sales of $500,000 to $1 million was sufficient to get EBay Inc. to remove its opposition, Dombrowski and state Sen. Loni Hancock (D-Berkeley) said.

That might be the salvation for small boutique merchants homed in California.

[AffiliateHound]

This linked article is the most poorly written, ambiguous, piece of trash I've read in the LATimes that I can remember. There are many assumptions made but no facts. I have tried searching for the actual bill and can locate nothing that fits the article description.

Also, I do not see how the described bill could affect a referendum already approved for signatures - that would be an unconstitutional ex post facto application. Pending matters should be subject to existing laws and procedures.

If anyone has any DETAILS about the bill, especially the bill number, please post.

Originally Posted by Chuck Hamrick

That might be the salvation for small boutique merchants homed in California.

CA based merchants have always had to and generally do (at the risk of the massive and unrelenting force of the CA Board of Equalization) collect sales taxes on all sales made to CA residents. CA law does not apply to internet sales they make to residents of other states.

[CathyM]

Dang.

This might be it:

Use tax: retailer engaged in business.

AB 155 Assembly Bill - Status

Discussed today:

Agenda | Senate Appropriations Committee

[AffiliateHound]

Thanks Cathy.

In reading the legislative analysis, is sounds like they are removing the nexus requirement and will be applying the taxing requirement on what they call a "controlled group of corporations":

"AB 155 would repeal the expanded nexus provisions of ABx1 28, and only re-enact the "controlled group of corporations" nexus for purposes of defining a retailer engaged in business in this state that is required to collect and remit use taxes from California consumers. Thus, AB 155 would chapter out provisions that establish an "affiliate" and "long-arm" nexus."

In ABx1 28, there are separate sections applying the taxing requirement on merchants who have Ca-based Affiliates ("Any 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 of tangible personal property, 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 $10,000 during the preceding four calendar quarterly periods.") and to retailers that have a Nexus to the state ("Any retailer that has substantial nexus in this state for purposes of the commerce clause of the United States Constitution, and any retailer upon whom federal law permits the state to impose a use tax collection duty.")

On one hand it sounds like a change in terminology only, but on the other, the legislative analysis says that the effect of the bill would be a loss of over $100 M in sales tax revenue projected under SBx1 28.

Really confusing.

Hopefully, more analysis will be forthcoming.

[CathyM]

It sounds like it does repeal the expanded definition of nexus, which takes affiliates out of the picture from being scapegoats. That sounds like it could be good for us.

I don't know what the controlled group of corporations is but assume it is an attempt to define amazon as a corporation that must collect taxes.

The revenue numbers are all bogus anyway but they are probably saying that less corporations will be required to collect taxes. Of course amazon is not collecting taxes anyway so it seems that the revenue numbers are meaningless.

[CathyM]

Here's info on the clause about Controlled Group of Corporations:

ttp://law.onecle.com/california/taxation/25105.html

As I recall, they were going after amazon because they have a company in California that makes the Kindle. This article describes it:

California targets Kindle lab in Amazon tax spat | Privacy Inc. - CNET News

[AffiliateHound]

Seems possible that the new bill would remove affiliates from the equation, as Controlled Group definitions all come down to common ownership rather than any type of arms-length referral set up.

However, getting a 2/3 vote will be extremely difficult.

Bottom line regarding the referendum is that this bill might actually accomplish the purpose of the referendum, and thus it is not at all taking "away the people's vote".

On a related note, the bill to make it illegal to pay signature gathers per signature was passed by the legislature and vetoed by Gov. Brown.

[theslacker]

I'll admit that I'm confused by the details of the politics. It just didn't sound like a good thing. I'm definitely interested in seeing more analysis on what this would do and how it would affect affiliates if at all.

[Chuck Hamrick]

Moved to the California Affiliate Tax forum.

[CFW]

Has anyone found the actual text of the amended bill ab155? The only version I found was written back in May.

Also, does anyone know when it's scheduled for the next vote? Thanks!

[AffiliateHound]

***********IMPORTANT************

The latest official analysis of SB155 makes it CLEAR that this bill will REMOVE the recently enacted Affiliate Nexus provisions of ABx1 28 ending the requirement that out of state merchants collect sales taxes if they have California based affiliates.

CA Affiliates - contact your state legislators to support SB155!!!!!!!

This bill will require bipartisan support to pass.

[CFW]

Stupid question:

This text in the last paragraph in the ab155 analysis makes it sound to me that it will keep the affiliate nexus parts. Am I mistaken?

AS PROPOSED TO BE AMENDED this bill would repeal and re-enact all of the provisions of ABx1 28, add an urgency clause, and increase the small business exemption from $500,000 to $1 million.

Earlier in the analysis, it sounds like the affiliate nexus would be repealed, but at the end it makes it sounds like the opposite. I'm confused.

[AffiliateHound]

Originally Posted by CFW

Stupid question:

This text in the last paragraph in the ab155 analysis makes it sound to me that it will keep the affiliate nexus parts. Am I mistaken?



Earlier in the analysis, it sounds like the affiliate nexus would be repealed, but at the end it makes it sounds like the opposite. I'm confused.

I kbow that is confusing, but this is the key section of the analysis:

"AB 155 would repeal the expanded nexus provisions of ABx1 28,
and only re-enact the "controlled group of corporations" nexus
for purposes of defining a retailer engaged in business in this
state that is required to collect and remit use taxes from
California consumers. Thus, AB 155 would chapter out provisions
that establish an "affiliate" and "long-arm" nexus."

[CFW]

Yeah, the summary in the analysis says the same. You must be right.

Can't they just write this stuff in plain English?

[AffiliateHound]

Originally Posted by CFW

Can't they just write this stuff in plain English?

[CFW]

I've been re-reading ab155, along with previous versions & previous analyses.

I think the proposed amendments would include the affiliate nexus clause. Here's why:

The most current bill summary says there is a "problem" with ab155 as it was before the amendments:

[ab155] would chapter out recently-enacted provisions that established an "affiliate" and "long-arm" nexus for purposes of use tax collections.

Here is the full quote (emphasis added to show the "problem"):

AB 155 would enact a "controlled group of corporations" nexus to determine whether out-of-state retailers must collect and remit the use tax on sales to California consumers. In doing so, this bill would chapter out recently-enacted provisions that established an "affiliate" and "long-arm" nexus for purposes of use tax collections. Proposed amendments would address this problem (see below).

When you see below, you find the last paragraph:

AS PROPOSED TO BE AMENDED this bill would repeal and re-enact all of the provisions of ABx1 28, add an urgency clause, and increase the small business exemption from $500,000 to $1 million. Staff notes that BOE does not track micro-level data on affiliates that may be subject to the exemption, so the fiscal impact related to increasing the threshold in indeterminable.

Now, why would our fearless leaders repeal the affiliate nexus clause? Not out of their concern for affiliates, that's for sure. The "problem" from their point of view is that ab155 chapters out the affiliate nexus. The amendment "solves" this "problem". That's how I read it.

Hound, I hope you're right, and I fully want you to be, but I have my doubts. I do hope we can get a straight answer one way or another.

Sorry for the back and forth.

[AffiliateHound]

A key might be in the definition of "controlled group of corporations" which only includes entities that have some form of common ownership, and does not include the affiliate relationship.

On Monday, I will try to speak with my State Senator's District Director, with whom I've spoken about this before. If he is here and not in Sacramento with the Senator, he may have some answers.

[CathyM]

I think the staff used the wrong terminology in this quote:

Staff notes that BOE does not track micro-level data on affiliates that may be subject to the exemption, so the fiscal impact related to increasing the threshold in indeterminable

.

The threshold applies to merchants not affiliates.

My guess.

[CFW]

Hound, if you could check with your district director and let us know what he says that would be awesome. Hopefully that'll shed some light on this. I'll try to do the same (even though I've never talked to them before).

[markwelch]

Someone pointed me to this discussion, and I'm concerned enough to respond here, because it appears that some California legislators are creating a "smoke screen" intended to discourage people from signing the referendum.

It also appears that you're talking about two different bills, and speculating that favorable language from one bill will be included in the other, despite contrary information.

First, there is a news article which says that State Senator Loni Hancock has "amended" a bill, which the article says would now, if enacted, repeal and re-enact the same law as an urgency measure, to block the referendum process. The only change seems to be raising the sales-volume requirement (which is part of the "affiliate nexus" language) from $500,000 to $1,000,000. The news articles don't mention a bill number, and I can't find any information about an actual bill on the California legislature's service, or on Hancock's web site.

Second, someone quoted from a legislative analysis dated August 25, regarding an older bill, AB155, sponsored by Assemblymember Calderon, which has not been amended since May 2, and which is not an "urgency" bill.

Suggesting that Ms. Hancock might have amended one of her Senate bills to adopt the language from AB 155 is just speculation; it seems much more likely that her bill would retain the "affiliate nexus" provisions, amending only the dollar amount (which wouldn't need to be amended if the entire "affiliate nexus" language was removed).

Finally, even if the legislature sought to do exactly what we hope (actually repeal the "advertising nexus" provisions, leaving only corporate-control provisions which would likely apply only to Amazon and perhaps a few other companies), it's still quite unlikely that enough Republican legislators would vote for the amended tax bill to meet the two-thirds vote requirement.

As I've mentioned in earlier discussion threads here, although I believe the "advertising nexus" law is unwise, ineffective, and unconstitutional, I don't support Amazon's referendum effort; but I also detest misinformation and "smoke screens" intended to confuse voters.

[AffiliateHound]

Originally Posted by AffiliateHound

On Monday, I will try to speak with my State Senator's District Director, with whom I've spoken about this before. If he is here and not in Sacramento with the Senator, he may have some answers.

I spoke to him this morning and he was not familiar with the bill. He said he would find out and get back to me today.

[CFW]

Found this on Americans for Tax Reform, posted today: they say the bill is AB155

Americans for Tax Reform :: California Tries to Re-enact Internet Tax and Circumvent Voters

The latest exhibit of this unfortunate fact is Assembly Bill 155, legislation that, if Democrat lawmakers have their way, would “gut-and-amend” an existing bill to re-enact a sales tax on out-of-state and online purchases signed into law by Gov. Jerry Brown in June. The end goal of this legislation, pushed by the often misguided and incorrect Sen. Loni Hancock, is simply to block California voters from deciding the fate of the controversial online sales tax on the ballot.

Also mentioned here, saying the bill would need 2 Republican votes in the assembly & senate: http://www.fresnobee.com/2011/08/26/2512082/democrats-craft-bill-to-halt-amazon.html

Now, why can't we find the text of the amended version? Why is the legislature taking so long to publish it? I can't find it on leginfo.ca.gov. If anyone knows where it is, that would be great. Thanks!

[AffiliateHound]

Well, my friend at the Senator's office just called me back, and it is as bad as it can be:

AB155 will repeal ABx1 28 and re-establish the ENTIRE law as an urgency measure, thus prohibiting a Referendum to overturn the law.

AB155 could come up for a vote in the Senate as early as today, or anytime in the next two weeks.

Contact your state senator and tell them NO!

[CFW]

Thanks for the update.

I got an email from getbackinbusiness.org saying you can send a (pre-written) letter to your state senator, assembly member, & the governor. You're able to change the text as you wish.

You can find it here:

Take Action » getbackinbusiness.org