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  1. #1
    ABW Ambassador CathyM's Avatar
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    I just received an email update on AB 178 and it looks like the hearing date is now 4/27/2009. No time specified.

    http://www.leginfo.ca.gov/pub/09-10/...02_status.html

  2. #2
    ABW Founder Haiko de Poel, Jr.'s Avatar
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    Admin Note: Post Split off from March 31 thread.

  3. #3
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    Interesting. This is the last hearing date before the May 1 cutoff for committee action. I assume that this will be just one of many bills to be considered at that hearing.

  4. #4
    Outsourced Program Manager kgarcia's Avatar
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    The meeting time and location are posted on the Assembly website: http://www.assembly.ca.gov/Committee%5Fhearings/

    The new hearing will be at 1:30pm on Monday, April 27th in room 126
    Karen Garcia
    [URL=http://lab6media.com]Lab6 Media[/URL]
    Are you a content creator? A serial entrepreneur? New to the space or a long time player? We'd love to work with you!
    [URL=http://lab6media.com/clients/]Explore the affiliate programs we manage![/URL]

  5. #5
    Outsourced Program Manager TrishaLyn's Avatar
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    I saw somewhere that the postponement involved some issues with amendments, so I think our fear that the bigger players like Amazon and Google have been successful in splintering themselves off from the bill.

    Which to be honest is incredibly disheartening that they can make a difference based on how much money they throw at it and the rest of the industry gets thrown under the bus. I know that's just the way it is, but still...

  6. #6
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    As discussed in another thread here on ABW, Amazon has announced that it will prohibit "direct-to-merchant PPC" effective May 1, which seems likely to be a response to the "Amazon Tax" as interpreted by the New York tax agency. It may also anticipate likely amendments to the California bill.

    I've stated many times that there is NO amendment that would address the core problem, which is that hundreds of merchants will terminate their California (and other "Amazon Tax" state) publishers (including me).

    If the California law is amended to more closely match New York's interpretation of the New York law, then a slightly smaller number of merchants would probably terminate their publishers -- but the revenue from the law would probably drop to nearly zero, since Amazon appears to be adapting its program to avoid triggering the sales-tax-collection duty. An amendment that excludes Amazon would very clearly be "revenue-negative" (more income tax would be lost than sales tax collected). And even if the bill is amended, it will still be unconstitutional.

    I certainly do expect that lobbyists for the affiliate networks (CJ & Google) will absolutely "throw us under the bus" if they can get an express exclusion so that the use of a California-resident affiliate network won't trigger the law, even if the affiliate network is paid a percentage. I'm sure they would also throw California OPM's under the bus if they could save themselves. (Ditto for eBay, which I assume would want a clear exclusion.)
    Last edited by markwelch; April 6th, 2009 at 01:36 PM.

  7. #7
    Outsourced Program Manager TrishaLyn's Avatar
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    When we were in Sac we were trying to advocate for keeping the bill as broad as possible to include these larger companies. The thought process was that it was unlikely they'd reject it and if the larger players were also effected, merchants would actually have to address the issue and redo their systems to collect CA sales tax instead of just cutting off the bad appendage of the affiliates.

  8. #8
    ABW Ambassador CathyM's Avatar
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    trishalyln and markwelch, I don't see how the amendment (which we haven't seen yet so this is speculation based on the interview with Skinner) excludes Amazon. It excludes banner advertising (and presumably text links that are not commissioned based) which gets Google and Yahoo off the hook but does include commissioned based product sales (affiliates). Amazon is very much still in that arena and I believe they will fight very hard against AB 178.

  9. #9
    Outsourced Program Manager TrishaLyn's Avatar
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    Sorry, I was reading something about Amazon when I was typing that... slip up that I can't edit. I meant Yahoo and Google.

  10. #10
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    The ultimate question is how each state interprets the law.

    Whether by amendment or interpretation, if the actual rule "as applied" is the one being applied by New York's tax agency, then I'm not certain whether Amazon would be covered, now that they've modified their terms to exclude DTM-PPC (assuming that this activity is "solicitation" and that regular affiliate links on content pages are not).

    Remember that Yahoo Store merchants pay Yahoo a percentage on product sales, for customers referred from Yahoo's own sites. And I think that Google's Affiliate Network also is paid commissions based on a percentage of sales.

    I don't think the bill would pass if it is amended in a way that clearly excludes Amazon from collecting sales tax. Let's face it, this law is aimed at Amazon.com, because Amazon.com would collect more sales tax than all other affected web merchants combined, for each state proposing this law.

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