I do wonder at what point loss of sales from affiliates will cost more than collecting taxes. Apparently, Amazon thinks it's a long way out given how readily they cut ties.
They'd rather win before going to the Supreme Court but I think they'd try that route if they had to. The distraction would be worth it; this is a very, very valuable price advantage against in-state retailers like NewEgg.
The Supreme Court might find this new crop of laws, and the affiliates-as-sufficient-nexus logic, sufficient. These were crafted with the previous Supreme Court decision in mind, the one from before Internet commerce (1992) that prevented sales tax on out-of-state sellers. Or Amazon might win an updated precedent which would leave only Congress with the ability to address cross-state sales.
I'm sure that Amazon's lawyers have done a very good job at structuring things such that they meet the letter of the law, but come on -- they've been in California for years.
I'm not sure why the California legislature thought they were going to be special in this respect.
Charge a use tax on the goods, like sane states do. The trick would be incentivizing people to pay the use tax. (Oklahoma incentivizes by letting you pay estimated personal use tax. Pay a tiny, flat fraction of you income on your tax return and you are immune from use tax prosecution.)
> If anything, wouldn't this all fall under the interstate commerce powers of the Federal government?
The U.S. Congress could, if they chose, require that interstate vendors be able to collect and redistribute use tax. A standardized federally-administered database would make implementation tractable. The hard part would actually be dealing with businesses who plan to resell the goods, who are exempt from use and sales taxes.