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California Associates Affiliate Program

No More Amazon Revenue for California Residents!

In an email sent this afternoon to Californians participating in the famous eCommerce company Amazon.com, Inc. (NASDAQ: AMZN) affiliate program, the company said, “California residents will no longer receive advertising fees for sales referred to Amazon.com , Endless.com , MYHABIT.COM or SmallParts.com“. This decision was made Due to a sales tax measure recently passed in CA state legislature and on its way to be signed by Governor Jerry Brown.

This is not the first time, Amazon has actually terminated the associates program in Hawaii, Connecticut, Illinois,  and North Carolina because of the passing of similar legal issues.

Amazon May Terminate All California Associates Affiliate Program

Below are more details from the email I’ve received today:

“For well over a decade, the Amazon Associates Program has worked with thousands of California residents. Unfortunately, a potential new law that may be signed by Governor Brown compels us to terminate this program for California-based participants. It specifically imposes the collection of taxes from consumers on sales by online retailers – including but not limited to those referred by California-based marketing affiliates like you – even if those retailers have no physical presence in the state.

We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.

As a result, we will terminate contracts with all California residents that are participants in the Amazon Associates Program as of the date (if any) that the California law becomes effective. We will send a follow-up notice to you confirming the termination date if the California law is enacted. In the event that the California law does not become effective before September 30, 2011, we withdraw this notice. As of the termination date, California residents will no longer receive advertising fees for sales referred to Amazon.com , Endless.com , MYHABIT.COM or SmallParts.com . Please be assured that all qualifying advertising fees earned on or before the termination date will be processed and paid in full in accordance with the regular payment schedule.

You are receiving this email because our records indicate that you are a resident of California. If you are not currently a resident of California, or if you are relocating to another state in the near future, you can manage the details of your Associates account here . And if you relocate to another state in the near future please contact us for reinstatement into the Amazon Associates Program.
To avoid confusion, we would like to clarify that this development will only impact our ability to offer the Associates Program to California residents and will not affect their ability to purchase from Amazon.com , Endless.com , MYHABIT.COM or SmallParts.com .

We have enjoyed working with you and other California-based participants in the Amazon Associates Program and, if this situation is rectified, would very much welcome the opportunity to re-open our Associates Program to California residents. We are also working on alternative ways to help California residents monetize their websites and we will be sure to contact you when these become available.

Regards,
The Amazon Associates Team

What a bummer!

A network engineer and a security specialist with a BSc degree in Computer Engineering, MS in Computer Networks, MBA in International Business and MS in Global Management. A member of the National Political Science Honor Society and The International Honor Society for Collegiate Schools of Business. Seinfeld, That '70s Show, Monk and Lost are my favorite TV shows, and Back to the Future, 12 Monkeys and Crash are my favorite movies. I however enjoy activities like biking, golfing and reading, but I spend most of my time behind a computer screen.

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{ 22 comments… add one }

  • Richard August 6, 2011, 12:20 am

    Yes, I got the exact same email and have written a couple of posts about the issue as well. Frankly, I’m disappointed in Amazon for their reaction. My understanding is that they do collect sales tax in some states, but are doing what they can to avoid it to maintain their competitive advantage.
    Richard recently posted..Network Marketing: The Good, The Bad, and the UglyMy Profile

  • jezza101 July 6, 2011, 6:17 am

    Wow, astonishing! Any big ecommerce sites making siginificant money from Amazon are going to be really messed about.

    Glad I’m not affected – I’ve built several sites entirely around Amazon Associates. As some have said above, makes you think about diversifying…
    jezza101 recently posted..Automatically Show the Latest Products and Up to Date Prices from Amazon on WordPress PostsMy Profile

  • Nishadha July 4, 2011, 8:46 am

    one of the rare occasions that I’m actually happy that I’m living outside USA. But as it has being mentioned in the mail this will have very little effect on the tax revenues, but will surely lead to loss of jobs. Anyway I personally feel Amazon affiliate network is a poor choice because they have very low referral fees.
    Nishadha recently posted..Twitter Follower Software to Add Followers AutomaticallyMy Profile

  • Michael Aulia July 3, 2011, 7:45 pm

    Wow..that sucks! Amazon Affiliates is my second biggest income earners on my blog.. would hate to see it go :(
    Michael Aulia recently posted..Goodbye Google Panda, I’m a sad Panda no more!My Profile

  • Usman Shahid July 3, 2011, 11:32 am

    It will be a ridiculous move. I am a freelance writer and I have a few clients in California and they depend heavily on Amazon.com affiliate programs. Why would government want to do it when people hardly find any jobs?

  • Patricia July 2, 2011, 10:22 am

    Maybe those of us outside USA will eventually be the only ones who are Amazon affiliates! Feel for those who depend on this as their main income stream.

    Salutary lesson for all of us to not put all our eggs in one basket and make sure we have other income as don’t know when companies will pull the plug on affiliate programs!

    Patricia Perth Australia
    Patricia recently posted..In A Spot of Bother? Lavender Could Be The Answer!My Profile

    • Mohamed Osam July 4, 2011, 9:59 pm

      Good point there Patricia, this blog is an example of the kind risk some bloggers may be exposed to when they depend on only one revenue stream source. “Never put all your eggs in one basket”!

  • Gina Jennings July 1, 2011, 6:38 pm

    It’s only a matter of time when all 50 states decide to follow suit. It doesn’t just affect Amazon. Overstock and other affiliate programs are affected to.
    Gina Jennings recently posted..Make Money Shortening Your URL LinksMy Profile

    • Mohamed Osam July 4, 2011, 10:01 pm

      Many other companies moved out of the States just because of similar tax decisions. The state in a very bad financial situation as is, taking jobs out of the state can only make the situation worse!

  • Morgan June 30, 2011, 4:05 pm

    That is ridiculous. Of course it doesn’t hurt Amazon, it just hurts the people in Cali who want to take part in associates and now can’t. Bummer indeed! =(

    • Mohamed Osam July 4, 2011, 10:05 pm

      Morgan,

      It does hurt Amazon, not as much as those who’ll lose their jobs in CA though. I would do the same as what Amazon did if I were a business owner, it is just becoming ridiculously expensive to run business in here, especially in the Silicon Valley.

      The amazing part is that the state doesn’t seem to care, this has been going on for sometime now, even during Schwarzenegger (Republican) time.

  • Lorna Li June 30, 2011, 3:06 pm

    I am SO ANNOYED! I’ve been in the throes of a website redesign to incorporate Amazon Affiliate marketing. Does anyone know if there is a way to get around it? What about registering a Delaware business and using that as your address?

    Jerry Brown, you suck.
    Lorna Li recently posted..10 Stupid Business Ideas That Made MillionsMy Profile

    • Mohamed Osam July 4, 2011, 10:07 pm

      Unless you have a secondary house/business/address in another state, there is no right way around it.

  • Matt Poc June 30, 2011, 2:19 am

    It’s one of these very rare times that I am happy that I live in Europe and not U.S.A.

    However, I don’t really make money from Amazon, but I was thinking about setting up a few sites that would promote some stuff from Amazon.

    Matt Poc
    Matt Poc recently posted..Jason Fladlien – Jason Fladlien ProductsMy Profile

  • Justin Germino June 30, 2011, 1:47 am

    Just as my Amazon income is growing I am concerned that it will be taken away if Arizona starts even talking about these same methods to try and double tax us affiliates.
    Justin Germino recently posted..Google+ Services to Change How We ShareMy Profile

    • Mohamed Osam July 4, 2011, 10:10 pm

      I highly doubt AZ would follow suit, you are talking about two completely different political ideologies here; with the current economy however, everything is possible!

  • Ryan Biddulph June 29, 2011, 11:11 pm

    Hi Mohamed,

    This is another reminder not to get too attached to any one stream of income.

    Have a few channels open and be ready to embrace new opportunities immediately because we live in a dynamic world where possibilities cease to exist and open up quickly.

    Thanks for sharing.

    Ryan
    Ryan Biddulph recently posted..Why You Are Programmed to Be Broke and How to Change the CodeMy Profile

    • Hesham June 30, 2011, 12:27 am

      Ryan, this is exactly what I was thinking today after reading this post! Never count on one affiliate network, enter from several doors!

      P.S. Thanks for the SU buddy, that was awesome :)

    • Mohamed Osam July 4, 2011, 10:18 pm

      Ryan,

      True, not only from the affiliate side, but also from a product perspective as well. There is actually another blog I may publish soon, taking about this particular issue. Your blog or online business should be as versatile and diversified as possible to minimize your risks.

  • James Spinosa June 29, 2011, 8:04 pm

    When Amazon took a stand in NY and eventually decided to pay sales tax rather than lose their affiliates I assumed they would take a similar position in other states. I realize that Amazon thrives on low prices but I am a bit disappointed in them as a company.

    -Jim
    James Spinosa recently posted..SEO? Oh, I’ve heard of that before!My Profile

  • Missy June 29, 2011, 6:45 pm

    What on earth is Amazon going to do if this law gets passed in all 50 states? Are they just gonna get ride of the associates program for everyone. It makes no sense. There has to be another option.

    Ridiculous if you ask me.
    Missy recently posted..50 Fun Facts About ProbloggerMy Profile

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