It appears California and I have the same big stress factor right now: lack of money and fear of lack of future money. Mine stems from mounting law school debt and the current economy’s hit on law firm recruiting. California’s stems from years of over spending and a decline in tax revenue.
In one of its many attempts to avoid potential bankruptcy California is considering AB 178. According to Assemblymember Nancy Skinner (D – Berkeley)
This legislation will close the current loophole in California tax law which has allowed out-of-state companies to avoid collecting California sales and use tax
One other justification for the bill is to “level the playing field for California’s brick and mortar businesses” who must collect taxes. The bill is intended to change the definition of retailer for the purpose of sales tax revenue to include a
retailer engaging in business in this state” a retailer entering into an agreement with a resident of this state under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link or an Internet Web site or otherwise, to the retailer
As I understand it, this means that all retailers who use an affiliate program to “generate sales” will have to collect sales tax to all residents of the state. The bill’s authors assume this will raise lots of money for the state in new sales tax revenue.
Unfortunately for the state, internet retailers disagree. Amazon and other retailers are lobbying against the bill. Furthermore many retailers, including Amazon, have threatened to sever all ties with California affiliates if the law passes. However given the backlash from internet retailers it appears to mean that many affiliate programs will shut down their relations with affiliates in the state. Thus the state may receive little extra sales tax revenue. Additionally it appears state residents will lose income as they are barred from these affiliate programs (potentially resulting in a net loss for the state as it will lose the income tax it would have received on that income.)
California and I are currently stuck in the same poor position: taking steps to increase our income and potentially hurting it. (Before law school I was getting paid poorly but wasn’t in debt. After law school I will be in debt and fear that if the economy doesn’t improve will still be being paid poorly.)
In law firm economic news a recent survey by Hildebrandt International shows that while the economy appears to be improving for law firms more partner layoffs are planned. Not great news in my search for the suddenly elusive post law school job. Thankfully I still have a year to find it. Here is hoping both California and I find a solid source of income.
