farmboy - 2:53 pm on Mar 22, 2009 (gmt 0)

This bill isn't about taxing advertising services. What this bill does is (possibly) create a nexus in California for merchants who use AdWords to advertise.

My understanding is if an Ohio merchant has an affiliate in California, that creates a nexus in California and thus the Ohio merchant must pay California tax.

Somewhere in this thread, someone made the assumption that if instead of the Ohio merchant having an affiliate in California, the Ohio merchant purchased advertising from a California company (Google), this legislation would also consider that to be establishing a nexus in California and the Ohio merchant would be subject to the California tax.

I could be wrong, but I haven't seen anything to make me believe the latter example is anything more than an assumption.

If the latter is accurate and not just an assumption, then it would seem that if the Ohio merchant bought an ink-on-paper magazine advertisement from a magazine based in California, the Ohio merchant would be subject to the California tax (provided the sales volume was reached).

And the same would be true for newspaper ads, radio ads, television ads, etc.

I stand to be proven wrong, but based on what I've read, I don't think that purchasing advertising space, from AdWords, a newspaper, a magazine, or whatever venue, is going to be considered the same as "... for a commission or other consideration ... "

FarmBoy