California Governor Jerry Brown signed a bill into law Wednesday requiring online businesses to collect state sales tax, calling it “a common sense idea,” but Amazon and other large online retailers said they no longer see the business sense in staying in the Golden State.
Amazon and Overstock.com both announced shortly after the bill was signed that they will be closing all of their affiliate programs in California. Affiliates are small websites and businesses that sell products through sites like Amazon and receive a small commission.
The new law requires online retailers with local affiliates to collect and file state sales tax on purchases made by California customers. California hopes to raise an estimated $317 million a year in new state and local government revenue through the added sales tax collections.