Rebecca Madigan, Executive Director, Performance Marketing Association, stated, “This budget trailer bill, along with any other nexus tax legislation, will devastate a currently growing and vibrant segment of California’s technology economy, Affiliate Marketers.”
Similar legislation has been proposed in numerous other states, only to be rejected because those elected officials recognized these proposals do not generate any additional sales tax revenue and, in fact, harm small businesses.
ABX1 28 is just more of the same; it will simply not address the budget deficit because it will terminate their relationships with 25,000 California Affiliate Marketers, along with putting the growth of startup companies and venture capital projects at risk.
Keith Posehn, CEO, AppZorz stated, “Internet nexus tax bills, such at ABX1 28, needlessly endanger the growth of our state’s tech startup community; several investors we’ve pitched to during our fundraising have openly questioned the wisdom of staying in California.”
In 2010 Affiliate Marketers paid $151 million in state income taxes. If ABX1 28 passes, these small businesses will go out of business or move out of state to preserve their incomes. As a result, California’s current deficit and economic outlook will get worse.
“We hired 40 people last year and we had planned to hire another 25 people in 2011. We have stopped hiring until we know what will happen, but we are hopeful our Governor will protect small businesses like ours and keep Internet technology and innovation strong in California,” state Loren Bendel, CEO, Savings.com.
“We remain hopeful the Governor will recognize the potential legal flaws and the deceptive economic promises held within ABX1 28 and promptly veto this devastating legislation,” Madigan concluded.