States are hungry for money and looking for ways to bring in more tax revenue without the appearance of raising taxes on local businesses. New York was the first to start the arm-twisting and in response Amazon filed a lawsuit and it is currently working its way through the courts- in the meantime Amazon is still collecting taxes for New York as the penalties would be devastating if the courts do not find in Amazon’s favor.
Now we have proposals and legislation under consideration in Hawaii, Rhode Island and North Carolina to collect taxes from online sales if there is a “nexus” of affiliates residing in that state. In response Amazon has informed affiliates in those states their affiliate program is closed to them unless the legislation changes. Amazon is not alone in terminating affiliates in unfriendly states. Overstock.com has announced it will pull its affiliate program from California residents and businesses.
California Governor Schwarzenegger made an announcement to prevent more companies from pulling the affiliate opportunity from California:
“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.” Read the complete press release