Possible Moratorium on Internet Sales Tax
Amazon has been working hard to end California’s Internet sales tax. Last week, they stated they may have come to an arrangement with state legislators. They proposed a one year moratorium that would allow Amazon customers to avoid paying a sales tax for online purchases. This decision still has to be signed into law. If it does, it could have an impact on the gaming industry.
Impact on gaming affiliates
The moratorium could have a big impact on the online casino industry. Many lawmakers want to regulate online gambling. A California sales tax means increases the likelihood that casino affiliates will be taxed as well.
There are currently over 25,000 affiliates in California. These affiliates are starting to get pretty perturbed that their income is being threatened by the tax. Some California affiliates have even relocated their businesses over it.
What are the odds gaming affiliates will actually benefit from this?
Hurdles facing the industry
Although the decision could have major benefits for the industry and affiliates, don’t break out the party hats and pinatas just yet. There are still a couple of issues that need to be looked at:
1. The tax break is temporary. Even if the tax break is approved, it is not intended to be extended beyond 2012. This would only give affiliates a maximum of one year to enjoy the tax breaks.
2. The decision may not go through. No one can be 100% sure that the deal will be made into law. Although a lot of people are optimistic about the proposal, that’s all it is. A proposal. A few stubborn politicians determined to fix the deficit problem they caused may insist on keeping the sales tax.
3. Still waiting for gambling regulations. We still have no idea when online gambling will be regulated. That decision could take years. By the time the industry is regulated, the moratorium may have already expired. They would miss the chance many other affiliates have to benefit from the moratorium. Affiliates will still be able to benefit from other verticals they participate in, but this won’t mean much for those who only participate in gaming affiliate programs.
The moratorium is big news for affiliates. Gaming affiliates in particular may not be as optimistic. They will have to see what pans out with both the moratorium and regulations in the gambling industry.
This is still potentially good news for gaming affiliates. It’s just too early to start celebrating until all these issues are resolved.
What are your thoughts on the moratorium? Do you think gaming affiliates will benefit from it? Share your feedback here or in the forums.