Governor Brown recently signed a bill that temporarily repeals the “click-through” and affiliate nexus legislation (the so-called “Amazon” law ), retroactive to June 28, 2011 (the date the Amazon law went into effect). The law would have required out-of-state sellers to collect taxes on in-state sales. The Amazon law will again take effect on either September 15, 2012 or January 1, 2013, depending on whether Congress enacts nationwide legislation allowing states to put Amazon like laws in place. Reportedly California agreed to postpone the Amazon law to give Amazon time to lobby Congress to address this issue, and in exchange Amazon agreed to drop an effort to repeal the law by referendum.
The new legislation also makes one change to the Amazon law that will take effect next year. Under the original legislation, the retailer's activities had to meet the following thresholds before “click-through nexus” would apply (both conditions had to be met): (1) the total cumulative sales price from all of the retailer's sales, within the preceding 12 months, of tangible personal property to purchasers in California that are referred pursuant to all agreements with a person or persons in California, had to be in excess of $10,000; and (2) the retailer, within the preceding 12 months, had to have total cumulative sales of tangible personal property to purchasers in California in excess of $500,000. Under the new legislation, the retailer must, within the preceding 12 months, have total cumulative sales of tangible property to purchasers in California in excess of $1 million.