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!