The Sacramento Bee published an article describing Amazon’s new offer to California’s Governor Brown and the Legislature. Amazon is apparently offering to spend tens of millions of dollars on new distribution centers in California and hire 7,000 people in exchange for the state delaying until 2014 a law requiring out of state retailers to collect sales tax for the state.
The law could mean that Amazon has to collect $200 million in sales taxes for the state. But the status of the law is uncertain. Amazon refuses to collect the sales tax.
As a result of the new law, Amazon terminated business relationships with 25,000 small businesses based in California to protect itself from having to to collect the sales tax. This has cost the state lots of jobs and lost income taxes as well.
My time with Steve Jobs happened a very long time ago. It was early 1980, or perhaps late 1979, and I was a freshman at Stanford. I heard that Steve Jobs was coming to talk to some students in a small group session. I don’t actually recall why it caught my attention. I had probably heard of Apple computers back then, but I had never seen one. The only computers I had ever seen where in huge boxes behind thick glass windows.
Somehow, I decided to go to the event. It was over in Branner Hall across the street from my dorm complex, Wilbur. We met in a big room. It was kind of dark and had a fireplace. I did a quick search on Branner and found a picture of the room.
We all settled in with Jobs sitting down at the head of our circle. He was a young guy. Full of energy. I listened with great interest to what he had to say. The thing I remember was his vision of what computers would look like in our future and his excitement about the day his vision would come true.
I was recently invited to sign up for Spotify, an online music service that has been big in Europe for a number of years and is just now coming to America.
So, I signed up. Pretty easy to do. Then, I was somewhat surprised that Spotify is a downloadable application that runs on your computer. I downloaded it, ran the install and fired it up.
Within seconds it was up and running, importing all my music from my iTunes folder. It got everything, except the files Apple DRMed into prison.
The application seems much lighter and faster than iTunes, which is a welcome change. It looks sexy, with a grey/black background and white font.
Amazon filed a petition with the California Attorney General to suspend the law recently passed by the State Legislature that attempts force out of state retailers with affiliates in state to collect sales tax. The petition was approved by the Attorney General and Amazon can now go on to collect signatures to try and get it on the ballet.
I tried reading the petition, but it’s a bunch of legal mumbo jumbo to me. The Attorney Generals title and summary are as follows:
The new job killiing California law that claims that affiliates (independent businesses that advertise products on a pay for performance basis) create sales tax nexus for out of state retailers and therefore subjects them to collecting sales tax, continues to claim victims.
While the focus has been on Amazon, more companies are terminating their relationships with 25,000 small businesses here in California. The law is intentionally vague and given that there are networks and sub-networks of affiliates it is very difficult for a company to see if their relationships with advertising networks or affiliates causes the nexus to kick in.
To avoid the risk, out of state retailers are choosing to do the simplest thing and that is to fire their California small business affiliates. That means less revenue for small businesses, more people getting fired and less income tax collected by the State. And, no extra sales tax to compensate. Way to go Sacramento.
Click below to see the most recent termination letter I have seen:
Jobs are being lost at 25,000 small businesses in California today due to a new law passed by the California Legislature. The new legislation is part of the budget package recently approved by the California Assembly and Senate. The legislation is an attempt to get Amazon to collect sales taxes by claiming that independent affiliates who choose to promote Amazon on a pay for performance basis create nexus for Amazon.
The Supreme Court has ruled that it is unconstitutional for States to force out-of-state retails to collect sales tax. California is trying to bypass this rule by claiming independent companies create a nexus for Amazon.
My condolences to all who have lost a job or a livelihood today.
Click below to see a copy of the letter being sent to Amazon’s California Affiliates:
I just read about Google’s new Music Beta which seems to be their response to Amazon’s recent announcement of Cloud Drive. I downloaded the app on my Droid phone, but all I got was some random podcast I had on my phone. So I next went to the Music Beta site to get that set up, but all I could do was request an invitation to join. Just like everyone else, I’m waiting to see how good it is. If you want more details right now, Engadget has a nice comparison chart of the two services. In the mean time, here’s Google’s video showing off what it looks like.
Amazon introduced a new service called Cloud Drive. Cloud Drive acts as a personal cloud based server. That means you store your music, videos, documents on the web and listen to/watch/use it via downloads/streaming. You get 5 GB of storage for free and can buy more if you need it.
To quote Amazon:
Amazon Cloud Drive is your hard drive in the cloud. Store your music, videos, photos, and documents on Amazon’s secure servers. All you need is a web browser to upload, download, and access your files from any computer.
Seems like the Droid Content war has begun…
Amazon is giving away free holiday song mp3s everyday until Christmas. They have already release 12 mp3s and have 13 more to go. Go ahead and get your Free Holiday MP3s.