Bad News For Some Amazon Affiliates

Amazon has terminated affiliates in North Carolina and Rhode Island and is threatening to do the same in California, Connecticut and Hawaii (Fox Business News reported that Hawaii is already on the banned list).

States are getting desperate for money and are looking to Internet sales to provide it. Most states require their residents to keep track of online purchases and remit sales taxes on all out of state purchases. Right. You pay your sales taxes every year, don’t you?

Heck, I remember a few years back Florida started going through all of the Customs declarations from residents that had been on cruise ships, looking to collect state sales tax on T-shirts and bottles of rum brought back into the country.

Since that wasn’t working very well, the New York state legislature decreed that affiliates established an ‘in-state presence’ for online companies, something previously limited to a physical presence like a store or office, and therefore those companies had to collect state sales taxes.

Amazon temporarily went along with this while fighting New York in court. Now, with many other states trying the same tactic, Amazon has taken the stance that any state passing similar legislation will no longer have Amazon affiliates in that state.

Blue Nile is another online retailer starting to cancel affiliates, starting in North Carolina.

Affiliate sales has been an oft touted online money making strategy. If you’re lucky enough to live in a sane state, your competition is decreasing.

Paul

Further reading:
‘Amazon Tax’ Lands in New York
Amazon Drops NC, RI Affiliates as Tax Looms
State tax hassles drive online retailers to disassociate themselves