California proposes taxing affiliates!

Similar to the "Nexus" law adopted by the state of New York, which resulted in major retailers terminating "click-through" agreements with New York-based websites, the State of California has proposed invoking something similar:

AB 178 AND ABX3 27 proposes invoking a "nexus" law, which refers to the US Constitution's requirement that an out-of-state retailer have a sufficient physical connection with a state before the state can force the retailer to collect the state's sales or use tax.

In other words, if you are an affiliate of a California based business, you may be taxed on your affiliate commissions very soon!

Yahoo, Google, ebay and several other companies are actively opposing this move by the Government of California, fearing massive loss to California-based businesses, as well as those sending business to them from outside the state.

A petition to the Government of California goes so far as to ask: "California lawmakers need to decide: Will California be the global leader of the Internet-marketplace or the global leader of the Internet taxation?"

Stay tuned!