California and other liberal states like taking a knife to their own jugular. This will just drive affiliates out of the state if they are making money. If they aren't making much, they will just lose that part of their income. The law will just move affiliate income to other states that don't tax the Internet because Amazon and other large affiliate sites just terminate their affiliates in those states rather than collect the tax. Gov. Jerry Brown has signed into law California's tax on Internet sales through affiliate advertising which will immediately cut small-business website revenue 20% to 30%, experts say........ However, New York in 2008 passed a law to require companies with online affiliate advertising programs to collect sales tax for sales through those affiliates based in New York. Since then Rhode Island, North Carolina, Illinois, Arkansas and Connecticut passed similar laws...... http://www.ocregister.com/articles/amazon-306409-affiliate-california.html
As I responded in Economics, Amazon kicked California's ass 10-minutes after Moonbeam Brown signed the legislation into law. They fired every affiliate business in the state. So no sales taxes, no income taxes on the affiliate income and no property taxs on affiliate property for those who must now relocate out of state. California *lost* millions of dollars of revenue today. For what purpose?