Fighting the Advertising Tax in Sacramento
I wish I could tell you that we had an incredibly productive day in Sacramento, educating numerous state senators personally about affiliate marketing. They all understood what we do and they all agree that adding language to tax bills that make affiliate partners consistute nexus for out-of-state merchants is not going to make the state any money and is a bad idea.
I wish I could tell you that.
Instead, I report back after going to Sacramento last Wednesday, May 12th, with some less-than-uplifting realities about our state government here in California. Late last week, the Performance Marketing Association learned that there was a meeting on the 13th in CA senate subcommittee 5 to discuss adding affiliate nexus language to one of their pending budget bills. It’s not yet back, officially, in the form of a bill in the CA senate or assembly, but just knowing that they’re discussing it is enough for us to try to go educate some lawmakers on what affiliate marketing is, why affiliates shouldn’t create tax nexus for merchants, and why the state won’t actually make the $1.7 million they think they will.
I was asked to join Lisa Picarille and up we went to the capitol, no appointments made due to the last-minute nature of the trip, with high hopes of talking to the three state senators sitting on the subcommittee and laying some education on them. We knew that other affiliates and fighters in this advertising tax battle had previously met with Senator Denise Moreno Ducheny, the chair of the subcommittee and the state Budget and Finance committee, and had not had good luck in getting through to her, so we targeted her office first. She was booked solid in meetings, but we were given a time to check back to see if one of her staff members had a small window of time to talk.
So we went on to the office of Senator Robert Dutton, who we’d heard was on our side. We spoke with a nice staffer in his office who was very well versed on the affiliate nexus issue and assured us that Sen. Dutton opposed the language and that most the Republicans were probably on our side as well. It was very nice to meet with someone who actually knew what we were talking about and understood the issue. In the two previous times I’ve gone to Sacramento, we had uphill battles trying to explain affiliate marketing to blank-faced staffers, so his knowledge about the issue definitely allowed us to cut right to the chase. He suggested some other people we talk to, some influential to the budget committee and subcommittee, and some already on our side that might be able to help in other ways.
Lisa and I then set out for Senator Alex Padilla’s office as it wasn’t yet time to check back in to see if Sen. Ducheny’s staff could talk to us. We were unable to speak to the people Sen. Dutton’s office had recommended, but we spoke to the legislative director who was very interested in learning more and very interactive. He asked us a lot of questions to better understand the issue, and was very interested in the information about Rhode Island not realizing the projected revenue from their version of the advertising tax and their consideration of repeal. Rhode Island actually has a bill in play now, H 7071, set to repeal the “Amazon Tax” but it looks to be stalled and waiting for a proper hearing. So as not to lose time, we quickly had the information emailed to him as we went about to other offices.
That’s kind of where the magic ended. I have to say, I was feeling okay at that point that people were hearing us out. I didn’t feel that any overly appreciated us being there as private citizens just wanting to spread some education and counter some mis-information being spread by the opposition, but they seemed willing to listen and comprehend. We went to the budget committee office, and they weren’t that helpful. The person we were looking for wasn’t there, and the people who were there told us we were pretty much crazy to attempt to see anyone without an appointment at this time of year. What happened to PUBLIC SERVANTS making themselves available to the PUBLIC, hmm? This served as a harsh reality (to me anyway) that our system is generally broken. We took a break, and after refreshing ourselves with some lunch, we headed back to Sen. Ducheny’s office to check in.
We arrived earlier than the time we were asked to come back, but since we had no one else to see it was worth a shot. We were ushered into the office of a staffer who was, unarguably, the worst attitude and most combative of all the people we talked to that day. She made me very glad I do not live in Sen. Ducheny’s district (40th District). The staffer kept attacking affiliates for working with out-of-state retailers in the first place. I tried to explain to her that, California being just one of 50 states, the “Buy Californian” attitude wasn’t a viable business option, but I got the distinct impression that she didn’t care. She checked her cell phone multiple times while Lisa and I were trying to pleasantly and professional counter her unprofessional combative questions, which is just plain rude no matter what the situation is. She kept asking us what we proposed the state do instead to fix the budget. I wanted to tell her that it’s THEIR job to figure that out, not ours, but instead Lisa suggested some alternatives and tried to focus on the argument that the retailers will just drop CA affiliates, and the state won’t make this money they think they’re going to make.
That being our last meeting of the day, it did leave a bad taste in my mouth about Sacramento and state politics and government in general. I hope I can be of service throughout this fight until we’ve successfully killed the advertising tax, in all forms, here in California. Until then… anyone have a million bucks we can hire a full time lobbyist with? 🙂
Read MoreBreathe Easier, California Affiliates!
I had the pleasure and pain of driving up to Sacramento yesterday to sit in on the hearing for AB 178, which I’ve talked about before putting California affiliates in jeopardy. Lisa Picarille and I hopped into my car and made the drive up, and about 10 minutes away from our destination, we get the news that the hearing had been postponed. The bill has been changed to a two year bill. What does this mean, exactly?
Believe it or not, I couldn’t find a sufficient actual definition for what a two year bill is online, so I can only pass on what I was told in basic layman’s terms, which may be better anyway. Basically what this means is that the hearing has been postponed until January, when it will be up again to be heard in hearings. We were told by several seasoned lobbyists that if it’s not heard in January, this bill in this current incarnation will be dead. However, the issue won’t necessarily go away. We will need to keep an eye out for other bills to make sure language isn’t shoehorned into other bills that could affect affiliate livelihood and tax nexus, and we also have to pay attention in June when budgeting starts to make sure no strange budget items that could affect nexus show up.
This is a small victory and California affiliates can certainly breath easier for awhile, but it’s not over yet. We’ve won the battle but the war rages on. Of course, there’s a lot of blog coverage on the happenings of yesterday, so check out their points of view as well:
- Mr. Lewis Goes to Sacramento – David Lewis
- Calif. AB 178 on Hold for Now – Lisa Picarille
- California Hearing Postponed – that’s a good thing! – Rebecca Madigan
- No Hearing for California AB 178 – Shawn Collins
- Commission Junction’s Internet Retail Tax News
Recap of Lobby Day Against CA AB 178
Yesterday I had the privilege of accompanying 9 of my fellow affiliate marketers to the California State Capitol building in Sacramento to help lobby legislators against the passage of California Assembly Bill 178.
I have to say on a personal level, this was my first trip to the Capitol, and the most involved I’ve ever gotten with politics in general. It was a pleasant experience overall. And yes, I got a little “star struck” for lack of a better term walking by Gov. Schwarzenegger’s office. I had to fight the urge to knock on the door and demand court!
Back to business. 10 of us were able to make it up, some coming from Southern California. We had appointments set for almost all day, so we split into two groups so we wouldn’t run the risk of running late or overcrowding offices. Our group had a few lack luster meetings with staff that really didn’t understand what we were talking about or weren’t really familiar enough with the bill to care yet. But we also had some good meetings with other staff members who were incredibly receptive to our message and offered us a lot of advice regarding how to go about the lobbying that we’re doing. Some even went so far as to call other offices we didn’t already have appointments with and help to make us appointments.
It was equal parts optimistic and pessimistic. While it looks like it’s going to be incredibly difficult to outright kill the bill because of the eagerness of the state to collect any income possible. Focusing on the message that it’s best to keep the bill as broad as possible in the definition keeps it as fair as possible. In a perfect situation the Streamlined Sales Tax Project to require the collection of sales tax across every state would make the playing field as fair as possible, but that’s already been in the works for almost a decade and doesn’t look promising to be enacted any time soon. So in the meantime, we do what we can.
You can still do what you can. Now that we’ve taken meetings at the capitol, feel free next week to take meetings in your district in California. The members will be on vacation and potentially available at their district offices. Staff will not be on vacation and will still be in Sacramento working, so if you weren’t able to join us under such short notice, feel free to schedule your own appointments and talk to the Assembly Members on the committee for Revenue and Taxation. The meetings were generally short, 15-20 minutes of a staff members’ time. We were able to leave behind the letter that Linkshare wrote in opposition along with the opposition letter from the Performance Marketing Alliance, co-signed by over 300 affiliates.
If you’d like copies of these documents for your own leave behinds materials and have the intention of taking a meeting either in the district offices or in Sacramento, please leave a comment and I’ll see how we can get those materials to you. Here’s information on the committee members to reach out to. If you live in their district, all the better (they prefer to hear from constituents whenever possible).
- The Committee for Revenue and Taxation: (916) 319-2098
- Charles M. Calderon (Chair) – Dem. 58th District
- Sacramento Office: State Capitol, P.O. Box 942849, Sacramento, CA 94249-0058, Phone (916) 319-2058
- District Office: 13181 N. Crossroads Pkwy, Suite 160, City of Industry, CA 91746, Phone (562) 692-5858
- Chuck DeVore (Vice Chair) – Rep. 70th District
- Sacramento Office: State Capitol Room #4102, Sacramento, CA 95814, Phone (916) 319-2070
- District Office: 3 Park Plaza, Suite 275, Irvine, CA 92614, Phone (949) 863-7070
- Jim Beall, Jr. – Dem. 24th District
- Sacramento Office: State Capitol, P.O. Box 942849, Sacramento, CA 94249-0024, Phone (916) 319-2024
- District Office: 100 Paseo De San Antonio, Suite 300, San Jose, CA 95113, Phone (408) 282-8920
- Joe Coto – Dem. 23rd District
- Sacramento Office: State Capitol, P.O. Box 942849, Sacramento, CA 94249-0023, Phone (916) 319-2023
- District Office: 100 Paseo De San Antonio, Suite 319, San Jose, CA 95113, Phone (408) 277-1220
- Diane L. Harkey – Rep. 73rd District
- Sacramento Office: State Capitol Room #4177, Sacramento, CA 95814, Phone (916) 319-2073
- District Office #1: 29122 Rancho Viejo Rd., Suite 111, San Juan Capistrano, CA 92675, Phone (949) 347-7301
- District Office #2: 300 N. Coast Hwy, Oceanside, CA 92054, Phone (760) 757-8084
- Fiona Ma – Dem. 12th District
- Sacramento Office: State Capitol, P.O. Box 942849, Sacramento, CA 94249-0012, Phone (916) 319-2012
- District Office: 455 Golden Gate Ave., Suite 14600, San Francisco, CA 94102, Phone (415) 557-2312
- Jim Nielsen – Rep. 2nd District
- Sacramento Office: State Capitol Room #6031, Sacramento, CA 95814, Phone (916) 319-2002
- District Office #1: 280 Hemsted Dr., Suite 110, Redding, CA 96002, Phone (530) 223-6300
- District Office #2: 1527 Starr Dr., Suite U, Yuba City, CA 95993, Phone (530) 751-8351
- Anthony J. Portantino – Dem. 44th District
- Sacramento Office: State Capitol, P.O. Box 942849, Sacramento, CA 94249-0044, Phone (916) 319-2044
- District Office: 215 N. Marengo Ave, Suite 115, Pasadena, CA 91101, Phone (626) 577-9944
- Lori Saldaña – Dem. 76th District
- Sacramento Office: State Capitol, P.O. Box 942849, Sacramento, CA 94249-0076, Phone (916) 319 – 2076
- District Office: 1557 Columbia St., San Diego, CA 92101, Phone (619) 645-3090
