Folks watching the news are already familiar with the recent kerfuffle involving Amazon, Governor Jerry Brown and The Affiliates Program, but sitting silent in the sidecar are other potential victims: Kindle Store writers/sellers based in California, Colorado, Connecticut and Illinois. Watching the affiliates crash and burn in the war for the Internet, Kindle writers in the subsequent ‘dark’ states nervously await announcement emails, urging them to relocate their company headquarters, or face their publisher accounts being shut down.

A nagging fear of such a thing happening has been brewing in the back of my mind ever since we first began selling eBooks some four years ago; my husband and I were just counting the days until someone began seriously attacking the last bastion of free commerce left on the planet. I am glad Amazon’s making a partial stand here in California, threatening to talk about going to the courts–which is mostly due to the enormous population/number of affiliates from which they draw percentages–but if such a legal fight occurred it would most likely take some time and millions in legal fees.

The ‘why’ of Jerry Browns actions is absurd, not in its premise, per say (after all taxation without real representation has become the norm) but in the after-affects and subsequent workarounds that will almost certainly ensue. For instance, several affiliates on my various contact lists are filing for corporations out of state, states which are happy to accommodate formerly California-based businesses with lower fees and taxes, incentives and coupons for free services. I must admit that such a step sounds like the next inevitable step in the evolution of online business, if indeed eBooks sales are the next on the target list. Selling self-published eBooks is already tough enough without reducing prices further to accommodate the state’s greed and somehow keep the interest of consumers. PayPal sales of our books to California residents make up the smallest piece of our Sales Pie, just because of the tax that is automatically tacked on, however, consumers work around this by having their out of state friends buy our books and then ‘gift’ it back to them in a clever sort of eBarter system. If the new laws expand to eBooks, these practices will only increase, along with more and more small tax-paying businesses like ours eventually leaving the state.

As California natives, my husband and I pay taxes daily and at the end of each fiscal year; we even include all eBook sales in our income, and we are not ‘unconcerned’ about the state of our state’s finances. Instead of illogically hampering business on the internet (the same consumer-driven sales which seem to be helping pull the nation out of recession) California could simply decrease the enormous salaries that many top-level officials already receive. That one thing would make en enormous dent in the state deficit, and just maybe the government will leave eCommerce alone.

Not likely I know, but one can hope while one waits for the corporation-filing papers to download.

Via Greene Ink

4 COMMENTS

  1. First of all, most states with sales taxes already require that taxes be paid on goods bought from Amazon–but the tax reporting is supposed to be done by consumers rather than the vendor. Obviously people don’t often report these taxes, but that doesn’t mean they aren’t due. Asking Amazon to collect taxes on these sales doesn’t seem unreasonable to me. Why should Amazon have a competitive advantage over Barnes and Noble, for example, simply because they don’t have shops in the state. Second, supplier location has nothing to do with taxes so I don’t think Kindle publishers have to worry about anything–I’m sure your concerns are sincere but they seem unreasonable to me. While we may disagree about whether tax levels are high enough or too high, I have a hard time understanding a position that some companies should pay more taxes than others on an otherwise identical sale. As a California resident and long-time Amazon affiliate, I am sorry that this happened. I understand Amazon’s position and I’m sure it’s good business for them to end the affiliate program if it would result in them being taxed but I see this as a loophole.

  2. Other people’s commerce can be taxed, but not MINE. The Holy Gospel of GIMMIE, GIMMIE, GIMMIE. Let ambulance services fall apart and raw sewage run in the streets as long as MY income isn’t diminished.

  3. I believe that the “the last bastion of free commerce left on the planet” is actually the night market in Chiang Mai, Thailand. I too enjoyed the temporary fun of not paying taxes, and, as a vendor, not having to bother about collecting and reporting them. But I hate to see what’s happening in America because taxes of all types are inequitably applied and carelessly collected. When you step back to the day Internet commerce was introduced, the failure to collect sales tax was just the cheerful result of a loophole in the then-current laws, not a radical statement for the freedom of the individual. Yes, we can understand why Amazon would fight this. And we might be forgiven for also thinking them churlish and self-serving.

  4. “The ‘why’ of Jerry Browns actions is absurd, not in its premise, per say (after all taxation without real representation has become the norm) but in the after-affects…” Okay, this is ridiculous. Error in possessive (“Browns”); error in use of legal term (“per say”); effects/affects confusion (“after-affects”). Who wrote this? A third-grader?

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