Legal Commentary

Amazon Drops Colorado Affiliates

By Jeralyn

I got an e-mail yesterday from Amazon telling me my affiliate account is being dropped because Colorado passed a law requiring sales tax on internet purchases. Amazon wants Coloradans to work to get the law repealed. In the meantime, it is cancelling all business and affiliate accounts that do business with them.

The affiliates, ranging from online booksellers to individual bloggers who advertise Amazon on their websites to receive a commission in return, were both angry and confused by the move. And some say they were not notified.

Judith Briles, chief executive officer of Mile High Press, a book publisher in Aurora, says:

"Amazon is going to get horrendous publicity for this. But there are two bad guys: Amazon and the lawmakers who moved this legislation through so fast."

It was odd they canceled the accounts immediately. And I liked doing business with Amazon, even though their referral rates are really low. [More...]

As to the law they are talking about:

At issue is a recent law enacted by legislators mandating Amazon and other retailers notify their online shoppers they must pay a 2.9 percent sales tax on purchases. Designed to offset a massive budget shortfall, it is expected to generate $5 million.

Amazon.com, Overstock.com and other online retailers that sell across state borders do not regularly collect sales taxes, though businesses with physical stores in Colorado must. They have fought attempts in other states to enforce collections of taxes on their products.

Though the law does not impose new regulations on require affiliates, or require Amazon to collect the taxes, Amazon says:

Lawmakers "clearly intended to increase the compliance burden to a point where online retailers will be induced to voluntarily collect Colorado sales tax — a course we won't take."

Just another way to pass more costs on to the consumer and small businesses. Colorado should repeal the law. We've never paid sales tax on purchases where the seller is out of state, unless they have a branch store here, and while we need to cut the budget, this is not a good plan to do it.

So you won't be seeing any Amazon links here anymore, except for my wishlist. They said we could still buy from them, they just won't pay us if anyone buys through us.

Full post as published by TalkLeft on March 09, 2010 (boomark / email).