The news just hit the wire that Governor Scwarzenegger vetoed the Advertising Tax from the state budget.
07/01/2009 GAAS:355:09 FOR IMMEDIATE RELEASE
Governor Schwarzenegger Remains Committed to No New Taxes, Announces Overstock.com Will Continue to do Business in California
Following Overstock.com’s announcement that it will pull its affiliate advertising from California due to the legislature’s proposal to increase taxes and the announcements of other companies such as Amazon.com threatening to follow suit, Governor Schwarzenegger today reiterated his deep commitment to not raising taxes to solve our state’s budget deficit and announced Overstock.com will reinstate California-based internet affiliate advertisers:
“After passing the largest tax increase in California history, it makes absolutely no sense to go back to the taxpayers to solve the current shortfall – that’s why yesterday I vetoed the majority vote tax increase passed by the legislature. With unemployment at an all time high, we should be doing everything we can to – keep jobs and create jobs – in California. That is why my Administration immediately contacted Overstock.com when we learned of this news and, I am pleased to announce Overstock.com has reversed its decision and will continue to do business with affiliates here in California. I will continue to fight to keep jobs and businesses in California.”
California lawmakers proposed a tax on affiliate advertising and sent legislation to the Governor, but as promised he vetoed it because we cannot solve our budget deficit by raising taxes and driving businesses out of the state.
Overstock.com estimates its internet affiliate advertisers in California create millions of dollars in revenue.
I’m not completely up on my politics, but I suppose that his veto can be overruled by congress. But given the tone of this press release, it seems like this one is pretty solid.
Congrats to all the folks in California who put incredible effort to get the affiliate word out to the legislation. Arnold clearly got the message that small business would be harmed by this action.
update: Letter from Overstock to CA Affiliates
July 1, 2009
Dear Affiliate:
We are delighted to inform you that we have reversed the decision to terminate our contracts with our California-based advertising affiliates. Our Chairman and CEO, Patrick Byrne, today received a call from Governor Schwarzenegger’s Office and the Governor’s Office assured us that the Governor’s actions of last night will stand. He sent back to the legislature the revenue package, rejecting new tax initiatives, including that which provoked our termination notices. The Governor has pledged that there are to be no new taxes enacted this year, and the budget must be balanced by government cost-cutting.
We also were told that the Governor recognizes this is an issue that impacts California’s reputation for business which the Governor prefers to remain strong.
We were asked to reverse our decision of yesterday, and we happily obliged, based on these assurances. We will begin the process of canceling the expirations initiated last night and hope we do not have to revisit this issue again.
We apologize for any disruption of your business owing to these events, and thank you for your support of our position. We believe that the contacts received by the Governor’s office on this issue today were chiefly responsible for this turn of events.
Respectfully
Jonathan E. Johnson III
President
Overstock.com, Inc.
