The wording says that "engages a person in California to place an advertisement on a website operated by that person, or operated by another person in the state, unless the person entering the agreement with the retailer also directly or indirectly solicits potential customers in California through the use of flyers, newsletters, telephone calls, electronic mail, blogs, micro blogs, social networking sites, or other means of direct and indirect solicitation specifically targeted at potential customers in the state". Does this mean that people who advertise on EBay will have to collect sales tax as EBay is a CA company, and they may solicit business from customers through bulk emailings?
Can Amazon restructure themselves as an advertisement company so that affiliates place ads there and pay Amazon a commission? This way you can see which affiliate you're buying from, and if it's a CA company then you must pay sales tax. That is, Amazon will be sort of like EBay.
Can Amazon have subsidiaries such as Amazon CA which only uses affiliates from other states. So if a customer in CA buys something from Amazon, they get directed to Amazon CA and thus no sales tax is due as Amazon CA has no affiliates in CA and is also outside of CA.
The idea is that states have jurisdiction over people who intentionally do business in those states, and take affirmative steps to do so. The theory is that having an affiliate in California gives the state the power to order Amazon (or the affiliate) to collect sales tax.
That's the idea, yes.
It could do that, yes. In that case Amazon wouldn't be selling anything per se, they'd just be collecting a commission. The affiliates, if in or having any assets or employees (or affiliates) in California would be the ones required to collect sales tax.
They could try. But if the purpose is to intentionally do business in California while avoiding sales tax, the state may actually be able to force them to collect sales tax because they are intentionally targeting California residents.
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