Amazon Cuts Affiliate Program in California
Internet retailer Amazon.com cut its business with its affiliates based in California on June 29, the day after the California legislature passed a provision taxing out-of-state internet retailers. Previously, internet retailers had not been required to collect sales tax thanks to a loophole instituted in the early days of e-commerce, when online retailing was a struggling industry. The new tax was part of the California State budget which was passed the night of June 28.
In a statement mailed to its California affiliates on June 29, Amazon said its ties to its Golden State affiliates would only be restored if the tax is rescinded. “We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.”
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