Overstock to Terminate California Affiliates Again Tomorrow

Now that I have your attention, Overstock may terminate its California affiliates tomorrow. The State Legislature is once again considering a bill that would make the Affiliate Nexus Tax law in California. If you are not familiar with this legislation, it defines affiliates as salespeople in order to establish nexus (the legal word for presence in the state) to out of state retailers (namely Amazon and Overstock).

We’ve been through this before. It started out as AB178 a couple of years ago. Kerri Pollard, General Manager of Commission Junction, and I went to Sacramento to testify before the Budget and Finance sub-committee. As my cab pulled up at the State Capitol, I received an e-mail that the bill was pulled by its sponsor. It turns out that there weren’t enough votes to get it out of even the sub-committee.

Now its here… again. Last year it was passed under the cover of darkness and the Governor vetoed it. Overstock terminated us last year as part of the process. Only after the Governor vetoed the bill and issued a statement that he would not allow the Affiliate Nexus Tax to become law did Overstock reinstate all of us. Fortunately, CJ’s policies give us all a week before the termination takes effect so we would have time for the Governor to use his veto stamp (can’t you just picture it in slow motion… the stamp dropping onto parchment on the Governator’s desk…. cigar in his mouth (yes, it would be in the tent outside the Capitol)).

If you are a California publisher in the Overstock program, contact your state senator… NOW. Forward Overstock’s letter and explain how AB1625 (the current form of the Affiliate Nexus Tax) will hurt small businesses in your senator’s district. If you need more information or drafts of similar letters, take a look at the Performance Marketing Association’s website.

Also, there was a good op-ed piece by Loren Bendele in today’s LA Business Journal.

If you didn’t get Overstock’s letter, here it is. Remember not to beat up Overstock for this. This is a bad law that will hurt California’s small businesses and will not generate any revenue.

6350 SOUTH 3000 EAST
PHONE: (801) 947-3100
FACSIMILE: (801) 947-3144

August 30, 2010

Dear Cashbaq:

Overstock.com values your advertising efforts, and hopes to be in a position to continue our business connection for years to come. However, as we notified you in February, there is a measure under consideration in California, likely to be voted on tomorrow, which, if it passes, will likely result in the termination of our business connection. We are urging you to contact your Senator in the California Legislature immediately to oppose the affiliate nexus tax.

By tomorrow the California Senate will have to consider the new tax, which appeared in the Assembly’s final budget proposal as AB 1625 (Section 1), or it will die for this year. In order to pass, AB 1625 needs a 2/3 majority vote. Its chances of passage are unclear; consequently, your efforts in opposition will be highly effective.

Last year the Governor vetoed a similar measure, and we are told that the Governor has not altered his position on this new tax; however, despite this, we are concerned about last minute political compromises.

You will find information on how to contact your State Senator at this location on the Performance Marketing Association’s website.

Please waste no time in contacting your Senator today to oppose the affiliate nexus tax.


Jonathan E. Johnson III
President Overstock.com, Inc.

About David Lewis

David Lewis is CEO and Co-founder of Prycing. He’s been around affiliate marketing for a long time.

Twitter: thedavidlewis

4 Responses to Overstock to Terminate California Affiliates Again Tomorrow

  1. TrishaLyn says:

    I already sent my emails off! Keeping my fingers crossed tomorrow…

  2. Rebecca Madigan says:

    Here's a link to an email template on the PMA site, plus a way to find your legislators. You just need to send 2 emails, it will take 5 minutes and make a huge impact: http://tinyurl.com/2dlr9xe

    Also, here's a post on the latest on the state of the bill: http://tinyurl.com/2agv9ms It's all politics. There's also a link to view the proceedings online.

    • Thanks for providing the resources Rebecca and the excellent synopsis of the political landscape. Posted both of your links in the follow up article that features Overtsock's response.

  3. […] to a former Colorado-based affiliate after Colorado passed a similar state law.  Overstock.com has also promised to terminate all California-based affiliate marketers if the measure were to […]