In June 2011, Gov. Jerry Brown signed a bill requiring that out-of-state retailers with an in-state "nexus" collect state sales tax from California residents. At that point, Amazon.com extinguished its in-state nexus -- thousands of California bloggers and website owners who earn referral fees when people click links to Amazon products.
It wasn't much money. And it may have been a logistical error rather than anything devious.
The way the associate system works is, bloggers accumulate small amounts of money each time they direct a click to Amazon. The Seattle-based retailer pays associates once they accumulates $25.
So when Amazon cut off its California connections, accounts containing less than $25 were not paid out. And when the bloggers returned last fall and logged into the program -- using their same user IDs -- their accounts had restarted at $0. Which means that Amazon got free advertising from people whom they had agreed to pay.
If, say, 10,000 bloggers each had $24 in their accounts, then that's a maximum hypothetical total of $240,000 siphoned off. While Amazon's profit's haven't been too impressive -- $7 million in the second quarter, which is 1 cent a share -- $240,000 is still a rain drop in a swimming pool for a company that will likely generate more than $60 billion in revenue this year.
For the bloggers, this reunion with Amazon must bring the same bag of feelings as when a stranger hands you the wallet you lost last night with all the credits cards in place and all the cash missing.
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