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There are two different threads at WebmasterWorld that show publishers, advertisers and affiliate's concern over a new proposed tax law in California.
The law, as understood in the thread, would potentially tax any seller who using AdWords to market their product or service. Moderator, incrediBILL, explained:
The conclusion I drew after reading the law is that since AdSense directly refers customers via links, as do the AdWords ads showing in the SERPs, it's therefore theoretically possible that anyone using Google as an advertising vehicle could be subject to CA tax.If people advertising in Google are suddenly subject to collecting and paying CA tax then people will most likely stop advertising on Google.
You can see the details about this tax proposal named AB178 and the hearing won't be until April 13, 2009.
Some are very skeptical over the bill and they are not worried too much about how it might impact them.
Forum discussion at WebmasterWorld.
Update: 5 Star Affiliate Blog has very good coverage of this concern. Well worth a read.
Comments:
Brandon
03/23/2009 01:18 pm
I wondered the same thing too , this could potentially cause a VERY large problem with many businesses that use services based in California. A Extra few % on adwords/adsense might make it more profitable to try another company. Of course, this could potentially hurt CA Business.
Daniel Dessinger
03/23/2009 03:51 pm
Anyone using Google AdWords or AdSense could be subject to California taxes? Seriously? How would they even enforce such a law to global users? Just start mailing out tax statements?
5starAffiliatePrograms
03/23/2009 04:20 pm
"Anyone using Google AdWords or AdSense could be subject to California taxes? Seriously? How would they even enforce such a law to global users? Just start mailing out tax statements?" No - if an advertiser sells more than 10,000 to CA residents via links on websites in CA,(adsense or affiliates) then the merchant has to start collecting and paying sales tax on ALL CA sales. (Think Amazon) I have extensive coverage of all the sales tax issues on my blog. HI, MN, CT, TN all have similar bills on the books and HI and MN go to congressional hearings this week, so are even further ahead in the process than CA which goes to hearing April 13th. Anyone in CA that wants to fight this - we have a major coalition/lobbying effort organized and need your help. Visit the PMA website. performancemarketingalliance.com. This new affiliate marketing association is leading the fight. Linda Buquet
Barry Schwartz
03/23/2009 04:24 pm
Thanks Linda, I updated my post linking to yours.
James Matthews
03/23/2009 06:21 pm
Google will lobby against this! It is very important for them to make money now. This will drive a lot of money away from them and people won't use them for adsense.
gabs
03/23/2009 06:53 pm
ok I have adwords BUT I deal with Ireland so why not just Reg your account with them ? This is the google european office and the company I PAY The Google AdWords team Google Ireland Ltd. Gordon House, Barrow Street Dublin 4, Ireland Registered in Dublin, Ireland | Registration Number: 368047