States seeking to punish Amazon disproportionately punish women

I never made it to Sacramento. I got as far as Fresno on the curiously empty highway before I saw a single other car or living being. Suddenly, looking over the horizon, I saw a whole motorcade of big blue and yellow Hummers, southbound in my northbound lanes, blaring AC/DC’s “Highway to Hell” on truly awesome speaker systems. They had outriders on solar-powered scooters, all wearing yellow and blue. Something about it this bizarre procession seemed hideously familiar, but I couldn’t place the context. As we neared one another, I finally saw riders leaning out of the lead Hummer, their skin green-tinged and mottled, their arms groping unthinkingly in front of them. Zombies! And then I realized who they were.

Well, dear readers, I won’t keep you in suspense. The outriders were Best Buy and Wal-Mart employees, and the zombies were, of course, the California legislature. They had just passed an “Amazon tax bill” and were on their way to Los Angeles to eat brains. (I know, right? But they haven’t done one sensible thing in all the time I’ve lived here, so it’s to be expected. Seriously, check out “Cuss Free Week“, brought to you by the state that provides most of the nation’s kiddie porn and crystal meth.)

The zombie procession didn’t even seem to notice as I zoomed past them in another lane, took the next exit and got myself southbound and back to L.A. I’m now holed up in the only place I knew for sure I’d find sanctuary: a nice house in an upscale neighborhood in Calabasas that’s used as both a grow-op and a porn studio. See, it’s only a half-truth that Californian’s draconian tax and incorporation laws aren’t business-friendly: they’re very friendly as long as your business is drugs, pimping or kiddie porn production. Then, for the exorbitant cost of doing business in California, you get a sort of “don’t ask, don’t tell” policy when it comes to your, um, “bakery.” (The first season of Weeds is actually a documentary.)

But I digress. The Amazon bill: I’m not happy about it. It’s a very complex issue, and you’ll die of boredom before the zombie legislators get to you if I try to explain all the complexity of U.S. sales and use tax laws. So let me say up front: Jeff Bezos (founder of Amazon) and I are both okay with the idea of Amazon and similar companies being made to charge sales tax in all 50 states. We also agree it’ll happen eventually. The main problem is that the states are going about it in a wholly unconstitutional way. Laws like these set ugly precedents about one state’s right to interfere in the lives and works of residents in another state. Imagine something as utterly fucked up and monumentally senseless as the zombie legislature of California telling businesses in your state how to run themselves. Gah!

The other problem is that the Amazon affiliates – and affiliates of other sites affected by the bill, such as Overstock – are getting caught in the crossfire. Affiliates are people who put specially coded Amazon links on their websites (like we do here at Hathor). When people click the links, then buy anything at Amazon (or Overstock, or whatever the link goes to), the affiliate gets a little commission. Affiliates range from big companies like FatWallet.com to little bloggers like yours truly.

By now you’re wondering why I’m talking about this here. The answer is: because an awful lot of affiliates are – cue the drum roll – women. Affiliate marketing is one of the few genuine businesses you can start with a few dozen dollars. Women who are smart but lack the credentials to get fulfilling or high-paying jobs, or poor and struggling, or disabled, or just sick of relying on a job market that dumps workers as carelessly as ever a husband dumped a wife, have turned to affiliate marketing as their big opportunity.

The Wal-Mart cabal and the states like to wax on about providing jobs, but they sure don’t mind taking that away from us, do they? And for what?

A very brief lesson in US sales and use tax: states compel businesses that have a “physical presence” within their borders to collect and pay sales tax, but they can’t tell people or corporate entities from other states what to do, so they have what’s called a “use tax.” When we buy online or get meals on our trip to Crete, we’re supposed to dutifully jot down everything we didn’t pay state sales tax on, and pay it to the state later. No one does this, of course, because you can’t be caught. Use taxes have always pretty much been a greedy pipe dream for states that long for Europe style taxes with US style lack of services. Unfortunately, every now and again, states try to bring in revenue with some bullshit like forcing you to pay sales tax on your car again if you move there – that’s a car you bought in another state and paid sales tax on there while you were a citizen there. Then these laws get struck down by courts as unconstitutional, but screwed residents never get refunds. Then the states try it on again a few years later. Lather, rinse, repeat.

Instead of pursuing sales tax from Amazon in a reasonable manner, the states have gone about things in their usual grubbing way. Here’s what’s been happening with zombie legislatures in Colorado, Rhode Island, North Carolina, Illinois, Connecticut and Arkansas.

  • One state passes a bill claiming that because Amazon and similar companies have affiliates in their state, that constitutes a “physical presence”, which means these online sellers must shoulder the very expensive burden of collecting, calculating and delivering sales tax on all sales within that state, and promises its constituents millions/billions more in sales tax dollars per year (which will be coming out of the constituents’ own pockets, but let’s not focus on that, right?).
  • All the online sellers say cut off their affiliate programs in that state, and say, “What physical presence?” State legislature says, “…oh. Well, shit,” and the sales tax continues not to be charged.
  • The affiliates lose income, so the state loses income tax revenues. Some affiliates even move out of state. FatWallet did. Some affiliates may go on unemployment, which will cost the state more.
  • State makes whopping $20k a year from those few internet retailers who didn’t make like Amazon and cut off their affiliates.
  • Another state gets the idea this is brilliant and promises its constituents billions, apparently assuming Amazon won’t cut off their affiliates, even though Amazon promises them they will and has already done it elsewhere. Lather, rinse, repeat.

California is, like, number 7 or something. So far, Amazon et al have made good on their promises to cut off every state that does this. Does California seriously not think Amazon will cut them off? I am convinced that Amazon’s crunched the numbers and decided it’s cheaper to lose affiliate revenues (like you need me to remind you to shop at Amazon) than it is to charge sales tax. What are they hoping to accomplish?

It’s also worth noting that what affiliates do is considered marketing, not retailing. If Amazon puts billboards up in California, does that constitute a “physical presence?” for which they can compel Amazon to charge sales tax to all Californians? All I’m doing it referring you to Amazon. I’m not coming into your home to evangelize them. It’s a link, zombies. Get a grip.

Before you think, “Well, California’s stupid like that” or “Damn liberals”, know that these proposals are being evangelized by Republicans in super-business-friendly states like Tennessee and Texas, too. Wal-Mart, Best Buy and other big retailers are behind this push for sales tax, and my guess is they’re just going to keep greasing palms until they buy enough politicians to get what they want (at least, I’ve never seen anything that looked more like someone buying politicians, as many as required, no matter the cost – and if anybody could do that, Wal-Mart could). And as far as I can tell, what the Wal-Mart cabal hopes to accomplish is: killing affiliate income [ETA: this seems to be Amazon’s conclusion, too – see link], thus reducing state income tax revenues, increasing unemployment… could it be they’re dissatisfied with the number of people willing to work for minimum wage and unpaid overtime and risk getting trampled to death by stampeding cowsumers? Nah, not in this economy.

While I’m very much against letting greedy states fix the problems they’ve created by exceeding their Constitutional bounds, I actually do feel it’s an antiquated idea that we shouldn’t just pay sales tax on everything. It came from a time when crossing state lines or ordering by mail was a lot more difficult than it is now. The proposal Bezos favors involves states agreeing to a Constitutional simplified sales tax structure which companies can easily and affordably keep up with. Get that together, and affiliate marketing can return to everyone.

In the meantime, it’s okay. No problem. As usual – unless Jerry Brown comes through and vetoes the bill – women, poor people and small business can just go fuck themselves until brain trusts like Charles “If you oppose this bill, you support tax evasion and are anti-business and are not listening to your constituents” Calderon stop pimping themselves to the highest bidder… wait, no, that’ll never happen. Guess that’s why nothing ever improved in history without bloodshed.

Well. I’m safe for now. The people at the grow op have been really nice and laid back so far, and promised I can stay as long as I need to. The wifi’s working, and they’re all stocked up on food items that, um, fell off the back of a truck (doubt they paid their use tax). And I can relax, knowing the zombie California legislators will never come after these guys.

But in a couple of days, I’ll move on. I can’t just sit here enjoying my good fortune while the zombies are out doing hell knows what. I’m gonna need firearms, and I’m stuck in the very worst state for attempting to exercise my second amendment rights.

ETA: Welcome to Blog Like It’s the Apocalypse 2011! :D

Comments

  1. sbg says

    Okay, I skimmed this article. I just don’t have reliable enough internet access right now to make it through reading every word. As I type, I hear them outside, trying to get in. I think…they want to eat me.

    But this whole thing sounds lose/lose/lose to me. Amazon loses affiliates (don’t worry, I am not saying this will hurt them the same way it will the affiliates), the affiliates lose a source of income and the state? The state will lose the tax dollars those affiliated businesses would have earned and spent in their state. I … am not sure how much of an impact the state tax will genuinely have for them – and more to the point, how terrifying is it that they are so desperate for it they are concocting half-thought-out schemes for a quick fix instead of reasoning it through a bit better, taking a little more time?

    Speaking of more time, I’m out. It took me three tries to get this far. Something is disrupting the sign…

  2. Gabriella says

    Perth’s TV connection is patchy, so is our wifi, and my sister hasn’t come home yet.

    Of Course, this can be explained by bad weather, us being at the end of the mounth and our other sister needing a lot of TLC, but still, I like to blame the Califormnia zombies if I like

  3. Maria says

    I’m glad you got food and seem to be okay. Stay off the highways — there are… HUNTERS… there.

    We’re living in a batshit world when the dead walk, the state is acting like a corporation, and small business owners are suddenly the villain.

  4. says

    sbg,

    Be careful, SBG. Yes, it IS a lose/lose/lose except for Walmart, Target, Best Buy, etc. I can’t figure out a financial reason they want to destroy other companies’ affiliate programs (it’s not like that revenue will automatically go to them, or necessarily even hurt Amazon/Overstock/other biggies much at all), but that’s all they’re accomplishing, and they seem to be buying people right and left to do it, so… could it be they’re just stupid? Certainly. If they’re just out to hurt Amazon, then that’s a predatory practice, and I hope they run into the same DoJ Bill Gates had to deal with.

    Gabriella,

    I’m not sure it’s JUST zombie legislators, though. I think SBG, Maria and Revena (anyone heard from Revena) are facing different monsters/scenarios, but we don’t have enough information.

    Maria,

    Oh, I AM staying off the highway, which kind of limits me a lot.
    Small business has ALWAYS been the villain. That’s the problem with unregulated capitalism: by its very nature, small companies will either be bought up or destroyed by larger ones, because no matter how clever or hard working you are, or what a great product you have, a small business just can’t compete with even the stupidest of megaglobalconglomercorps.

    When you regulate capitalism just enough to ensure that smart and law-abiding small businesses have a reasonable chance to make it big, it’s a great system. But there is no such thing as a “free market”, and people really need to get over that idea – or rather, a true free market would be anarchy, in which shoplifting would be a legitimate business strategy, as would shooting competitors in the face. You have to regulate SOMETHING, and that’s where you show what your real values are.

  5. I.A. Scott says

    Zombies indeed. If that’s not an attack on affiliates I don’t know what is.
    If they want sales tax so badly why don’t they increase the sales tax or even target POS (surely there are Californian banks…I know there were Boston/Massacheusetts banks when I was there…) to charge it to their citizens when they’re buying stuff. I’m sure these politicians know all about snaking out of things- do they think an out of state company is going to be different? -_-‘

    Also that Wal-Mart stampede article is completely terrifying.

  6. says

    I.A. Scott,

    It just really doesn’t make sense as anything BUT an attempt to harm the affiliate program. And I don’t quite see a financial benefit in that for chains like Wal-Mart, so I’m still not getting it. Maybe big business is even stupider than I think? If so, I’m glad I’m holed up in a safe(pot)house!

    Casey,

    Good for you, Casey! But watch yourself all the same – there seems to be a lot of global weirdness lately!

    (BTW, if anyone’s wondering, I finally heard from Revena – whatever kind of monsters she’s got near her home attacked her. She fought them off, but she got a minor injury and now has only sporadic access to the internet.)

  7. Patrick McGraw says

    I really feel for all of you. Over here we only had a brief attack by Mole People, and it turns out all they wanted was sugary breakfast cereals.

  8. sbg says

    Patrick McGraw,
    If my neighbor’s Golden Labrador weren’t trying to bust his way into my window right now, I’d totally LOL.

    /wishing she’d not been the only one in the family to have never shot a gun/

  9. says

    My family is holed up in the local Target. It was hard as hell to clear out the infected management (have you heard about the video about unions they show to new hires? geez!) but now some of my surviving neighbors and other people in the area have barricaded the glass doors. The good thing is, with the guys and gals in the electronics dept, they managed to keep the internet going. Phew!

    And I was able to finish my write up of Feed and Deadline—just in time!

  10. Maria says

    Gategrrl,

    HAHA Yeah, you should ask Gena what you should DL from the internet — she actually led a whole panel at WisCon on online survival tools — like there’s a site with diagrams of how to perform minor surgeries.

    I’m so glad you guys are okay — maybe we should all move to New Hampshire! Y’know, if the road is clear, the zombies don’t get us, the mole people sleep in the day, the feral cats find some catnip, and the CA legislature goes to harass some small business owners.

  11. says

    Patrick McGraw,

    Good for you! Glad you’re safe!

    Gategrrl,

    Target is also part of the Wal-cabal behind these Amazon bills. I’m glad you cleaned out management – Target treats their lower rung employees badly enough that I don’t doubt they’ll be on your side.

    Maria: I’m so glad you guys are okay — maybe we should all move to New Hampshire!

    It’s one of the states I’ve had my eye on. I’ve been wanting to move from California for ages, and why not go with a state that has no income tax and a more sensible attitude toward taxation overall?

  12. says

    Oh my lord, the zombie legislators included the imaginary gains they won’t get from the Amazon tax in the state budget!!!!

    http://www.bloomberg.com/news/2011-06-16/california-lawmakers-send-brown-budget-with-no-tax-extension.html

    The plan approved yesterday covers a $10 billion deficit with $4 billion siphoned from schools and children’s programs, optimistic revenue projections and the sale of state office buildings that Brown previously rejected. It calls for online retailers such as Amazon.com Inc. (AMZN) to collect $200 million in sales taxes and boosts auto registration fees by $12.

    They are diabolical.

    California, the largest U.S. borrower in the municipal bond market, has the lowest credit rating for any state from Standard & Poor’s after years of late budgets and gaping deficits.

    Maybe that’s because the California government has the scruples of an overripe plum. It’s like, if you took one of those families that absolutely loots a hotel room as they’re leaving and says, “It was complimentary – yep, the pillows, too” and bred them exclusively for 150 years… **thinks about the Old West for a second**… wait, maybe that’s exactly California’s backstory.

    On a side note, guys, I’ve sort of recruited a couple of the drug dealers and pimps I’m currently staying with, and we’re going to head out and see if we can do anything about all this weird stuff that’s going on. I’d… rather not give away where we’re going, in case the monsters can read. I’ll update you when we get there.

  13. says

    Jennifer Kesler: Oh my lord, the zombie legislators included the imaginary gains they won’t get from the Amazon tax in the state budget!!!!

    They what? Hasn’t Amazon cut off their California affiliates yet? Or did they just promise to do it and are still following up?

  14. says

    Sylvia Sybil,

    That bill was part of the state budget bill, and Jerry Brown vetoed it today, so everything is still status quo – no sales tax, affiliate program intact. Apparently, the legislature threw the budget together and included anything and everything (seriously, it sounds like three radically different political parties got to pick a few items apiece) just to come up to the right numbers, because if they didn’t turn it in by yesterday, they would have to forfeit pay until they got it done. Of course, now they have to come up with a budget he WILL sign, and Brown likes the idea of an online sales tax. I believe he’s intelligent enough to realize that these Amazon bills are NOT the way to actually get one’s hands on additional sales tax revenue, but he may yet end up signing off on a bill that provokes Amazon into cutting affiliates off after all.

  15. says

    Sylvia Sybil,

    Yes, I’ve read there are 9k affilites in California, and also read there are 25k. Even at 9k, that’s a lot of people and you just know some of them are depending on that money.

    On a side note, my little traveling group has reached its destination – Gategrrl’s Target. Looks like everybody’s safe for now, but I still think we need weapons. My new, um, friends are working on that – they know people who know people. Which is good, because it’s not like you can just break into a Walmart and grab guns – not in California. I do know of a nearby stash of archery equipment, however. Also, good aim + golf balls = more effective than you think.

  16. Maria says

    Jennifer Kesler,

    I’m so jealous you and Gategrrl get to bunk together! I found a safehouse. Well, it’s more of a safe SCHOOL. Recent changes in how schools have been designed — fewer windows, narrower doorways, more prison-like feel — make this one a good place to bunker down.

    I’d’ve hated to be a kid here, though — seeing drawings and children’s handwriting bravely sticking to the concrete is REALLY depressing.

  17. says

    Just a follow-up to this post: California went right ahead and passed the bill. Amazon went right ahead and killed the affiliate program. Amazon then petitioned to put a referendum on the ballot for the next statewide election (putting several variations of “when’s the next california election” in Google did not yield a date, so it may be the 2012 presidential primary) which would reverse the sales tax requirement and put bloggers back in business. If you live in California and like bloggers, voting to kill the sales tax requirement will help bloggers meet their expenses in bringing you free content at the expense of a lot of time and energy.

    The Wal-Cabal is strongly putting out concepts that resonate with overheated emotional fools: that Amazon put Borders out of business (no, owner K-mart and their outdated business approach did that, believe me), that Amazon is getting away with something for nothing (in fact, it’s nothing for nothing – California does nothing for Amazon, and Amazon in return does nothing for California), etc. A lot of thinking people are more legitimately confused about why anyone blames the states for this rather than Amazon. Once again, what the states want to do (get Amazon to collect sales tax) is valid. How they’re going about it (one state regulating another state’s commerce) is unconstitutional.

    So, you know, if you’re a fan of the US Constitution, that’s another thing to consider.

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