Rep. Nancy Skinner pushed legislation to tax online sales that was approved in 2009 as part of the state budget. Gov. Arnold Schwarznegger vetoed the legislation. On 19 January 2011 Skinner introduced similar legislation in the form of AB153. The bill requires out-of-state online sellers with affiliates in California to collect sales tax on purchases made by state residents. The affiliate provision was included to ensure that only sellers with a California nexus are taxed, as required by federal law. “This legislation will close the current loophole in tax law which has allowed out-of-state companies to avoid collecting California sales and use tax,” stated Skinner. Skinner estimated that AB153 could produce between $250 million and $500 million per year in new revenue. She and other supporters of the bill believe that the election of Jerry Brown to the governorship and support from retailers such as Barnes & Noble will help the measure become law.
In 2011 Amazon threatened to terminate roughly 10,000 of its affiliates located in California if legislation pending in the state legislature to deem such affiliates as constituting a nexus that requires the collection of sales tax is passed. California affiliates would no longer receive commissions on referrals to Amazon.[86
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