Earlier this month, I wrote about Amazon terminating its Amazon Associates program in California in wake of the Golden State passing ABX1 28, a new law that imposed use tax collection duties on certain out-of-state retailers.
Last week, Amazon upped the stakes when Charles T. Halnan, an Amazon lobbyist, submitted a proposed statewide referendum to Attorney General Kamala D. Harris regarding Section 1 of ABX1 28. That section states that retailers with an affiliate or corporate nexus with the State of California must collect use taxes from their California customers who have purchased tangible personal property.
Amazon is no stranger to tax disputes. Thus far, the typical tax claim concerning the online retail goliath involves its obligation to collect sales taxes. Several states have contended that the presence of Amazon Associates within its borders was sufficient to meet the substantial nexus mandated by the Commerce Clause in order for a state to require that a retailer collect sales taxes for purchases by residents within the state. Amazon usually “fixes” that problem by terminating its Associates in the complaining state.